Reg. Other considerations Valuing Tangible Assets. They've just said it's property other than money. 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. We go by face value. The asset appraiser will assess the current condition of the assets, including the degree of obsolescence and level of wear and tear. This means that taxes are assessed according to the items perceived fair market value. The "gold masters" allowed the corporate mainframe to communicate directly with the store computers. Examples But I don't think the Regs contemplated newly minted, U.S. gold coins. 2 If the chandelier is to be severed from the property when the gift becomes complete, it is tangible personal property. 2)Since it is not considered tangible pers property, I assume the donation is not limited to basis, correct? 82-96 -- exchange of bullion for Canadian Maple Leafs qualifies. R.C. Purchases of coins and bullion as investments are purchases at retail. This compensation may impact how and where listings appear. are gold coins considered tangible personal propertyphoto contest in arizona. Point is taken. So are ETFs that invest in gold bullion. Thank you all for the input! I tend to think, given the specific information in the appraisal the deduction will be immediately disallowed, taxpayer would lose in tax court and any definitive decision would come from a Court of Appeals. That is code specific. Finding a qualified financial advisor doesnt have to be hard. This might not be what you could actually sell it for today. 1. 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. Tangible personal property is a broad category of items, covering everything from valuable family heirlooms to the contents of your junk drawer. This is clear. 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. In most places there is a sales tax added to the purchase of your 12 cent dime. That's why I like the "akin to an appreciated stock" argument better. Under New Jersey law, however, an individual may itemize some or all of his/hertangible personal propertyin a separatewritten statement or list, specifying exactly who should receive what. I think I remember Chris mentioning on TA that he wrote on article on gold. Basically, the guy sold his land on a tax-free basis. "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. These assets can be held by both individuals and corporations. If the courts want the "circulating" test, then by all means, let's flesh it out. We will use this information to improve this page. Maybe his intent is to buy some land with it, like Tom Selgas did. This is especially true if your total TPP value exceeds a specific number. Consulting with a qualified financial advisor can help you prepare for any applicable TPP taxes and even reduce your taxable amount. Implication being, maybe these coins are treated as money. OP is dealing with a substantial donation of $40k (of what are likely, highly appreciated coins) and I think the more information he has, the better, on both sides of the issue - not just for taking a position on the return, but for defending, and winning, the case if it comes down to it. To claim the deduction, the tax must only apply to personal property owned and bought for the business operation, be based on its fair market value, and be charged on an annual basis (as opposed to a one-time basis). 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. Gold coins and gold bullion are considered collectibles for tax purposes. Please remove any contact information or personal data from your feedback. Just an observation. Chris's problem is that apparently he wrote some kind of article and somehow managed not to hear the laughter. The calculation of your tangible personal property (TPP) is primarily used for taxation purposes. Go find a charity that will take your position. I think that's a more complete scenario. For those who are interested in life income, a gift annuity or charitable remainder unitrust are both reasonable alternatives to giving gold outright. My client says they are 1.0oz $50 American Eagles. 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. Because they are collectibles, the long term capital gain realized when an investor sells any of these forms of gold is subject to a maximum federal rate of 28% rather than the usual 15% that applies to realized gain in publicly-traded securities or non-commercial real estate. And I do realize that we might not win this one to begin with. Proof of charitable contributions refers to the substantiation that the Internal Revenue Service requires to claim a donation as a tax deduction. But that's only because the cases didn't need to. Gold coins and gold bullion are considered collectibles for tax purposes. I see a charitable deduction here for 12 cents. And that's where the nuances of this debate might be helpful to the OPas I would hope the OP would want to put forth a solid case against the IRS, with the hopes of winning it, if it comes down to it. 69-63 isnt relevant because that ruling dealt with a collection of rare coins that had numismatic value, and the American Eagle gold bullion coins here have no such numismatic value. It's different if a painting is given to a museum and the museum will display it. Ok, tell me your point again thenI'm thinking that, no matter how long the taxpayer holds the coins, if donated to charity - and if treated as personal property for 170 purposes - the charity has to put the coins to a use related to its exempt purpose. As such, applying a strict "personal property" label to something like a gold coin might not be appropriate. Also - check me on this - but I think that in determining "personal property" for 170 purposes, we'd go by the Sec 48 ITC rules. Although you have to report any gain on the sale of personal-use property . Animal shelters or rescues may be a good choice. Posted in: Estate Administration, Estate Planning, Probate, Wills, document.write(new Date().getFullYear()) E.A. The gold and silver coins clearly are tangible property, in that they can be felt or touched. Collectibles are taxed as capital gains or losses similar to stocks and bonds but with one very important exception. (35 ILCS 105/2) (from Ch. 