Question and opinions wanted please read.
Coin Finder
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I have been asked to sell a coin stash from a divorced person. The divorce is final, the person now owns the coins outright....
How do I sell these coin as a favor to this person who knows nothing about coins and not have tax implications on the sales?
How do I set expectations for this person in what they will bring versus what they are "valued" out
The coins are "valued" at over $10,000 total..
THanks
0
Comments
I would work with a respected dealer, perhaps on these boards to inventory and value the coins so as to not create a personal issue between the person you are helping and yourself. Perceived value and market value along with the frictional costs of selling can be a surprise to many folks.
If you are not receiving any income then I doubt that you would incur any tax implications . I would just keep records of any money which inflows which pass through your accounts and then the corresponding outflow to the consignor.
Latin American Collection
This is the big challenge.
I would have the person set up an eBay and Paypal account. Sell the items and handle the shipping. Then deposit the returns to their bank. All with meticulous documentation, of course.
Can you say more about what comprises the collection?
Check out my current listings: https://ebay.com/sch/khunt/m.html?_ipg=200&_sop=12&_rdc=1
Who "valued" them? Remember no good deed goes unpunished.
Have a well known and respected dealer or auction house buy the coins from the owner. You will get some kind of finders fee from selling party.
Clean, effective and a perfect solution.
A few years back I hade a very similar situation after a death. The widow had no Idea about coins or where to go so she would not be ripped off by some greedy local dealer. However, a large US auction house accommodated her all the way, and eventually sold the whole lot by piece meal over 6 months. (overall value more than 1/2 mill)
In this case, I received a token finders fee from the widow for finding a buyer in form of a few rare coins and another small fee from the auction house.
It was all clean and absolutely no problems. AND, very little work.
I would find a PNG dealer. They have strict requirements and a code of ethics they must follow.
https://png.memberclicks.net/find-a-png-dealer
Collector, occasional seller
I would suggest to help the person by guiding them to information and/or making introductions. However, I would not do anything illegal to avoid possible tax liabilities and would not have funds made out to my name if doing this for someone else. There could be far more work here than the average person realizes and the way the first post is written makes me think this has a very good chance of not going smoothly.
Good luck.
In honor of the memory of Cpl. Michael E. Thompson
There may be no tax implications if the cost basis is less than or equal to the value. Selling a coin for $10,000 does not mean you owe taxes on $10,000. If the coins were valued at $10,000 in the divorce disbursement, I would imagine the IRS would accept that as the cost basis. That means that only receipts of over $10,000 would be taxable.
As for expectations...good luck. I would NOT do this as a favor to anyone, if I were you. If you end up selling a coin for $500 that the market values at $400, you could still end up being a heel or even sued if the divorcee thinks the coin is valued at $1000.
If you insist on this undertaking, GET A CONTRACT. Let me repeat # GET A CONTRACT!
You need all terms and liability spelled out in the contract including underperformance (disappointing price), theft, loss, etc.
For example, if you sell a coin for $500 on ebay using your account and 3 months later the buyer files a chargeback because PCGS tells them the coin is counterfeit, you could end up on the hook for the $500. Even with a contract, you could be forced to sue your friend to get the $500 back if you've already cashed out the proceeds and he/she is uncooperative.
If it were me, my favor would stop at giving him/her a list of reputable dealers/outlets and some free suggestions on what to send where. As soon as you actually execute a sale on his/her behalf, you run the risk of being financially responsible for whatever ensues. And even if nothing bad happens and you heroically sell the $10,000 in coins for $10,000, you still could end up losing a friend if a similar coin to one you sold goes for some outrageous price on eBay and your friend thinks he/she got taken. That could happen even if the coin isn't that similar.
True story: there's a local woman selling coins as an executor. She insists on looking up everything she sells me on eBay. She sometimes refuses my generous offer and she shows me how I'm wrong (LOL - she knows nothing about coins) by showing me an MS66 coin on eBay that is the same type as the AU polished coin she's trying to sell me.
My lifetime of moral ambiguity has educated me in various meaning of the word "stash". Whose word is that? From before or after the divorce? Paperwork from the executor for inventory valuation would also establish clear title.
