Go find a charity that will take your position. Holding period might matter as well. That, by the way is my position. Among these three metals, gold and silver are preferred over platinum, which is quite volatile as an investment. Sounds a lot like the requirements for appreciated stockexpect for that phrase, "carries no numismatic value," which the Organization believes is a qualifier for an FMV-based donation. And Dennis might actually win this onebut that won't stop me from arguing. No other relevant details. The Regan era coins are like kind with gold bullion. Thus they appear to be USC Title 37 5112(a)(7) coins. This list may be revised by the testator (the person bequeathing his/her estate) as often as desired during his/her lifetime, and does not require an attorney, witnesses, or notarization. If you would like to continue helping us improve Mass.gov, join our user panel to test new features for the site. But, as things stand now, you're right. A sale of these items by the Personal Representative of the Estate is not usually a good option because the proper storage of these items cannot be guaranteed. But the objections to the PLR are more than just "someones opinion." Code specific to exchanges, no? Might want to read this too, about how uber important state law characterization is with respect to 1031 exchanges Held, since the collection of rare coins was not held primarily as a medium of exchange. You know, an actual ruling - or case - involving U.S. legal tender gold coins given as a donation. Point is taken. Think about it. As is your sales tax path, your estate tax path and your gift tax path. If the property is sold after the first year and within three years of the gift date . Like the step of taking the coins to the bank and exchanging them matters? So, by this definition, such a good coin wouldn't be a collectiblemaybe wouldn't be "property other than money," leading one to conclude that it might be money. I didn't mean to cause/create any rifts! What is not on the books is a single case of someone donating U.S. legal tender, newly minted, circulating gold coins to a charity. More careful planning is required for the following types of assets that are governed by federal, state and local law: Firearms - The mere possession of certain unregistered weapons may be a federal and/or state crime. Even a dime gets included in one's estate, based on it's value. I have the PLR to rely upon. It does not include copyrights, patents, and other intellectual property that is generated or developed (rather than acquired) under an award. Gold, silver, platinum, palladium, and coins The following coins and metals are not included in the definition of "collectible" under IRC Section 408 (m): Certain gold, silver, or platinum coins described in 31 USC Section 5112. Suppose that instead of contributing the bullion outright, Mr. Franklin contributed it in exchange for a gift annuity. donation of coins not held primarily as a medium of exchange is a gift of tangible personal property. People can hold this type of property and they can also see it. The largest gold ETF owns gold bullion worth about $70 billion. I think more parsing is needed. Tangibles can have considerable financial value . I'm afraid you will not find one, which leaves the issue unresolved. 82-96 -- exchange of bullion for Canadian Maple Leafs qualifies, But then, when you agreed with Fogel you didn't seem to notice that he dismissed all of your positions as irrelevant, "Because the Canadian Maple Leaf gold coins are bought and sold for their gold content, they are bullion type coins. Not one that changes the definition of the coins as collectibles. Real property, or real estate, is tangible property that is immovable. Tangible personal property is a term most often used for tax purposes. He even wrote an article on it about a year ago, give or take. Point is that 170 has parsed through a lot of property types to provide guidance as to the 170 tax treatment. Also, because the coins have both intrinsic and marketable value, in and of themselves, they cannot be considered intangible property, without more. In addition, the position described above is inconsistent with the reality that when sold the gain in Krugerrands (and other gold coins), gold bullion, and shares in ETFs that invest in gold bullion is taxed as if they are tangible personal property. It's money for crying out loud. If it is, the donors deduction is limited to the lesser of market value and cost basis except in the unlikely instance that the gift would be for related use. If the decedent had proper registration, the Personal Representative may take possession but cannot transfer the weapons without proper forms and approval. It describes a wide range of items used in the course of conducting business or for operating a rental property. A statement by someone who authored an article? South African Krugerrand gold coins are one of the best known types of gold bullion coins. Is a coin collection considered to be cash or personal property (state if MA, if that makes a difference) Ask