The Capital Gains and Tax Guide for Selling WWI Victory and Participation Medals

Selling high-value collectibles comes with specific tax rules, and honestly? Most hobbyists ignore them until it’s too late. I’ve seen it happen too many times — someone lists a medal they’ve held for thirty years, gets a surprisingly strong price, and then realizes at tax time that they have no idea what they owe. Let me walk you through everything I’ve learned about the financial side of parting with these extraordinary pieces.

I’ve spent the better part of two decades as a CPA specializing in collectibles taxation, and I can tell you firsthand: the intersection of numismatics and the tax code is one of the most misunderstood corners of the hobby. Whether you’re parting with a common WWI Victory Medal, a scarce so-called dollar like HK-892 or HK-903, or a one-of-a-kind bronze plaque cast in Paris during the Great War, the IRS has rules that directly affect your bottom line. Let’s get into it.

Why WWI Medals and Exonumia Deserve Special Tax Attention

The diversity in this niche never ceases to amaze me. We’re talking about pieces ranging from widely available looped Victory Medals — still found with original ribbons for modest sums — to extraordinarily rare items like the gold HK-902a so-called dollar, a piece that sold through First Class Coins and carries a pedigree tracing back to Steve Tanenbaum himself.

Between those extremes sit fascinating die varieties of HK-892 (both the 1917 and the unlisted 1918 date varieties), the massive embossed plaques showcasing unit insignias from the Engineers, Army, Navy, Tank Corps, and medics, and even uncancelled dies that have somehow found their way into private hands. Each of these items carries a different market value, a different cost basis, and potentially different tax treatment.

The gold Victory Medal, for instance, introduces precious metals considerations on top of collectible capital gains. The so-called dollars tracked by HK reference numbers have established markets with published price guides. The large plaques and trench art shell casings occupy a gray area where valuation becomes more subjective — and where the eye appeal and provenance of a piece can swing its numismatic value dramatically. Understanding these distinctions is the first step toward tax compliance.

Capital Gains Tax on Collectibles: The 28% Rate You Can’t Ignore

Here’s the single most important thing I tell every collector who walks into my office: collectibles are taxed at a maximum federal capital gains rate of 28%, not the more favorable 15% or 20% long-term capital gains rate that applies to stocks and most other investments.

This distinction hits harder than most people expect. Under IRC Section 408(m), the IRS defines collectibles to include:

• Any work of art
• Any rug or antique
• Any metal or gem (with certain exceptions for bullion)
• Any stamp or coin
• Any alcoholic beverage
• Certain other tangible personal property

Medals, tokens, so-called dollars, and exonumia like the WWI items discussed in this forum thread fall squarely within this definition. The Victory Medal, the HK-892 and HK-903 so-called dollars, the bronze plaques, even the 75mm trench art shell casing — all of these are collectibles subject to the 28% rate when sold at a profit after being held for more than one year.

And here’s the sting: if you hold the item for one year or less, the gain is taxed as ordinary income, which could reach 37% depending on your bracket. Holding period matters enormously, especially for pieces with strong luster and mint condition that command top dollar quickly.

How the 28% Rate Applies in Practice

Let’s say you purchased an HK-903 “American Saviors of Liberty” so-called dollar — one of the Top Pop examples in the NGC census — for $5,000 five years ago, and you sell it today for $15,000. Your long-term capital gain is $10,000. At the 28% collectibles rate, you owe $2,800 in federal capital gains tax on that sale, not the $1,500 you might have expected if the 15% rate applied. That’s an extra $1,300 out of your pocket — money that could have gone toward your next acquisition.

Now consider the gold HK-902a. If that rare variety were to change hands at a significant premium — and gold collectible medals in mint condition have been known to fetch five and six figures — the tax liability at 28% becomes substantial. This is precisely the kind of scenario where advance planning with a tax professional who understands collectibles can save you thousands.