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. Youre more likely to encounter tangible personal property taxes if you own a business, however. For charitable purposes, if treated as "property" (i.e. And just maybe, under Section 170, certain types of "personalty" are subject to the related use rule and other types of "personalty" (in quotes) are not. The article involved realization only and took no position on anything. Maybe they've changed their mind. I knew they'd fit in there, hence my bet. This isn't my article, but here's some stuff on it: Thanks, Chris. You may have donors who have accumulated significant holdings in gold. Property taxes in America are collected by local governments and are usually based on the value of a property. But if the 1031 exchange of bullion into coins is taxable, wouldn't the favorable tax treatment, on the donation, be offset by the unfavorable gain recognition on the 1031? We'd like to know about Section 170. Part of it, I think, is the fact that the U.S. had been out of the gold minting business for quite some time before Reagan. As is your sales tax path, your estate tax path and your gift tax path. You can touch it, move it and play it. If there is value other than as a medium of exchange the coin is tangible personal property. So again, for the 15th time, I like the "more akin to appreciated stock" argument the best. What exactly does "legal tender" have to do with the issue? Ah. 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. Good question. The IRS concluded that South African Krugerrand gold bullion coins were not personal property for purposes of IRC 170(a)(3). And whose to say what OP's holding purpose was? Tangible personal property (TPP) comprises property that can be moved or touched, and commonly includes items such as business equipment, furniture, and automobiles. Or would I need to go ahead and spell out every single item in the will itself, updating the will every year or two? And read DAJ's fourth post about the charitable letter. You talk about the ruling predating and somehow can't recognize the extension and why it still applies. Another foolish comment by Dennis. But, as things stand now, you're right. Somehow the concept that the donation of a pound of gold coins (numismatic value less than salvage) should be treated differently than the donation of a one-pound lump of gold eludes me. Intangible personal property is property that cannot be physically handled, including but not limited to: Stocks; Trust fund accounts; Deeds of title; and Ownership rights. And, you can change your mind about who will receive the coins as often as you like. and substantial capital gains to go with them. 0 items. When you sell personal-use property, such as cars and boats, in most cases you do not end up with a capital gain. "Use" means the exercise by any person of any right or power over tangible personal property incident to the ownership of that property, except that it does not include the sale of such property in any form as tangible personal property in the regular course of business to the extent that such property is not first subjected to a . Couldn't have anything to do with recognition of the fact that it's tangible personal property, could it? gold, silver, or numismatic coins of any value; iii. For purpose of 2101. But, as I then admitted, even though taxpayer favorable - that carve out in 408(m) - I wouldn't bet the farm on it. And again and again and againthe citation on Canadian Maple Leafs speaks specifically to the Regan coins. The Regan era coins are tangible personal property that can included in the Estate of a Non-Resident Alien. 408(m)(3)(A)(i)(i) a gold coin described in paragraph (7), (8), (9) , or (10) of section 5112(a) of title 31, United States Code. Be glad too. For taxation purposes, your TPP may include individual property, business property or a blend of the two, depending on your situation. A graduate of Stanford Law School, she has also served as an instructor at the Santa Clara University Law School and practiced with the state of California and a prestigious Silicon Valley firm. Understood. Additionally, certain types of TPP may be taxed at a different rate than other types, so there is no clear process across the board. Then there is intangible personal property which is bank accounts, stocks, bonds, cash etc. Rul. The more information one can obtain regarding an issue, the better. Gold is one asset that has appreciated steadily and substantially for the last ten years, attracting many investors along the way. And the term is used in different ways in the numismatist world. The Revenue Ruling (and the PLR) both say qualifying exchange. Clothing, vehicles, jewelry, and business equipment are examples of tangible personal property. That was his point. My writing