Help! How do taxes work when selling inherited jewelry to a dealer?

This is really helpful! So basically I need to figure out what the jewelry was worth when my grandmother passed away last year? How do I determine that "fair market value" for the basis if I don't have any paperwork about it?

You're exactly right about needing to establish the fair market value at the time of inheritance. There are several ways to determine this value after the fact. You could get a professional appraisal from a certified jewelry appraiser, explaining that you need a retroactive valuation for tax purposes. Many appraisers can do this by examining the pieces and researching comparable sales from that time period. If the jewelry was included in the estate's probate process, check if it was appraised as part of the estate inventory. Another option is to look for insurance documentation, as valuable jewelry is often listed separately on homeowner's policies with specific values.

How does it work with jewelry specifically? Like do you need to have had an official appraisal already or can it somehow help determine the value too?

Sounds interesting but also kinda sus. Aren't there free resources that tell you the same info? Why pay for something the IRS website explains for free?

The system works by analyzing any documentation you already have - appraisals, receipts, estate paperwork, etc. It doesn't determine the actual value of the jewelry itself, but it helps you understand what documentation you need and how to properly establish your tax basis. It'll actually tell you if your documentation is insufficient and what else you need to get. As for free resources, yes the IRS has information, but it's spread across dozens of pages and publications. I spent hours trying to figure it out myself before using this. What you're paying for is having all the relevant information analyzed specifically for your situation and getting straightforward guidance. After making a $15k sale, the last thing I wanted was to mess up the tax reporting to save a few bucks.

Wait how does this actually work? Do they have some secret IRS phone number or something? I've been calling the regular number for days and keep getting disconnected.

Yeah right. Nobody gets through to the IRS that fast. I've been trying for 3 months about a missing refund. If it actually worked you'd be the first person in history to get IRS help in under an hour lol.

It's not a secret phone number - they use technology that navigates the IRS phone system and holds your place in line. When they reach a human, they call you and connect you directly to that agent. It basically does the waiting for you. The system works because they've mapped out all the IRS phone menus and know exactly which options to select for different issues. They're just doing what you would do yourself, but automatically and without you having to sit there listening to hold music for hours.

Does that estate tax limit apply to the jewelry specifically or the entire inheritance? My grandma left me jewelry plus some stocks and I'm nowhere near that amount but just wondering how it all gets counted.

The estate tax threshold applies to the entire estate's value, not just individual items like jewelry. The $12.92 million limit (for 2025) would include everything - real estate, investments, cash, jewelry, cars, everything of value that was owned by the deceased. For most people, this isn't an issue since few estates exceed that threshold. Your situation with jewelry and some stocks almost certainly falls below that limit. What you should focus on is the capital gains aspect if you sell the jewelry for more than its value at the time of inheritance.

Is that only for cash sales or also if they write you a check? My local jeweler offered to buy my grandmas ring but said he'd pay by check.

Form 8300 applies to cash payments over $10,000, not checks. Cash includes actual currency, cashier's checks, bank drafts, traveler's checks, and money orders. A regular business check from the jeweler wouldn't trigger the Form 8300 reporting requirement. However, the jeweler would still need to report the payment to you on a 1099 if it's over $600, which you'd need for your tax records anyway.

This is really solid advice, especially about getting multiple quotes! I'm totally new to this whole process and hadn't even thought about the appraisal fees being potentially deductible. Quick question though - when you mention offsetting gains with losses from other investments, does that work even if the jewelry sale happens in a different month than when I might sell stocks at a loss? Or do they need to be in the same tax year but timing within the year doesn't matter?

@Diego Fisher You re'exactly right - timing within the tax year doesn t'matter at all! As long as both the capital gain from selling the jewelry and any capital losses from selling stocks happen within the same calendar year January (1 to December 31 ,)you can offset them against each other. So you could sell the jewelry in March and realize a loss on stocks in November, and they ll'still offset each other on your tax return. The IRS nets all your capital gains and losses for the entire tax year when you file. If you have more losses than gains, you can even deduct up to $3,000 of excess losses against your ordinary income, and carry forward any remaining losses to future years. Just make sure to keep good records of all the dates and amounts!

This is really helpful advice about getting written appraisals from multiple jewelers! I hadn't thought about using those as supporting documentation for tax purposes even if I don't sell to them. Quick question - when you mention insurance appraisals from before the passing, how close to the date of death do they need to be to be useful? Like if my grandmother had her jewelry appraised for insurance 2 years before she passed, would that still be relevant for establishing the stepped-up basis, or would I need something closer to the actual date?

@Lia Quinn Great question! While an appraisal from 2 years before passing isn t'perfect, it can still be very useful supporting documentation, especially for high-quality pieces that tend to hold their value well. The IRS understands that you might not have documentation from the exact date of death. What matters most is being able to reasonably establish fair market value at the time of inheritance. A 2-year-old insurance appraisal, combined with current market research or a recent professional appraisal, can help you make a strong case for the stepped-up basis value. The appraiser you hire can even reference the older appraisal and explain how market conditions may have changed since then. I d'definitely recommend keeping that insurance appraisal as part of your documentation package, along with getting a current professional appraisal specifically for tax purposes. Having multiple data points always strengthens your position if questions ever arise.