1099-K Rules: When the Platform Reports Your Sale to the IRS

Starting with the 2024 tax year, the IRS lowered the 1099-K reporting threshold for third-party settlement platforms like eBay, Heritage Auctions’ online platforms, and other marketplaces. The threshold is now $600 in gross payments, down from the previous $20,000/200-transaction threshold.

For medal and exonumia sellers, the implications are immediate: if you sell a WWI Victory Medal, a so-called dollar, or any other collectible through an online platform and the gross proceeds exceed $600 in a calendar year, you will receive a 1099-K, and the IRS will receive a copy.

I cannot stress this enough: the 1099-K reports gross proceeds, not profit. If you sell a medal for $2,000 that you originally purchased for $1,800, the 1099-K will show $2,000. The IRS will see $2,000. It is entirely your responsibility to report the sale correctly on your tax return and deduct your cost basis to arrive at the actual taxable gain of $200. Get this wrong, and you’re paying tax on money that was never yours to begin with.

Common 1099-K Mistakes Collectors Make

In my practice, I see the same errors repeatedly, and they’re entirely avoidable:

1. Not reporting sales that appear on a 1099-K. The IRS’s automated matching system will flag the discrepancy. This almost always triggers a notice or audit — neither of which you want.
2. Reporting the full 1999-K amount as income rather than as a capital gain. This can result in you paying tax on the gross amount rather than the net profit, effectively overpaying by a wide margin.
3. Failing to account for selling fees. Platform fees, shipping costs, and insurance paid in connection with the sale can reduce your net proceeds and should be documented meticulously.
4. Not offsetting gains with losses. If you sold one medal at a loss and another at a gain, you can net these against each other. Many collectors don’t realize this, and it’s a costly oversight.

Cost Basis Tracking: The Foundation of Every Collectibles Tax Return

If there’s one area where collectors consistently get themselves into trouble, it’s cost basis tracking. Your cost basis is what you paid for the item, and it’s the number that determines whether you have a gain or a loss when you sell. For inherited items, the basis is generally the fair market value at the date of the decedent’s death — what’s known as a “stepped-up basis.” For gifted items, the basis generally carries over from the donor.

The challenge with WWI medals and exonumia is that many collectors have held these pieces for decades. I’ve had clients bring me a so-called dollar they inherited from a grandfather who served in the AEF in 1918, with no documentation of what was originally paid — because the original “purchase” was the government issuing the medal to the veteran. Establishing basis in these situations requires some detective work.

Establishing Cost Basis for Military Medals and Awards

For medals that were originally issued to a veteran and later acquired by a collector, the cost basis depends entirely on how you obtained the piece:

• Purchased at auction or from a dealer: Your cost basis is the purchase price plus any buyer’s premium, shipping, and insurance. Keep the invoice. Seriously — file it somewhere you’ll actually find it again.
• Inherited from a family member: Your basis is generally the fair market value at the date of death. For a standard WWI Victory Medal, this might be relatively modest. For a rare gold HK-902a with documented provenance, this could be substantial. A professional appraisal at the time of inheritance is invaluable.
• Received as a gift: Your basis is generally the same as the donor’s basis. Ask the donor for documentation before they’ve forgotten the details.
• Found or discovered with no prior ownership trail: This is where it gets complicated. You may need to establish a reasonable basis through comparable sales data, auction records, or a professional appraisal based on the piece’s strike, surface quality, and overall eye appeal.

Record-Keeping Best Practices

I recommend that every collector maintain a spreadsheet or dedicated software log that tracks the following for every item in their collection:

1. Description of the item (including HK number, NGC certification number, date, variety, and any notable patina or luster characteristics)
2. Date of acquisition
3. Cost basis (purchase price or fair market value at inheritance)
4. Source of acquisition (dealer, auction, inheritance, gift)
5. Supporting documentation (invoices, appraisals, estate records)
6. Date of sale and gross proceeds
7. Selling expenses (platform fees, auction commissions, shipping)

For the die varieties discussed in the forum — such as the HK-892 specimens with the 1917 date showing different reverse die states (flagpole tips with cracks versus flagpoles extending through the word “TRUST”), or the unlisted 1918 date variety with the rifle pointing at the “R” of ARMY versus the “A” — precise identification matters enormously. These are distinct collectibles with potentially different values and collectibility profiles, and each should be tracked separately. The market for rare varieties is nuanced, and your records should reflect that nuance.

