Selling a Coin Collection From an Estate: How to Sort It, What Has Real Value, and Where It Should Sell

First Rule: Don't Clean Anything

This is the mistake that costs families the most, and it's the easiest to avoid. Cleaning, polishing, dipping or scrubbing a coin almost always lowers what a collector will pay, sometimes dramatically, because it removes original surface and leaves fine scratches or an unnatural shine that experienced buyers spot immediately. Toning and dirt are not damage in the collector market; cleaning is. Leave coins exactly as you found them. Handle them by the edges, over a soft surface, and don't take coins out of holders, flips, folders or government packaging. Original packaging, especially U.S. Mint boxes and certificates of authenticity, is part of what a buyer is paying for.

Inventory Before You Sort or Split

• Gather every coin into one secure place: check desks, dressers, closets, safes, tackle boxes, jewelry boxes and safe deposit boxes. Coins and bullion are classic 'found valuables' in a cleanout
• Keep groups together the way the owner stored them. A collector's own organization, notes and purchase receipts can help a buyer understand what's there
• Photograph holders and boxes, and write down anything printed on them: certification numbers, grades, years, mint marks and Mint packaging labels
• Keep paper money, tokens, medals and bullion bars separate from coins in your notes, since they're valued differently
• Don't divide the collection among heirs until it has been looked at. A set broken into pieces can be worth less than the set, and it's hard to split fairly without values. Our guide to dividing heirlooms covers how families usually handle this
• If the collection may be significant, record what's there before anyone removes anything; the executor is accountable for estate property

Silver Value vs. Collector Value

Almost every coin in an estate has one of two kinds of value, and a good buyer should be able to tell you which one they're paying for. Metal value is what the gold or silver in the coin is worth at the day's spot price, minus the buyer's margin. Collector, or numismatic, value is what someone pays because of the coin's date, mint mark, rarity, condition and demand, which can be far above its metal content. Most estate accumulations are mostly metal-value and face-value coins with a few pieces that deserve a closer look. The goal of sorting is to find those few before anything is sold by weight.

Coins That Are Worth at Least Their Silver

Older U.S. circulating coins contain silver that modern coins don't, which is why a jar of 'old change' can be worth more than its face value. Coins dealers commonly buy for silver content include:

• Dimes, quarters and half dollars dated 1964 and earlier, which are 90% silver
• Kennedy half dollars dated 1965 through 1970, which are 40% silver
• 'War nickels' dated 1942 through 1945 with a large mint mark above Monticello on the reverse, which contain 35% silver
• Silver dollars, such as Morgan and Peace dollars, which are 90% silver and often carry collector premiums depending on date, mint mark and condition
• Silver bullion coins and rounds, such as American Silver Eagles, which are valued mainly on silver content plus a market premium

Proof Sets, Mint Sets and Commemoratives

Many estates include years of U.S. Mint proof sets, uncirculated mint sets and commemorative coins, often bought by subscription. Keep them in their original packaging with their certificates. Some of these sell well and some, frankly, trade for modest amounts compared with what was paid at issue, so don't assume the purchase price is the value. Sets that contain silver coins have at least a silver floor. A dealer can usually sort a box of sets quickly and tell you which years are worth a closer look. The same caution applies to private-mint 'collector' issues sold through magazines and TV ads: those are not U.S. Mint products, and many resell mainly for their metal content, if they contain any.

Graded Coins in Plastic Holders

Coins sealed in hard plastic holders with a label have usually been graded and authenticated by a third-party service. The two best known are PCGS and NGC. They examine a coin, assign a grade on the 1-to-70 Sheldon scale, and seal it in a tamper-evident holder with a certification number. Both companies have online databases where you can look up a certification number and confirm that the holder, coin and grade match their records, which is worth doing for any high-value piece, since counterfeit holders exist. A graded coin is generally easier to sell to collectors because the buyer doesn't have to trust the seller's opinion of condition. That doesn't mean every graded coin is valuable; plenty of common coins get graded too. Don't crack coins out of their holders.

Replicas, Copies and Counterfeits

Estates sometimes include replica coins bought as souvenirs, and some sellers have passed off counterfeits as real. Under the federal Hobby Protection Act, 15 U.S.C. 2101, and the FTC's rule at 16 CFR Part 304, imitation numismatic items made in or imported into the U.S. must be plainly and permanently marked 'COPY', and the FTC rule requires that marking on the face or back of the item, not its edge. A coin marked 'COPY' is a replica, not a coin. An unmarked coin isn't proven genuine, though: counterfeits are made to avoid the marking. Warning signs include a coin that seems too light or too heavy, a soft or mushy design, a rare date in suspiciously perfect condition, or a 'graded' holder from a company you can't verify. When a coin might be valuable, authentication by a reputable dealer or grading service settles it.

Taxes When Heirs Sell Inherited Coins

This is general information, not tax advice, and the estate's accountant should confirm how it applies. Under federal law, inherited property generally takes a basis equal to its fair market value on the date of death (26 U.S.C. 1014), or on the alternate valuation date if the executor elects it on an estate tax return. That means heirs are generally taxed only on gain after the date of death, not on the decedent's original purchase price. The IRS treats coins as collectibles, and net long-term gain on collectibles is taxed at a maximum 28% rate rather than the lower rates that apply to most capital gains. Keep any date-of-death appraisal or dealer valuation with the estate records, since that number is your starting point. Whether the sale itself gets reported to the IRS by the buyer is a separate question: under the IRS Form 1099-B instructions, a dealer's purchase of precious metals is reportable only in forms and quantities for which the CFTC has approved regulated futures contract trading, so many estate coin sales generate no 1099-B. That doesn't change whether the gain is taxable. New Jersey's own inheritance tax rules may also apply depending on who inherits; see our NJ inheritance tax guide.

Where Estate Coins Usually Sell

• Estate sale: works for face-value and common silver coins, souvenir sets and low-value proof and mint sets sold to buyers at the sale. Many estate sale companies either price coins in a locked case or bring in a coin dealer to make an offer on the lot
• Local coin dealer: the usual route for silver coins, bullion and mixed accumulations. Ask for an itemized written offer, and get a second one on anything significant
• Auction house or numismatic auction: worth considering for rare dates, high-grade certified coins, gold coins with collector premiums and organized collections built by a serious collector
• Grading first, then sale: for a small number of potentially valuable raw coins, grading can make them easier to sell to collectors. It costs money and time, so a dealer's opinion on which coins are worth it helps
• Bank: rolls of modern clad coins and anything with only face value can simply be deposited

Questions to Ask a Coin Buyer

• Are you offering for metal content, collector value, or both? Which coins are you paying a premium for?
• Can I have an itemized written offer, not just a single number for the lot?
• What's today's silver or gold spot price, and what percentage of it are you paying on bullion?
• Which coins would you recommend grading or sending to auction instead of buying them yourself?
• Will you look up the certification numbers on graded coins in front of me?
• If an estate sale company is involved: does your offer come through the company, and is the company's commission taken from it? Our contract checklist covers how that should be written down

Red Flags When Selling an Inherited Collection

• A buyer who only quotes a single price for 'everything' without looking coin by coin
• Pressure to sell immediately, or an offer that expires when you leave the counter
• Unsolicited calls or letters to the family offering to buy coins or gold after an obituary runs
• A buyer who wants to clean coins before making an offer, or who says graded holders are 'worthless plastic'
• Anyone who won't put an offer in writing. Our guide to avoiding estate sale scams covers more of these