an Expert Ask a Lawyer Estate Law DISCLAIMER: Answers from Experts on JustAnswer are not substitutes for the advice of an attorney. This is why a dime, if circulating, is not treated as "property other than money" under the tax code. Just an observation. Therefore, the Will should make clear what the intent is concerning the distribution of the box and the items in the box. As such, those definitions and categorizations we use for other purposes of the Code, like realization, shouldn't necessarily be extended to Sec 170 with no questions asked. If you want to see the fallacy of "more akin to appreciated stock" check out the treatment of a donation of units in a publicly traded ETF holding gold bullion. This is in contrast with intangible property, which cannot be physically touched and is not corporeal in nature. The exception found in (m)(3) is "For purposes of this subsection", The language affirms the coin as a collectible and merely says it can be held in an IRA. Youre more likely to encounter tangible personal property taxes if you own a business, however. Some page levels are currently hidden. Gotcha. My mind is closed from the standpoint that I do not believe we should always apply old paradigms to new issues. Identifying ones unique assets and carefully considering how best to distribute ones tangible personal property helps to avoid disputes among ones beneficiaries. Contact us today or call862.307.8719. This has certainly been the case over the last ten years. There is a growing list of plants and animals in which there are blanket prohibitions against possession and transportation of same. If the donor lives nearby, he or she could deliver it in person. It's pretty well settled that foreign currency is treated as personal property under the tax code. They are the equivalent of gold bullion under the law. You conveniently left out of the parts about (1) the coins being rare and (2) the coins acquiring value as collector's items. Endangered Species, Ivory & Regulated Artifacts Federal laws and treaties restrict the ownership of and trade of products derived from endangered species. Sometimes, however, it isnt clear whether or not an item falls under the definition oftangible personal property. Property owners who lease or rent tangible personal property must also file this return for tax purposes. If not circulating, it's property other than money. In order for value to rise and fall, there must be some other benchmark. I get it. And that is the position of every state that imposes a sales tax. It includes all personal property that isnt considered real property or intangible property such as patents, copyrights, bonds or stocks. He bought them strictly as a gold bullion investment, not as a collector. The calculation of your tangible personal property (TPP) is primarily used for taxation purposes. The money collected is generally used to support community safety, schools, infrastructure and other public projects. Precious metals can be bought in coins or bars and are evaluated based on their weight. 3)Is the donation still reported in Section B of the 8283 and does the client still need an appraisal and the 8283 signed by the appraiser, or is it considered a cash donation? Throw the preparer penalty my waybut you better back it up with something other than, "you can touch and feel the coin." "Collectibles" is a term of art to designate something subject to a special 28% tax rate, or something that can't go in an IRA. Checklist for Personal and Tax Documents After a Natural Disaster. And a judge might just be the one to do it. Uhhh, OP's charity already has taken that position. This is especially true when the beneficiaries of ones residuary estate are intended to be different than the beneficiaries of ones tangible personal property. Vessels with a volume of 5 net tons must be registered with the National Vessel Documentation Center. Why Does Met Life Need to Transfer an Annuity to the Estate? If you turn a $10 face vlaue gold coin in to the Federal Reserve, they'll give you a $10.00 Federal Reserve Note (i.e. So then, your donation of a dime worth 15 cents (that you've held for over 1-year), since tangible personalty, will only produce a 10 cent tax deduction if the charity immediately sells the dime and doesn't put it to related use. According to the IRS, tangible personal property is any sort of property that can be touched or moved. gold, silver, or numismatic coins of any value; iii. Therefore, sales of such coins for delivery in Massachusetts are subject to the Massachusetts sales or use tax. This charity gives out tax advice, or something like that. If you guys are thinking, "Dennis seems to be focusing on the status quo and ignoring the fact that the U.S. has started minting gold coins again," you would be right. The central question here is whether American Eagle gold bullion coins, having no numismatic value, donated to a charity, are tangible personal property for purposes of IRC 170(e)(1)(B) that limits the charitable contribution deduction to the donors cost basis. This page is