Your position in this situation offers you the chance to make a few hundred bucks max to do someone a favor that you might as easily do for free as long as you could be assured, and assure your client, that s/he is being treated fairly.
Refining @YQQ's concept. The coins get sent to Great Collections for grading and sale. Ian pays her directly. You do or don't have an gentleman's agreement with the seller that you get 5% of the proceeds.
Tell them to get a CPA or qualified attorney to advise them on basis, to set expectations. Content will determine the venue for sale recommendation. Just don't sell them yourself
Help them set up an eBay account. school them on listing auction style for 7 to 10 days each. And agree apon a small percentage of the overall sale for your time. Let the market decide price.
If they are all raw and worth grading that's another story, you may get the cherry pickers out and bidding strong with good picks, or send them in and get current market on fresh graded stuff. I guess it all depends on what we are talking about as far as inventory.
We could help more with more info.
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Unless this is a VERY close friend I would just give him the names of a few dealers/GC if the material is suitable. If going the Ebay route I would give this to Jeremy or someone like him to disperse of. No need to take this on yourself
M
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
Good luck !!!
After 5000+ posts, you know enough of us know enough about this that
1) with or without an inventory of this grouping, just a very fuzzy $10K
2) not knowing if any silver or gold may be part of the value
3) or slabbed or raw
4) or maybe just knowing there are fewer than 100 total 2001-2013 proof sets to ship.
there's very little more anyone could add that would help you and your friend.
From a business standpoint, considering transaction costs and simplicity, this deal is still going to be pretty marginal for everybody.
This cynical Buddhist suggests that you minimize your appropriate karmic suffering by getting the good deed quickly done in terms of total non-billable minutes
As per my earlier advice re: GC, if the most excellent Raeleen answers the phone, tell her about 50 folks she knows here say "Hi"
I just want to point out that the value in the divorce decree would be irrelevant to the determination of the divorcee's basis in the coins. The basis would transfer from the prior spouse to the divorcee.
Thanks folks, I really appreciate it. I cant give much more detail at this time. The divorce is done, assets divided.
It was and has been my opinion all along that the initial valuations were sky high and this has been communicated several times.
I am going to get some type of indemnity agreement, to exempt my from liability. It will have to include some very specific points about "value" and the costs of of selling. And also the inventory list from the settlement. This person is a dear friend of the family and in my opinion was taken advantage of and used in a mean spirited way. I just want to help...
Good luck. Do what you feel you have to do. But cover your interest!
many friendships have ended up feuds over money.
If buying the collection outright is beyond your budget I would go partners w somebody competent in handling these deals.
I would do an inventory of the deal. Calculate what I could sell it for. Then make that person a lump sum offer which allows me adequate profit then they would take it - or pass and then need to sell somewhere else.
If your not competent to handle a coin deal of this nature you could refer them to coin shop, GC, eBay.
I have handled many collection / estate deals and in some instances gone partners. It may have been another dealer or perhaps best pocket trader. In this way partners can divvy it up based on what they can afford, are interested, flip for decent profit. The combined unified front gives synergy to negotiation.
Good luck!
Interesting. Possible. But is it definitive? If there was an ownership transfer with a value of $10,000 assigned [depending on where that value came from], the basis might well be adjusted, would it not? Obviously, the IRS is going to frown upon someone reassessing their own real estate at $1 (or $1 million), there is some authority here that arrived at the $10,000 value. So, I'm not sure that the cost basis is not readjusted with the ownership transfer....although I'm not a lawyer.
For example, if my grandfather had 1000 ounces of gold that he paid $35 an ounce for. I would not inherit them with a $35,000 basis, would I? The estate would revalue the gold at $1.3 million during probate and my basis would be $1.3 million, would it not? Why would a divorce be any different?
@jmlanzaf - There is a big difference between a death and an inheritance. Don't confuse the two, an inheritance gets the step-up in basis to the current market value; the divorce transfer does not.
I lost a close friend doing nearly the same as your op describes. Please realize that this person's family and friends are going to be advising her also and they will undoubtedly be describing horrific events that happened to a friend, neighbor or another family member, or just heard about. This they will be inundated with daily. They will tell her the coins(regardless of grade) should be worth the max listed. They will eventually become skeptical of you. I do not believe you will come out of this unscathed. JMO
I truly wish you the best of luck.