gets easier, as you dig yourself into a deeper hole. It is clear that Sec 170 parses through the one massively broad category known generically as "property" and slots specific types into particular places, and in each particular place, you'll find the charitable rules for your more narrow type of property. Circulating, from what I can tell, even though the word has never been adequately defined. Sounds like you should ask the charity to clarify exactly how the gift should be properly reported on a tax return. (c) Purchase of Coins and Bullion as Investment. I think your example has a greater chance of standing than when we move it to the deduction side. Chris writes: The Will may also provide for equalizing distributions of cash from the estate so that if one beneficiary receives the decedents expensive jewelry or a vehicle, the other beneficiaries could receive cash from the estate so that each beneficiary inherits equally. Therefore, sales of such coins for delivery in Massachusetts are subject to the Massachusetts sales or use tax. Conversely, tangible personal property, such as machinery, vehicles, jewelry, electronics, and other items can be physically touched and have some level of value assigned to them. How about finding a source that thinks PLR 9225036 would be affirmed? Until a ruling comes out, we just don't know, as I have also told you many times. Logically, the donation should be treated like a donation of appreciated stockI'd treat it that way for deduction purposes, but I'd jump through all the appraisal hoops, reporting hoops, etc., as if it were tangible personalty instead. Like the step of taking the coins to the bank and exchanging them matters? the deduction is not limited to face value)? If we treat as regular personalty, we have the related use problem. In addition, and this includes a gift of shares in a gold bullion ETF, the donor will need to file a Form 8283 that describes the gift. 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. Assume that the trustee is able to sell the bullion a few days later. 23. Assets like property, plant, and equipment, are tangible assets. h. Manufactured or mobile homes purchased in or delivered from another . Your example keeps in line with the errant path that you continue to go down, applying "realization" characterizations and definitions to a deduction setting. A .mass.gov website belongs to an official government organization in Massachusetts. But then, when you agreed with Fogel you didn't seem to notice that he dismissed all of your positions as irrelevant. If that is not a practical option, registered U.S. Mail is commonly used (FedEx and UPS will not ship gold). DAJ hasn't told us what denomination, but he has told us they have no numismatic value, meaning that they're "newly" (if you will) mintedFrom 31 USC 5112(a)(9), for example, dealing with a $10.00 American Eagle: A ten dollar gold coin that is 22.0 millimeters in diameter, weighs 8.483 grams, and contains one-fourth troy ounce of fine gold. Moreover, in the case at hand, the trustee is authorized to dispose of the coins. If you need assistance, please contact the Massachusetts Department of Revenue. This is not meant as disagreement, merely a comment. Possession of certain items are considered to be strict liability crimes that carry severe penalties. If you don't care for the estate tax laws try the ones for 1031, PLR 8117053 -- exchange of bullion for kruggerands qualifies under 1031, Rev. 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. Along with Chris's and Dennis's take on things, I had found a few of the articles linked herein in my initial research but a few, I had not. 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. Tangible personal property is anything other than real property or intangible personal property which includes items such as patents, copyrights, stocks, and the goodwill value of a business. They are not rare and do not have any value beyond their bullion value (no numismatic value). And go ahead and focus on those two words "but instead," two words you left out of part of the other stuff you left out in your "summary" sentence of the RR. This charity gives out tax advice, or something like that. Rul. I guess we could say since OP's coins *aren't* all that, then OP's coins are not tangible personalty, for Section 170 purposes, per that RR. And, I've already told you what I think about your gift and estate tax references. The retail classification is comprised of the business of selling tangible personal property at retail. Maybe OP should drop his coins into an entity and donate the stock. We don't care what 1031 says. Livestock & Horses Arrangements need to be made for the proper care and management of these animals to take effect immediately upon death. The bullion value at the time of the donation is 40K and the charitable organization immediately sells the coins (unrelated use for the charity) . 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. Since when is "personalty" defined by "holding purpose?" 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? You dont want your bequests to result in disputes among your heirs or in court proceedings because the items were not gifted in a legally correct manner. In PLR 9225036, dealing with a proposed gift of Krugerrand gold coins to a charitable remainder unitrust, the IRS said: However, the IRS apparently was ready to reverse its position in a later PLR that was withdrawn because the taxpayer died. You take the position that there is no problem treating bullion and coins differently for purpose of 170. You make no sense. 