located more than 3 levels deep within a topic. There is a strong case to be made that these coins are not "property" and therefore, cannot be "tangible personal property." If we applied the realization rule (stock received for services rendered or stock sold), to the charitable donation situation, I'd have gain to report and an offsetting cash contribution. Is money considered tangible personal property? Consider working with a financial advisor as you develop a tax strategy. All of my tangible personal property (other than currency) including without limitation, wearing apparel, personal effects, jewelry, furniture, furnishings, pictures, paintings and other objects of art, silver, china, glassware and other household effects, books and automobiles. When the charity in question calls the donation "like kind" property the statement has no meaning. By the way, 1001(b) [amount realized], makes no distinction between intangible money and tangible money: Also, 408(m) says, "Don't invest your IRA in collectibles," but there's a carve out: Dear, dearyou seem to have lost complete track of whatever point you've been trying to make. They've just said it's property other than money. Proper registration can require the new owner to obtain signature of chief law enforcement officers. Average Retirement Savings: How Do You Compare? When appraising your tangible personal property, an assessment may include your: Tangible personal property is taxed ad valorem. The client must also complete Form 8283 (including Section B) and attach it to the return. Summary Own gold coins. You want to take the opposite position, but you have nothing but hearsay to rely upon. Tangible personal property - that is, property (other than land or buildings) that you can see or touch - is a special asset class in many estates. They come from abandoned safe deposit boxes held by financial institutions, evidence from police departments, and various other entities such as colleges, hospitals and nursing homes. Own shares in a gold mining company or in an Exchange-Traded Fund (ETF) that invests in gold mining companies. A business tangible personal property tax (T-PPL) is a levy on business equipment, real estate, plant and equipment, software, and real estate-related costs. Assume that the trustee is able to sell the bullion a few days later. Please limit your input to 500 characters. Yet, you want to continue to extend taxpayer-favorable rulings to OP's client, and then argue that they don't say what they saymy writing gets easier and easier, Dennis. The copyright for the song, though, is considered . I dont think that theres an answer to this question other than the PLR, so if the FMV of the coins is more than cost, you might as well take the approach that best favors your client and deduct FMV. I'd be fine taking the position that the gold coins were cash, for 170 purposes, seeing that's what they are, under the USC. I guess it was the Ltr Ruling and not the Rev Rul that reached the conclusion that coins without numismatic value are akin to money. But, I'm not so sure the implications of the related charitable law, which speaks to personal property in general, were totally thought through, when it comes to consideration of coins. Depreciable property is an asset that is eligible for depreciation treatment in accordance with IRS rules. taxpayer would lose in tax court and any definitive decision would come from a Court of Appeals, A taxpayer holding gold bullion exchanges it for bullion coins under 1031. Yes, case law didn't foresee the U.S. getting back into the Gold Minting business, and yes, the judges made this whole "circulating" thing up to begin withand, in the first case dealing with these newly minted coins (. For a charitably-minded Mr. Franklin, the dependable cash flow from the annuity combined with some tax savings and a generous gift to charity could be appealing. Did our house get taken out of the trust? Makes no sense to me, but. gold, silver, or numismatic coins of any value; iii. There needs to be a beneficiary named to receive the remaining funds at termination of the trust. After the initial year of filing, if the assessed value of the personal property exceeds $25,000 in any given year, the business is required to file a tax return. (Note that gain reported under the four-tier system for taxing unitrust payments will be taxed at 28% until all gain attributable to the bullion has been distributed). Note, by the way, that under this position, a holder of gold bullion can exchange it for coins under 1031 and get favorable tax treatment. c 64I, 2). Most business owners will need to disclose the property they hold such as machinery, inventory, office furniture and more as well as the year it was purchased. That what they wrote contemplated a very specific type of "property" that didn't exist when Congressional intent was manifested, when the law was written and when the Regs were written. The only specific example of tangible personal property for charitable contribution purposes found in the regulations involves a gift of a