Are there special IRS rules for collectors' coins versus bullion when determining basis?
Executive summary
The IRS does not use a separate "basis" formula for collectors' coins versus bullion; cost basis is generally the purchase price plus allowable acquisition costs, and inherited items receive a stepped-up basis at death (fair market value) [1] [2]. Where the rules diverate is tax classification and reporting: many precious metals are treated as "collectibles" for tax-rate purposes and some forms/quantities of bullion trigger specific dealer reporting requirements that affect visibility to the IRS, not the basic math for basis [3] [4].
1. What “basis” means for coins and bullion — same arithmetic, different inputs
For both collector coins and bullion, the starting point for determining gain is the adjusted cost basis — essentially what was paid plus allowable costs such as dealer premiums, storage, and appraisal fees — and that figure is subtracted from sale proceeds to compute gain or loss [3] [1]. Industry guidance stresses keeping receipts and records because the IRS expects taxpayers to substantiate the purchase price and any added costs when reporting capital gains from precious metals sales [5] [6].
2. Tax classification changes the tax outcome, not the basis formula
The IRS classifies many physical precious metals as “collectibles,” which subjects long‑term gains to a maximum 28% rate rather than the lower long‑term capital gains rates that apply to stocks and bonds; that classification is about tax rates, not a different basis calculation [1] [3]. Several outlets and tax summaries explicitly note that whether a piece is numismatic (rare/collector) or bullion changes how the IRS views the asset, and that collectors can face heightened scrutiny over basis documentation for numismatic premiums [7] [8].
3. Exceptions and special rules that affect treatment and reporting
There are statutory exceptions and reporting rules that create practical differences: certain coins and forms of gold, silver, platinum or palladium are excluded from the “collectible” definition for retirement accounts if held under specific trustees or meet statutory lists (IRC cross-references shown on IRS page) [9]. Separately, dealers must file Form 1099‑B for sales of reportable items and reportable quantities listed by the IRS (for example, >$1,000 face value of 90% U.S. silver coins or sales of more than 25 specified gold coins), while many bullion transactions remain exempt from 1099‑B reporting depending on purity, weight and whether the item is on the CFTC/IRS list — again this affects reporting and audit visibility rather than the taxpayer’s cost-basis math [4] [10] [11].
4. Practical consequences for sellers and collectors
Because collectors’ pieces often carry numismatic premiums above bullion value, the IRS may scrutinize basis documentation more closely for rare coins, and sellers should separately value numismatic and bullion components when a collection contains both [2] [7]. Dealers and guides emphasize that even when no 1099‑B is issued, taxpayers remain obliged to report capital gains based on their basis; selling to a non‑dealer might reduce reporting forms but not tax liability [6] [12].
5. Where reporting and legal nuance leave open questions
Public and dealer guides align on the core points — basis is cost plus allowable expenses, inheritances use FMV at death, and classification affects rates and reporting — but differences exist in summaries about which specific coins/bullion are reportable, and precise purity/quantity thresholds are governed by IRS/CFTC lists and can change; the provided sources document those rules but do not exhaustively list every coin or purity threshold, so taxpayers should consult the IRS list or a tax professional for transaction‑specific determinations [9] [4] [11].