Nobody likes to think about tax time, but if you are expecting a refund, the earlier you wade through the process the better.
I know someone is thinking this way because I received an email from an individual who said he had purchased a coin from an advertiser about 25 years ago. He had a problem. He did not have the receipt. He doesn’t know what his cost basis is, so he cannot figure out how much gain he has and then what he owes in tax.
He was hoping I could help him. Unfortunately, I could not. He had a Mercury dime that he had purchased in MS-64 Full Split Bands. Unfortunately, our staff did not collect information about MS-64 prices for the Mercury dime series at the time he said he purchased it. MS-65 FSB we have. But we live in an age where one point can make a big difference in value.
If it was bought out of a line listing ad, if I had a date, I could look up the old advertisement, but the only ad I found when I took a look was one that basically said write the firm for more information. There were no line listings.
Perhaps there was another ad, but without more specific information I could spend hours wading through bound volumes and still come up empty.
This is an unfortunate situation.
It is one that many collectors will find himself or herself in when the time comes. Those of us who have been at it for decades, especially those of us who began as kids, will find many items that came our way without records, but who thought about capital gains taxes when they were 14 or 15 years old?
What did I pay for that 1892-O Morgan dollar when I was 15? It was uncirculated. It was beautiful. I also haven’t looked at it in 25 or 30 years and it definitely is not in a slab. Is there a paper trail? Are you kidding?
As I have gotten older, I have gotten better at keeping records. But I also have a great sympathy for those who find themselves up the tax creek without the paperwork paddle. Most of us have gaps.
Also, fortunately, I wasn���t buying 1913 Liberty Head nickels when I was 15, so the consequences of my youthful cavalier attitude I hope will not cause me too much frustration.
If you expect to find yourself in this tax situation someday, perhaps it would be wise to accumulate a few guide books or papers relating to what you have collected if they are not in your library already to have a back-up for that missing invoice or check stub.