It may seem as if Uncle Sam has his hands in your pocket every time you turn around. So, it’s no surprise that the average person expects to be taken to the cleaners when you sell your jewelry or you sell your gold. The good news is that paying taxes on pre-owned jewelry isn’t the norm.

Taxes on Pre-Owned Jewelry in a Nutshell

The rule of thumb when you sell your diamond ring, for instance, is that you only pay taxes on profit. For this purpose, the government views the value of the ring as the fair market value at the time you purchase it. So, if you sell your jewelry for $100 but paid $200, there’s no taxes at all.

On the other hand, if you bought a piece for $500 and then sell your gold necklace later for $1,000, you would pay taxes. That $500 profit is in essence income, and the IRS wants a piece of the pie.

Tax Implications in Depth

The IRS treats gold, platinum, diamonds and the jewelry made from and with them to be capital assets.

A capital asset is a significant possession. Other examples include vehicles, homes, stocks, art and investment properties. A capital asset is generally something that you intend to keep at least a year. If you purchase a diamond ring you intend to use or even just enjoy, it’s a capital asset. If a jeweler purchases a diamond ring that he/she intends to sell, it’s inventory.

The income we mentioned earlier is actually called capital gains. If you purchase real estate and sell it for a profit, then you’ve realized capital gains and must pay taxes on it. The same thing happens when you sell your diamond ring, necklace or whatever for a profit.

On the other hand, if you sell jewelry for less that its fair market value at acquisition, you realize a capital loss. Capital losses can be used to offset other capital gains that you may have realized throughout the year.

Capital Gains Tax Rate

In 2018, the capital gains tax rate is determined by your tax bracket.

If you owned the jewelry you sell for less than a year, you pay a short-term capital gains tax. The tax rate is exactly the same as whatever income tax rate you file at.

If you owned the jewelry you sell for more than a year, you pay a long-term capital gains tax. The tax rate will be 0, 15 or 20 percent depending on your filing status and taxable income.

Is Inheritance or Gifting a Factor?

It’s generally irrelevant to the IRS who made the actual purchase.

If you purchased diamond earrings for $200, then the fair market value is $200.

If a friend purchased diamond earrings for $200 for you as a present, then the fair market value is $200.

If you inherited diamond earrings that were purchased at $200, value is instead based on current prices. If they are currently valued at $1,000, then that is the FMV, fair market value, at the time you acquired them.

 

Figuring Gain and Reporting It

The IRS generally expects you to report capital gains and losses in the year in which they were realized. So, if I sell my jewelry for a profit in 2018, then the IRS expects me to report it when I file in 2019.

The average person generally doesn’t have to pay taxes when it comes to pre-owned jewelry. This is because they didn’t turn a profit or their tax bracket allows for a 0-percent capital gains tax.

Nevertheless, if you do have to report capital gains or capital losses, seek professional assistance. A tax accountant can help you report them accurately and in a manner that minimizes your obligations.

 

 

Getting the Most Value for Your Pre-Owned Jewelry

Generally, your goal as a seller is to maximize the sale price. Even if selling at a certain price realizes capital gains, you’re never going to make less than you would not realizing capital gains.

The most important question to ask yourself is to whom should I sell my jewelry.

Your answer should be an established company that specializes in purchasing pre-owned pieces. A top jewelry buyer in Atlanta, for instance, is going to give you a fair price without hassle.

 

Verma Jewelry: A Trusted Atlanta Business

One such company is Verma Jewelry. Verma Jewelry is the top jewelry buyer in Atlanta and the most trusted gold buyer in Atlanta as well. Verma Jewelry also purchases gold and pieces online.

Verma Jewelry has decades of experience and more than 25 offices worldwide. Its specialized staff includes third-generation jewelers, expert horologists and fine watch specialists.

Why Choose Verma Jewelry?

Verma Jewelry is a name you can trust. It’s the most trusted gold buyer in Atlanta. It’s also among the top diamond jewelry buyers in Atlanta and throughout the world.

The brand has earned an exceptional reputation for treating clients the right way consistently. As a seller, there are a number of ways that you’ll benefit from dealing with Verma Jewelry. These include:

• An extensive network
• Fast and flexible service
• Time-tested experience

 

An Extensive Network

Jewelry can sometimes seem difficult to sell. This is because pieces are often specialized and suited to very specific tastes. A buyer must have confidence that it will sell that item down the line.

Small buyers—which describe most operations—usually cannot have this confidence.

Verma Jewelry, on the other hand, gives you access to an extensive, worldwide network. Those connections include more than 1,000 dealers that specialize in specific types of items.

With Verma Jewelry, you’re well-connected. It can pair you with the dealers who deal in the kind of pieces you want to sell. It can pair you with dealers who’ll offer you a fair price.

 

Fast and Flexible

An extensive network doesn’t mean a lot of your time.

Appraisal appointments with the Verma Group take less than 15 minutes. Verma pays on the spot, and many clients leave a meeting with cash in hand having sold all the items brought in for appraisal.

The operation is also quite flexible. You can schedule appointments online. Appointments can be made at times that make sense for your schedule. Experts appropriate to your specific pieces will be on hand.

 

Experienced and Time Tested

Verma Jewelry is experienced.

The company is established and has been buying jewelry daily in Atlanta for years. The experts available will know exactly what they are looking at and what those pieces are worth on the current market.

That experience is also time-tested. The Verma family has more than 100 years of industry experience in Atlanta and throughout the world. That’s time-tested experience from which you can benefit.

Verma Jewelry has completed millions of dollars in transactions in the jewelry business. It’s a company that’s going to be straightforward with you and treat you in an upstanding manner each and every time.

It’s the high level of service that you deserve. Schedule your appointment today.