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Author: irasmilo Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121061  
Subject: Re: No receipt = zero tax basis? Date: 10/15/2005 6:39 PM
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I assume that even if I found out how much they originally sold for, I can't use that price as my basis, since I can't prove that's when I bought them. Is there any alternative I haven't mentioned?

Ken


I bet you could. First, it's the honest thing to do. Second, it would only ever be an issue if you were audited, so over 999 times out of 1000 you would be perfectly correct, honest, and no trouble. That said, it's probably a good idea to find out the letter of the law as far as if that would pass an audit or not. Either from people on this board or from a tax professional.


Yes, Ken could. But it would NOT be the honest thing to do. Second, no professional can ethically recommend playing audit lottery. Even if the odds of audit were 1 in 1000, he would still be wrong 1000 out of 1000 times. Unfortunately, Ken already knows the correct answer. If he can't find documentation for what he paid for the coin, he may have to use $0 as his cost basis.

Another thought comes to mind, however. If the precious metal content of the coins is known, you could do a search of historic prices of bullion and calculate what the lowest value was for the bullion content of the coin. It's highly unlikely that the coins ever sold for less than bullion value. This would establish a lower (but greater than $0) bound on the cost basis.

Ira
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