Jim
When a man who is honestly mistaken hears the truth, he will either quit being mistaken or cease to be honest....Abraham Lincoln
Patriotism is supporting your country all the time, and your government when it deserves it.....Mark Twain
If you feel that you need an indemnity agreement to handle the sale, you are going down the wrong path. You may want to consider providing advice only on how to sell the coins. You could assist with putting a value on the coins and taking coin photos, but the final decision on selling price is the owner.
I agree with a few others that have said to just point them in the right direction based on your experience, but if you want to remain friends I would not be directly involved with the sales as when it comes to money matters people become enemies real quickly.
Good luck.
Donato
Donato's Complete US Type Set ---- Donato's Dansco 7070 Modified Type Set ---- Donato's Basic U.S. Coin Design Set
Successful transactions: Shrub68 (Jim), MWallace (Mike)
Interesting. So the courts considered it communal property and not transfer of assets?
But, regardless of the basis, the only tax liability would be any profit above basis - which was the point I was trying to make.
@jmlanzaf - Any transfer by gift, transfers the basis from the donor to the recipient. The only exception is transfer out of an estate following a death. There are of course limited exceptions that rarely apply.
LOL. I'm not sure any divorcee considered the property to be a gift.
Perhaps you provide the options to them but explain that you rather it be done by someone else. I would say i collect XYZ and you have some here out of my expertise. Here is a dealer I trust, let me know how it goes. Let them know that the market changes and if they are not in a hurry, perhaps they wait till it is more favorable. Like winter.
Best place to buy !
Bronze Associate member
When you find yourself in a hole, stop digging. That is unless, of course, you want to go deeper.
Truly, share this thread with your dear friend and let it go from there.
In honor of the memory of Cpl. Michael E. Thompson
Learn all you can about the origin & sources of the coins, especially the "$10,000" value. Divorce settlements don not have to be accurate - only agreeable to both parties & the Court (or Special Master). Once that is complete, you can go to the many suggestions made above and determine which creates the most revenue for the owner.
Perfect
I tried to post this yesterday. I'll post it today and be late to the game.
Final thought. If you have the capital and are willing to assume the risk, buy the collection outright. Then you sell it in whatever venue you wish (eBay, GC) and you have total control. Else, see the marvelous suggestions above. If you do this, then i hope you value it correctly given your eventual sales venue!
Surf
It has been my experience, that people who are not coin collectors, always believe coins are far more valuable than reality, simply because they are old, or gold, or 'different'. They have no concept of condition, rarity, mints etc.. Some get very upset when they are told they do not have a 'rare treasure worth thousands of dollars'...Therefore, I would recommend you simply steer this individual to a trusted outlet (i.e. GC) and let the process proceed. You will have done your best, the individual will get a fair deal, and all will be well in your relationship. Cheers, RickO
Thanks everyone I believe you are collectively a very wise bunch. After much thought and your gracious ideas, I have decided to make introductions and let the person and qualified dealer handle the business. I am going to step aside. Thanks to you all!!
I'd respectively pass.
Way too many headaches and problems could lie ahead.
"“Those who sacrifice liberty for security/safety deserve neither.“(Benjamin Franklin)
"I only golf on days that end in 'Y'" (DE59)
Very, very smart move tbe.
When a man who is honestly mistaken hears the truth, he will either quit being mistaken or cease to be honest....Abraham Lincoln
Patriotism is supporting your country all the time, and your government when it deserves it.....Mark Twain
Unless this is a VERY close friend I would just give him the names of a few dealers/GC if the material is suitable. If going the Ebay route I would give this to Jeremy or someone like him to disperse of. No need to take this on yourself
This.
I knew it would happen.
DON'T
Divorces can get more complicated than anyone can imagine or plan for.
Unless you want repercussions, just send him along his way.
Glad you decided to go the safe route.
Donato
Donato's Complete US Type Set ---- Donato's Dansco 7070 Modified Type Set ---- Donato's Basic U.S. Coin Design Set
Successful transactions: Shrub68 (Jim), MWallace (Mike)