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 Replies: 11 / Views: 3,902 |
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New Member
United States
19 Posts |
Morning' all, was just wondering what people considered to be 'junk' silver? I see the term floating around a lot...is it based off certain specific coins, or conditions? I've seen Morgan and Peace dollars, Mercury dimes, Roosies, Walking halves....all labeled as Junk silver in the coin stores around where I am. People refer to them as junk on here, too. I just wanted to know what the general consensus was on this topic. Is every single type of those coins "junk"? Or is it based on condition? Thanks for the futuristic input :) |
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Pillar of the Community
United States
1658 Posts |
It's when the numismatist value is less than the melt value. For example, a Franklin half has about $11.25 of silver in it, but a common date, really worn or damaged, isn't worth any more than that. Hence; 'junk silver'. Quote:
Is every single type of those coins "junk"? Heck, no! You can fill a lot of holes in your collection from those 'junk' boxes! Edited by ArrowsAndRays
04/25/2012 10:29 am
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Pillar of the Community
United States
1195 Posts |
Really, ArrowsAndRays? I thought it was the fineness values of 80-90% Silver that made it "junk."
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New Member
 United States
19 Posts |
Ah okay! That makes sense :) Thanks for the reply
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Pillar of the Community
United States
4132 Posts |
@argentum: No, it's certainly not the fineness. Most silver US coins in uncirculated condition, for example, would not be considered junk, even though they're .900 fineness. Broken (or even just out-of-style) silver jewelry is also "junk silver" because it's no longer valuable as jewelry, the only value is the metal content. |
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Pillar of the Community
United States
593 Posts |
Junk silver, in the U.S., is any collection of pre-1965 silver coins. They are typically dimes, quarters and half dollars since most silver dollars have more numismatic value than just the silver content itself. The last time I bought a bag of junk silver there was a 10% premium to get just halves, which were primarily '64 Kennedys. Junk silver is easy to trade since there is a fixed ratio to face value. The ratio today is about 22:1, so a bag of $100 face value would cost about $2200. Silver is down 10% over the past 30 days, and silver is historically more volatile than gold, but junk silver is an easy way to get into silver. On another post I mentioned that '59 to '64 mint sets are trading for little more than the junk silver value of the dime, quarter, and half. There is 85 cents in each set so that's $1.70 for both mints. At 22:1 that's $37.40 for the junk silver. If you think silver is going to rebound, buying '59 to '64 mint sets for $37.40 or less is a good move. Here is a link to more info on junk silver: http://cointrackers.com/blog/2/junk...rices-today/Personally, I predict silver will continue to fall and I hope to pick up '59 to '64 for under $30 per year. Maybe I'm right, or maybe it's just wishful thinking. Edited by larsdog
04/25/2012 11:18 am
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Moderator
 United States
188660 Posts |
Just my opinion.
It can be (but not necessarily always is) junk silver if the bullion value exceeds the numismatic value.
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Pillar of the Community
United States
3486 Posts |
The definition that junk silver is any coin whose metal value exceeds numismatic value is accurate.
However, there is an upside.
Within every box of junk silver there are coins whose dates and/or conditions deserve a second look.
To be able to buy nice looking coins for junk silver prices is one of the few opportunities available
to both new collectors and old-timers alike.
And should one make a mistake, well, it is STILL a piece of silver.
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Pillar of the Community
United States
593 Posts |
If you go to a precious metal dealer in the U.S. and ask for a $100 FV bag of junk silver (about $2200) you will get pre-1965 dimes, quarters and half dollars. There may very well be a few coins in there with a numismatic value far in excess of the bullion value. The silver dealer would call the whole bag junk silver. You, as a knowledgeable coin collector, may find a few items that you would not call "junk" silver, and could thereby profit from that knowledge by replacing the collectable coins with true junk silver and selling the bag back. It's like buying several rolls of pennies and finding a few wheats and maybe an indian.
I don't live in Texas anymore, but when I lived there any precious metal transaction over $500 (I think) was not taxed so you could buy and sell junk silver with very little overhead. Many times the daily fluctuation in silver prices more than offset the modest transaction fee. I think it was 1%, so a $2200 bag of junk silver would cost $2222. I don't recall if they took the 1% on the back end, too, but I would imagine they would. You do, however, have to pay capital gains tax on any profits, but you can offset them with any losses and fees you have. The coins you extract as collectibles don't incur any costs as long as they stay in your album.
Edited by larsdog
04/25/2012 12:01 pm
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Moderator
United States
188660 Posts |
Well said, matthewvincent.  |
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Pillar of the Community
United States
863 Posts |
How do you pay tax on your gains if the prices fluctuate? Is that only when you sell them. Where are you selling it for it to be documented?
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Pillar of the Community
United States
593 Posts |
Quote:
How do you pay tax on your gains if the prices fluctuate? Is that only when you sell them. Where are you selling it for it to be documented? It's like any other gain, you pay taxes on the difference between what you bought it for and what you sold it for, minus any transaction fees you paid. There is no tax until you sell the stuff, and if you have any losses you can use those to offset gains for that year - similar to gambling winnings and losses. (You can't deduct your gambling losses if you are a net loser, but you can offset winnings with losses. With precious metals you may be able to claim a tax deduction if you ended up a net loser on buying and selling junk silver even though you gleaned a few goodies for you collection along the way. Those aren't taxable until you sell your collection - or your estate does). As to whether the transaction is documented such that your failure to pay tax will come back to bite you, I can't say. I tend to pay tax on everything I'm supposed to, but not a penny more than I have to. I wrote off my mileage to and from the place I was buying silver since that was part of the transactional cost. Not everyone reports everything to the IRS. I pass no judgment. |
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Replies: 11 / Views: 3,902 |
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Posted 04/25/2012 10:47 am
