Junk silver coins are pre-1965 U.S. dimes, quarters, and half dollars that trade for their silver content rather than any collector value. To price them, multiply the total face value by 0.715 to get troy ounces of silver, then multiply by the current spot price. Expect to pay a premium above that melt figure when you buy and receive slightly below it when you sell, and expect the IRS to tax any long-term profit as a collectible at rates up to 28%.
What Counts as Junk Silver
“Junk” doesn’t mean worthless. It means the coin has no collector premium above its metal — worn, common date, high original mintage. Dealers move these in bulk by face value instead of grading each piece.
Three groups make up almost all of the market:
- 90% silver, pre-1965: Roosevelt and Mercury dimes, Washington quarters, Franklin and Walking Liberty half dollars, and 1964 Kennedy half dollars. Ten percent copper, ninety percent silver. This is the core of the market.
- 40% silver, 1965–1970: Kennedy half dollars made during those years in a clad sandwich design.1Congress.gov. Coinage Act of 1965, Public Law 89-81
- 35% silver, 1942–1945: Wartime Jefferson nickels, identifiable by a large mintmark above Monticello on the reverse.
Morgan and Peace silver dollars (1878–1935) are 90% silver too, but most carry enough collector interest to sell above melt. Only genuinely worn examples with no numismatic appeal trade as junk.
To spot 90% silver quickly, check the date and the edge. Silver coins show a uniform silvery edge. Modern clad coins show a copper stripe sandwiched between two layers.
Figuring Out What a Coin Is Worth
The industry prices 90% silver by face value, not by counting pieces. A new coin holds 0.7234 troy ounces of silver per dollar of face value, but circulation wear cuts that down. The trading standard is 0.715 troy ounces per dollar of face value, and virtually every dealer uses that number.
The formula: face value × 0.715 × spot price. A $50 face bag of quarters (200 coins) contains about 35.75 troy ounces. At $30 spot, that’s roughly $1,072.50 in melt value.
The lower-purity coins use different multipliers:
- 40% Kennedy halves contain about 0.296 troy ounces of silver per dollar of face value.
- 35% war nickels contain about 0.0563 troy ounces per coin, which makes them less efficient to move in volume.
Adjusting for Worn Coins
Heavily worn pieces are called culls or slicks, and they weigh measurably less than mint spec. A slick dime might come in at 2.35 grams instead of 2.50; a worn half at about 12.0 grams instead of 12.5. That’s a 4–5% loss of metal. Buyers who weigh a mixed lot rather than count face value will pay a bit less per coin, though the price per actual ounce of silver stays the same.
Premiums, Spreads, and Your Break-Even
Nobody trades at exact melt. The gap between buy and sell prices is where dealers make their money, and it determines how much silver has to move before you’re above water.
Buying, expect to pay 3% to 10% above melt in calm markets. Supply squeezes push that higher. In 2020 and again in early 2024, junk silver premiums temporarily exceeded 30% because physical supply couldn’t keep up with demand.
Selling, expect the spread to run the other way. Local coin shops typically pay 90% to 95% of melt. Online dealers sometimes pay closer to melt, but shipping and insurance eat into the difference. Buying at a 5% premium and later selling 5% below melt means silver has to rise about 10% just to break you even. This is not a short-term trade.
Buying Junk Silver
Junk silver moves through local coin shops, online bullion dealers, and peer-to-peer sales at shows and forums. Each channel has trade-offs.
Local shops let you inspect the coins and skip shipping. Premiums tend to run a little higher, but you build a dealer relationship that can pay off on later transactions. Online bullion dealers usually post lower premiums and let you lock a price for 24 to 48 hours while payment is in transit. You can’t inspect until the package arrives, and you pay for shipping and insurance.
Regardless of channel, two habits protect you. Calculate melt independently before agreeing to any price: face value × 0.715 × spot. And ask whether the lot is unsearched or picked over. It’s legal and common for sellers to cherry-pick numismatically interesting pieces from a bag before it hits the junk market, so a picked-over lot is what it sounds like.
Sales tax varies by state. Most states exempt bullion and precious metals, but some still tax certain purchases depending on transaction size or product type. A 6–8% sales tax added to a 5% premium pushes your break-even well past 10%.
Selling Junk Silver
Sort your coins first. Separate 90%, 40%, and 35% material. Total the face value of each group. Multiply by the appropriate silver factor, then by spot. Walking in with those numbers already worked out makes it much harder for a buyer to lowball you.
Local Versus Online
Local shops pay cash on the spot, usually 90% to 95% of melt. Some negotiate; some post a flat number. Getting quotes from two or three shops in an afternoon can add several percentage points on a large lot.
Online dealers often pay closer to melt but the cycle takes about a week: lock a sell price on the website, ship, wait for verification, receive payment by ACH, wire (usually with a small fee), or check.