Dealer vs. Collector Status: A Distinction That Changes Everything

This is perhaps the most consequential tax determination for anyone who buys and sells WWI medals, so-called dollars, or other exonumia on a regular basis. The IRS distinguishes between a collector (an investor) and a dealer (someone engaged in the trade or business of selling collectibles), and the tax treatment differs significantly. Getting this wrong — in either direction — can cost you dearly.

How the IRS Determines Your Status

The determination is based on facts and circumstances, but key factors include:

• Frequency and regularity of sales: If you’re selling medals and tokens throughout the year on a recurring basis, you look more like a dealer to the IRS.
• Intent: Are you buying to hold and appreciate, or are you buying to flip for quick profit? Your collecting behavior tells the story.
• Time and effort devoted: Do you maintain inventory, advertise, attend shows regularly, and devote significant time to buying and selling?
• Primary source of income: If selling collectibles is a meaningful part of your income, dealer status becomes more likely.

Tax Implications of Dealer Status

If you’re classified as a dealer, your sales are reported as ordinary income on Schedule C, not as capital gains. This means:

• You pay ordinary income tax rates (up to 37%) plus self-employment tax (15.3%) on your net profit — a significant hit
• You can deduct business expenses (travel to shows, auction fees, reference books, photography equipment, display cases)
• You cannot claim the preferential 28% collectibles capital gains rate, even on pieces you held for years
• You may be required to make quarterly estimated tax payments

For most hobbyists who occasionally sell a piece from their collection, collector status is appropriate and advantageous. But if you’re regularly buying and selling — for example, if you’re the forum member who sold an uncancelled die to another member — you need to be aware of where the line falls. The collectibility of what you’re selling doesn’t change; the tax treatment of what you’re doing might.

The “Occasional Seller” Safe Harbor

There is no bright-line test, but in my experience, the IRS generally does not challenge collector status for individuals who make only a few sales per year, who hold items for extended periods, and who can demonstrate a genuine collecting purpose — such as assembling a complete set of HK-numbered so-called dollars or building a comprehensive WWI medal collection with an eye toward historical preservation. The key is documentation of your intent.

Special Considerations for High-Value and Unique Items

The forum discussion highlights several categories of items that present unique tax challenges — pieces where the numismatic value far exceeds any intrinsic metal content.

Gold and Precious Metal Medals

The gold HK-902a Victory Medal introduces a layer of complexity that keeps even experienced tax professionals on their toes. If a collectible is made of precious metal, the IRS may view it partly as a collectible and partly as a precious metal. In practice, the 28% collectibles rate generally applies to the full gain on a numismatic gold medal because its value is driven primarily by its collectible significance, rarity, and provenance rather than its melt value. However, if you’re selling gold bullion-type items, different rules may apply. When in doubt — and with pieces of this caliber, you should always be in doubt — consult a professional.

One-of-a-Kind Items and Plaques

The large embossed WWI plaques described in the forum — the 15-inch by 22-inch piece produced in Paris, the 8-inch square cast bronze by R.W. Bock — are unique or nearly unique items. Valuing these for tax purposes requires a qualified appraisal, especially if the value exceeds $5,000 and you’re claiming a charitable donation deduction or establishing a basis for estate purposes. For sales, comparable sales data may be thin, and the eye appeal of the piece — its strike quality, surface preservation, and overall presence — may be the primary drivers of value. Expert opinion becomes essential.

Trench Art and Non-Traditional Collectibles

The 1918 75mm trench art shell casing mentioned by one forum member is a fascinating case. Trench art occupies a space between military antiques and collectibles. The tax treatment is generally the same as for any other collectible — capital gains at 28% if held long-term — but establishing cost basis and fair market value can be more challenging due to the handmade, one-of-a-kind nature of these items. The patina on a piece of trench art tells part of its story, but it also complicates valuation in ways that a standard HK-numbered so-called dollar does not.