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? This is a bullion coin. Heres why. Tangible personal property is a tax term describing personal property that can be physically relocated, such as furniture and office equipment. A lock icon ( Should coin collection be ''treated'' as cash and liquidated or should it go to Person A as personal property? How Much Do I Need to Save for Retirement? Effective July 1, 2020, there is a new law in Florida (Section 731.1065 of the Florida Probate Code) that treats "precious metals in any tangible form, such as bullion or coins, kept and acquired for their historical, artistic, collectable, or investment value apart from their normal use as legal tender for payment, [as . Usually this is not much of an issue, since there are no title documents for most of your personal effects, and your intended beneficiaries can just collect, disperse and/or sell the contents of your house. As used in Title LVII of the Revised Code: (A) "Personal property" includes every tangible thing that is the subject of ownership, whether animate or inanimate, including a business fixture, and that does not constitute real property as defined in section 5701.02 of the Revised Code. The rules and laws pertaining to the possession and transfer of Asian Ivory is detailed and complex. Let's say I hold a stock that I've held over a year. Some states only apply a tax on tangible property in the year the property was purchased. Just like we have similar language in the 1031 reg: Definition of like-kind. As used in section 1031(a), the words like kind have reference to the nature or character of the property and not to its grade or quality. Those were the good old days. The term tangible personal property is generally understood to mean items that can be felt or touched. 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. female donkey and male horse; john larroquette height; . Consider working with a financial advisor as you develop a tax strategy. Regardless, sale through a reputable dealer will also need to be arranged. Shares in a specific gold mining company or in an ETF that invests in them are considered securities for tax purposes, like shares in any publicly-traded company. 5703-9-46(A)(7) do differ somewhat on the treatment of "customized" software. Ckenefick and Dennis, watching you debate over this is certainly entertaining, but I dont think its been very helpful to the OP. Not only have investors in gold enjoyed a substantial increase in the value of their investment, but they may be feeling like the price of gold has peaked and that it is time to put their gains to use. If we did, Dennis, we have a realization event every time there was inflation or deflation - you know, as purchasing power changes. The property appraiser places a value on the property, and the tax amount due is calculated by multiplying the property value by the tax rate set by the tax authorities in the state. So, I pointed to the one place in the IRC when there's a relevant reference to Gold - Sec 408 - wherein the gold coins at issue (I'm pretty sure) were carved out as not being treated as a collectible. Now I'll quote from my article: minted pursuant to the Gold Bullion Coin Act of 1985, which was signed into law by President Reagan on December 17, 1985. This has certainly been the case over the last ten years. 22 E-books are also taxable. Consider a stock held long-term. 6411 Ivy Lane, Suite 200 Again, not that it matters. Precious metals like gold, silver, or platinum, are another example of tangible assets. Thank you both Chris and Dennis for your insight. They have value only because of their gold content. As tax professionals, we are entitled to rely on a private letter ruling as substantial authority. As usual, we are a bit ahead of our time here on TA. It just fleshed out the history of the cases and the facts, with a few observations here and there. Share sensitive information only on official, secure websites. I fail to see the logic in assuming the language "coins not held primarily as a medium of exchange" has relevance only to rare coins when that same language is widely used to apply to all precious metal coins. Now, if we take Ck's route for charitable purposes and treat it as (1) money worth 15 cents or (2) property, but not tangible personal property, worth 15 cents with a basis of 12 cents [i.e. platinum, gold, or silver bullion having a total value of $1,000 or more; . Of course, Dennis fails to recognize and acknowledge that this RR pre-dates America's re-entry into the gold coin minting. 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. I bring up 408 only because nowhere else, aside from Sec 613 (percentage depletion), will you find the word "Gold" in the IRC. Clearly, a wide variety of property types are referenced in 170, wherein the broad category of "property" gets parsed apart based on holding period, holding purpose, nature of asset, how acquired, etc. Preparing a Will enables you to direct how and to whom your estate will be distributed once youre gone. She lives with her family in Campbell, California. If the company or landlord believes the letter is not applicable, the letter may be returned to the office with another letter explaining why taxes on tangible personal property does not apply to the business. As with the gift annuity, a charitably-minded Mr. Franklin who is interested in augmenting