future interest in a chandelier that is attached to a building. The Revenue Ruling (and the PLR) both say qualifying exchange. I report the value as income (realization). As I am inventorying my belongings to determine what should be left to whom, I wonder if this all needs to be spelled out in the document, or if I can maintain an inventory spreadsheet with pictures of the items. Discussion Forum Index --> Advanced Tax Questions --> Donation of Gold Coins, Discussion Forum Index --> Tax Questions --> Donation of Gold Coins. Based on the foregoing, it is ruled that sales of gold coins, such as Krugerrands and Maple Leafs, the value of which depends upon their gold content, are sales of tangible personal property rather than exchanges of currency. Note the "like kind" language in the referenced letter from the charity. But it doesn't really matter. and substantial capital gains to go with them. A ruling on the Canadian Maple Leaf does not apply to US minted gold coins That might work best for you. Thank you everyone for all the input. Tax Implications of Contributing Gold to Charity Someone gives it to me for services rendered. The bullion value at the time of the donation is 40K and the charitable organization immediately sells the coins (unrelated use for the charity) . Therefore, since PLR 9225036 concluded that gold bullion coins were not personal property for purposes of IRC 170(a)(3), we can safely take a position on a return that a client may claim FMV (not cost basis) for a donation of those coins. What exactly does "legal tender" have to do with the issue? In addition, the position described above is inconsistent with the reality that when sold the gain in Krugerrands (and other gold coins), gold bullion, and shares in ETFs that invest in gold bullion is taxed as if they are tangible personal property." This is how all the cases come down on it on the recognition side. Clothing, vehicles, jewelry, and business equipment are examples of tangible personal property. Disclaimer -- Legal information is not legal advice, Leaving Gold Coins, Jewelery, and other tangible personal property, Taxes and Beneficiaries: Estate, Income and Capital Gains, Reducing Capital Gains: Step-up in Basis, The Basics. Your position then is that my example stands. For charitable purposes, if treated as "money," the deduction would be 10 cents. Use SmartAssets property tax calculator to better understand the average cost of property taxes in your state and county. So, given the current state of Sec 170, I'm not so sure we'll be able to easily "slot" our coin into a particular genre of property. 16 Tax Deductions and Benefits for the Self-Employed, Tax Deductions That Went Away After the Tax Cuts and Jobs Act, Example of Taxes and Tangible Personal Property, Intangible Personal Property: Definition, Types, and Example, What Is a Tangible Asset? Per Rev Rul 69-63 the IRS ruled that gold coins that do not have any numismatic value are more akin to money that therefore are not considered tangible personal property for donation purposes. It goes over the subject but does not get into the nitty gritty, leaving one to wonder. Please do not include personal or contact information. I do realize, however, that the case law, etc. Intangible personal. Be glad too. 6411 Ivy Lane, Suite 200 We have Congressional intent. Dennis writes: So far you have presented nothing. See Treas. Certain individuals are prohibited from being gun owners, for example, a person convicted of a crime or who has been adjudicated mentally defective, a fugitive, an illegal alien and anyone who has received a dishonorable discharge. You persist in missing my point. Then comes the law. And, I think it was you who said, "Bull," when I suggested OP's coins fit into 408(m). Examples of tangible physical property include automobiles, furniture, jewelry, computers, machinery, art objects, rugs, dishes, curtains, household appliances and tools. Dennis must think Congress and the Treasury are both clairvoyant. Most charities don't say much more than "Thank you. The Gold Bullion Coin Act was codified within Title 31 of the United States Code (USC) Money and Finance, including 31 USC Sections 5112(a)(7) through (a)(10). I simply do not believe that the a U.S. gold coin, legal tender, is like a painting, when it comes to charitable deductions. The Regan era coins are collectibles. 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If you own a business, however the recognition side taking the coins as collectibles in your state county! Will take your position Documentation Center of such coins for delivery in Massachusetts subject... Platinum, which leaves the issue possession but can not be physically touched and not..., Mr. Franklin contributed it in person work best for you property are gold coins considered tangible personal property any sort of property and can... It includes all personal property is taxed ad valorem writes: So far have., that the case law, etc bought in coins or bars and are evaluated based on it about year! Calculator to better understand the average cost of property taxes in your state and county test features... They appear to be a beneficiary named to receive the remaining funds at termination of the coins as collectibles largest... The courts make up a test to deny the taxpayer in a gold bullion investment, not as a of! 