Shipping
Silver is heavy. A $1,000 face value bag of 90% coins weighs roughly 55 pounds; even a $100 lot of quarters runs about 5.5 pounds. Double-box every shipment and tape the inner box thoroughly, because coins shift in transit and will punch through a single wall of cardboard. Insure for full current value and use a tracked carrier. Most dealers require a specific carrier and tracking number before they’ll honor the locked price, so read the shipping instructions carefully.
Spotting Counterfeits
Fakes are less common in junk silver than in bullion bars or rare coins because per-piece value is low, but a bag of counterfeit quarters can still cost thousands. A few practical checks handle most of the risk:
- Weight. A genuine 90% quarter weighs 6.25 grams, a dime 2.50 grams. A scale accurate to 0.01 grams catches most base-metal fakes.
- Ring test. Balance the coin on a fingertip and tap it. Silver produces a sustained high-pitched ring; clad and base metals thud.
- Edge. Any visible copper layer means clad, not silver.
- Specific gravity. The 90% U.S. coin alloy falls between 10.3 and 10.4. A cup of water, a scale, and a bit of arithmetic will confirm anything suspicious.
For larger buys, dealing with an established seller that has a return policy is the simplest protection. At coin shows or on peer-to-peer marketplaces, bring a scale.
Taxes When You Sell
The IRS classifies coins as collectibles. Long-term gains (held more than a year) on collectibles are taxed at a maximum rate of 28%, higher than the 20% cap on stocks and most other assets.2Internal Revenue Service. Topic No. 409, Capital Gains and Losses Silver sold within a year of purchase is taxed as ordinary income at your marginal rate.3Office of the Law Revision Counsel. 26 USC 1 – Tax Imposed
Gains and losses go on Form 8949 and summarize onto Schedule D.2Internal Revenue Service. Topic No. 409, Capital Gains and Losses Your cost basis is what you paid, including premiums and shipping. Without receipts, the IRS can treat your entire sale as gain, so keep records of every purchase.
When the Dealer Reports Your Sale
Two different rules confuse people, and they cover different things.
Form 1099-B covers dealer reporting of the sale itself. Under current IRS guidance for 2025 and 2026, a precious metals sale is not reportable on Form 1099-B if the metal is in a form for which the CFTC has not approved a regulated futures contract, or if the quantity is below the minimum needed to satisfy such a contract.4Internal Revenue Service. Correction to the 2025 and 2026 Instructions for Form 1099-B CFTC-approved silver contracts require .999 fine bars in 5,000-ounce lots. Ninety percent junk silver is neither .999 fine nor typically sold in that quantity, so most junk silver sales don’t trigger a 1099-B.
Form 8300 is different. It applies whenever a business receives more than $10,000 in cash in a single transaction, or in related transactions. For coin and collectible sales, the IRS treats cashier’s checks and money orders of $10,000 or less as cash for this rule. Pay $12,000 in cash for a bag of silver and the dealer files Form 8300 within 15 days. Splitting into two visits doesn’t help: the IRS aggregates transactions within 24 hours automatically, and can aggregate transactions further apart if it believes you were structuring to avoid the threshold.5Internal Revenue Service. IRS Form 8300 Reference Guide
Neither form changes what you owe. You owe tax on your gains whether or not a form is filed.
Junk Silver in an IRA
It doesn’t work. Federal law treats an IRA’s purchase of a collectible as an immediate taxable distribution, with narrow statutory exceptions for specific coins (including American Silver Eagles under 31 USC 5112(e)) and for bullion meeting a minimum fineness standard.6Office of the Law Revision Counsel. 26 USC 408 – Individual Retirement Accounts7Office of the Law Revision Counsel. 31 USC 5112 – Denominations, Specifications, and Design of Coins
Pre-1965 coins fail both tests. They aren’t on the enumerated list, and at 90% they’re well below the .999 fineness threshold. If a custodian allowed the purchase, the full cost would count as a distribution: income tax plus a possible 10% early withdrawal penalty under 59½.8Internal Revenue Service. Investments in Collectibles in Individually Directed Qualified Plan Accounts For silver exposure inside a retirement account, American Silver Eagles and qualifying .999 bars held by an approved trustee are the workable options.
Storing Silver at Home
A small position of $100 to $200 face value fits in a home safe. Larger stacks get heavy quickly. A $1,000 face value bag runs about 55 pounds, which becomes a physical security question as much as a financial one.
Then there’s insurance. Standard homeowners policies cap coverage for coins and precious metals at low levels, often $1,500 to $2,000 for theft. That can be less than a single $100 face bag at elevated silver prices. To cover a larger holding you need a scheduled personal property endorsement, sometimes called a rider or floater. The insurer will want descriptions and assigned values, and your premium will rise accordingly.
A bank safe deposit box handles security but adds annual rent and limits you to banking hours. Some investors keep a small emergency stash at home and the bulk in a box or private vault. Whichever setup you choose, document the location and inventory somewhere your family can find them.