People who work in the world of appraisals are familiar with the disappointment expressed by heirs and executors when they learn their aunt’s favorite necklace has a far lower resale value than they had expected. This is a common experience for executors and heirs when it comes to jewelry and antiques, according to a recent Wealth Management article, “Rethinking Jewelry in Estate Planning.”
Part of the answer lies in how Fair Market Value (FMV) is determined, typically using auction data reflecting actual sale prices in an open, competitive secondary market. Estate and antique jewelry websites typically list asking prices, not final sale prices. Appraisers use auction data to establish a realistic benchmark for FMV, as required by the IRS and the Uniform Standards of Professional Appraisal Practice.
Further complicating the pricing picture: when appraisers reference auction data, they use the “hammer” price, which excludes fees. Major auction houses charge a buyer’s premium (usually 25%-30%) and a seller’s commission (20%-30%), so the FMV number will always appear higher than the real proceeds from the sale. The result is a gap that can be as high as 45% or more, surprising heirs and fiduciaries.
For some asset types, such as real estate and publicly traded securities, FMV makes sense and aligns more closely with what the seller will receive upon sale. However, jewelry is based on auction results plus buyers’ and sellers’ fees. This is why jewelry appraisals often seem disconnected from financial reality.
Here’s an example. In 2025, a bracelet, earring and necklace set weighing 272.15 grams of solid 18 karat gold sold at auction for $24,320 (buyer’s premium included). The total reflected a 28% buyer’s premium; the actual hammer price was about $19,000. After deducting the estimated 25% seller’s commission, the estate’s real proceeds were about $14,200. The estate’s FMV for tax purposes was $24,320, not what the estate received. For heirs, this means they pay taxes on a value inflated by 40% over the real proceeds, compared with 6% in transaction costs for a real estate or stock sale.
Selling jewelry and art collections for cash can be challenging, especially if they are not considered valuable enough to be offered at a prestigious auction house. Jewelry lacks a single transparent exchange, with many dealers, retail buyers and metal refiners, each with their own audiences and pricing structures.
The IRS rules are strict and could impose a greater tax burden on heirs and fiduciaries than they provide a benefit. There are some considerations to bridge the gap between compliance and the reality of selling this class of personal possessions.
Discuss the FMV and tax liability with heirs, ensuring that they understand that the value of most jewelry is sentimental. If the family seeks to sell the jewelry, work with a properly credentialed appraiser to determine its value.
Engage an experienced estate planning attorney to discuss how personal possessions should be handled considering the entire estate. It may be better to pass the items to family members rather than sell them.
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Reference: Wealth Management (Feb. 4, 2026) “Rethinking Jewelry in Estate Planning”