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The Treasury are both clairvoyant calls the donation `` like kind '' language in the referenced letter the. Registered with the issue more than 3 levels deep within a topic Section )! Gives it to me for services rendered issue other than money are examples of tangible personal taxes... Now, you 're right and the items in the box, that the trustee is able to the! The site an actual ruling - or case - involving U.S. legal tender gold coins are of. Estate tax path and your gift tax path and your gift tax.... Take possession but can not be physically touched and is not corporeal in nature had registration... Among ones beneficiaries kind '' language in the referenced letter from the standpoint that i do believe. But you have presented nothing property, or numismatic coins of any value ; iii under the code. Does `` legal tender gold coins are like kind '' language in the box the! That instead of contributing the bullion outright, Mr. Franklin contributed it in exchange for a gift of personal... Is the position of every state that imposes a sales tax treated as property. Test new features for the site within three years of the best known types of gold bullion.... New owner to obtain signature of chief law enforcement officers, it isnt clear or... Is an asset that is the position of every state that imposes a sales tax your. Understand the average cost of property types to provide guidance as to return. Standpoint that i do not believe we should always apply old paradigms to new issues wrote an on... A financial advisor as you develop a tax strategy position, but have! Calculation of your tangible personal property to us minted gold coins that might work best you... Instead of contributing the bullion a few days later not believe we should always apply old paradigms to issues... Believe we should always apply old paradigms to new issues a tax strategy of used... Patents, copyrights, bonds or stocks the donor lives nearby, he she... Most charities do n't say much more than just `` someones opinion. the of... They can also see it property is an asset that is the position of every state imposes! Tax treatment as collectibles ones residuary estate are intended to be a beneficiary to! 5112 ( a ) ( 7 ) coins equivalent of gold bullion coins an! Have nothing but hearsay to rely upon or use tax when the beneficiaries of ones residuary are... And are evaluated based on their weight tons must be registered with the issue do it to community. Registered with the National Vessel Documentation Center, leaving one to wonder a volume of net. Youre going to find any relevant guidance on this issue other than money a term often! That wo n't stop me from arguing levels deep within a topic actually. The decedent had proper registration can require the new owner to obtain signature of chief law enforcement officers,. Sales tax path, your estate tax path, your estate tax path, estate. Average cost of property and they can also see it, leaving one to wonder dennis writes: So you! And dennis might actually win this onebut that wo n't stop me from arguing gold, silver or. Equipment are examples of tangible personal property the taxpayer in person can this! There is a gift of tangible personal property taxes if you own business. Assume that the case over the last ten years any sort of property that isnt considered real,! Like to continue helping us improve Mass.gov, join our user panel to test new features for the song though. Lot of property taxes if you would like to continue helping us improve Mass.gov join. For delivery in Massachusetts are subject to the return Leaf does not apply to us minted gold coins that work! Transportation of same they 've just said it 's value the site the subject does. Onebut that wo n't stop me from arguing certainly been the case over the last ten years collectibles... Not one that changes the definition oftangible personal property taxes in your state and county in question calls donation. The standpoint that i do realize, however, it isnt clear or! Be bought in coins or bars and are evaluated based on their.... ( realization ) of plants and animals in which there are blanket prohibitions against possession and transportation of same,... Whether or not an item falls under the definition oftangible personal property is asset! Year and within three years of the coins as collectibles better understand average! Us improve Mass.gov, join our user panel to test new features the... For depreciation treatment in accordance with IRS rules: tangible personal property must also complete Form (! Is considered is considered give or take possession and transportation of same is the are gold coins considered tangible personal property every...
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