State Tax Implications You Shouldn’t Overlook

Everything discussed so far has focused on federal tax, but don’t forget that most states also tax capital gains. States like California (up to 13.3%), New York (up to 10.9%), and others impose their own capital gains taxes on top of the federal rate. A few states — such as Florida, Texas, and Wyoming — have no state income tax, which can be a meaningful consideration for collectors planning large sales.

Some states also have specific rules about sales tax on collectibles sold within the state, though most exempt occasional private sales. If you’re selling through an online platform, the platform may collect sales tax on your behalf depending on the state. It’s another layer of complexity, but one worth understanding before you hit that “list” button.

Actionable Takeaways for WWI Medal and Exonumia Collectors

Before you sell your next WWI Victory Medal, so-called dollar, or exonumia piece, here’s my checklist. I’ve refined this over years of working with collectors, and it covers the essentials:

1. Determine your holding period. If you’ve held the item for more than one year, you qualify for long-term capital gains treatment at the 28% collectibles rate. If not, you’ll pay ordinary income tax rates — a difference that can amount to thousands on a high-value piece.
2. Document your cost basis. Find the original purchase receipt, estate appraisal, or other documentation. If you can’t find it, reconstruct it using auction records, price guides, or dealer invoices. The effort is worth it.
3. Track all selling expenses. Platform fees, auction house commissions, shipping, and insurance all reduce your net proceeds. Keep every receipt.
4. Determine your status. Are you a collector or a dealer? If you’re unsure, consult a tax professional before filing. The distinction has real financial consequences.
5. Prepare for the 1099-K. If you sell through an online platform and exceed $600 in gross sales, expect a 1099-K. Make sure your tax return matches — the IRS certainly will.
6. Consider a qualified appraisal. For high-value items like the gold HK-902a or unique plaques, a professional appraisal protects you in the event of an IRS inquiry and establishes a defensible basis for your records.
7. Offset gains with losses. If you have collectibles that have declined in value, consider selling them in the same year as your winners to offset the tax impact. This is one of the most underutilized strategies I see.
8. Consult a CPA who knows collectibles. The rules are nuanced, and the stakes are real. A generalist tax preparer may not be aware of the 28% collectibles rate or the dealer versus collector distinction. Find someone who speaks the language.

Conclusion: The Enduring Value of WWI Collectibles — Both Historical and Financial

The WWI Victory and Participation Medals, so-called dollars, and exonumia discussed in this forum thread represent far more than metal and ribbon. They are tangible connections to one of the most consequential events in human history. The story of Grace Banker — the Hello Girls chief operator who was denied her Victory Medal for over a century — reminds us that these objects carry the weight of individual sacrifice and national memory. The gold HK-902a, the uncancelled dies, the massive Paris-produced plaques — each piece tells a story of a world at war and the people who served.

From a financial perspective, these items have demonstrated remarkable value appreciation over the decades. Rare die varieties with strong eye appeal, Top Pop census pieces with original luster, and unique items like the R.W. Bock bronze plaque command serious premiums. The collectibility of this material — driven by historical significance, scarcity, and the passionate community that studies it — shows no signs of diminishing. But with that appreciation comes real tax responsibility. The 28% collectibles capital gains rate, the 1099-K reporting requirements, the critical importance of cost basis tracking, and the dealer versus collector distinction are not abstract concepts. They are real financial factors that affect every single transaction.

As both a CPA and someone who deeply respects the historical significance of these pieces, my strongest advice is this: treat your collection with the same care and documentation discipline that you bring to the hobby itself. The collector who can identify the difference between an HK-892 reverse die with flagpole cracks and one with flagpoles extending through “TRUST” — who understands that a subtle variation in strike can mean the difference between a common piece and a rare variety — is someone who understands the value of precision. Apply that same precision to your tax records, and you’ll be well-positioned to enjoy both the historical richness and the financial rewards of this extraordinary area of collecting.

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