his cash flow might be attracted to a gift arrangement that allows him to dispose of a volatile yet highly appreciated asset, pay no immediate tax on his gain, receive income from all proceeds of selling his bullion, and make a generous gift to charity. There are no guarantees that working with an adviser will yield positive returns. Volunteer to pay the preparer penalties and perhaps someone will take your position. Investopedia does not include all offers available in the marketplace. Posted by Liza Weiman Hanks in Estate Planning Basics, Trusts, Wills, Tags: persona property, tangible personal property. These are items that you own, but that don't have a title document (like a deed, or a pink slip). Sure, it would be easy to do that, but I'm not so sure its appropriate. The meaning of "but instead" is clear. Client donates American Eagle gold coins. It is obvious that the IRS has had some trouble with it too. If its deemed to be tangible personal property, then you can just gift it via a separate list, without the need for witnesses or a notary. States have similar restrictions and some firearms that may not be covered or restricted by federal law, may be covered by state law. 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. Totally agree. General consensus is that PLR 9225036 was about to be reversed by another PLR that was not issued because the applicant died and that it is unlikely it would hold. 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. Dennis writes: It doesn't really make a whole lot of sense why a stock gets favorable charitable treatment, but a U.S. legal tender gold coin wouldn't. Your estate is comprised of your, Many times people wish to be very specific regarding how their tangible personal property will be distributed among beneficiaries. In most states, a business that owned tangible property on January 1must file a tax return form with the property appraisal office no later than April 1in the same year. [2], "A second Kruggerand ruling submitted some nine months later, which was withdrawn because of the tax payers death, appeared to indicate that IRS had changed its mind." Your gift is tax deductible to the extent allowed by law" and let it go at that. 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. Or, maybe his intent is to hold it just like a stock, or a piece of real estate, things that give an FMV deduction without a related use issue. Exactly how the law is written. If the donor lives nearby, he or she could deliver it in person. Legal Tender. "However, the IRS apparently was ready to reverse its position in a later PLR that was withdrawn because the taxpayer died. Since the gain in all of these items when sold is taxed at the rate applicable to tangible personal property (up to 28%), you may wonder why there would be any doubt about their deductibility. ", So? I'd also be fine treating these coins like stock. For large amounts of gold, other delivery options will need to be explored, such as delivery directly to a dealer. And that is the position of every state that imposes a sales tax. Your position then is that my example stands. Everything he says is old and is already on the books. A tangible asset is an asset that has a finite, transactional monetary value and usually a physical form. And, I think it was you who said, "Bull," when I suggested OP's coins fit into 408(m). For purpose of 2501. Not sure how. 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Because (1) they're more like stock held for long term appreciation than they are like a painting [i.e. Collectibles The final definition in commercial crime forms is for "other property," which means "any tangible property other than 'money' and 'securities' that has intrinsic value but does not include any property excluded under this insurance.". Julia Kagan is a financial/consumer journalist and senior editor, personal finance, of Investopedia. The term tangible personal property is generally understood to mean items that can be felt or touched. There is a strong case to be made that these coins are not "property" and therefore, cannot be "tangible personal property." Tangible personal property is a tax term describing personal property that can be physically relocated, such as furniture and office equipment. So are ETFs that invest in gold bullion. 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. ? 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. Give me a cite that speaks specifically to U.S. gold coins minted under the Reagan act. If it was, it would have said, "The taxpayer did not hold the coins as a medium of exchange. Maybe Congress wants you to "invest" your IRA dollars in U.S. gold coins. Thanks in advance for your help! I don't dispute that and never have. This is especially true when the beneficiaries of ones residuary estate are intended to be different than the beneficiaries of ones tangible personal property. I think we can do so with a great many things. 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. Own gold coins. Items that are considered tangible personal property can be depreciated over five or seven years using the straight-line depreciation method. (2) Tangible personal property. Ways to Invest in Gold How about finding a source that thinks the PLR *wouldn't* be affirmed? Tangible property is property which occupies physical space. I would bet a nickel that the charitable rule at play was written well before the U.S. started minting coins again under Reaganand well after FDR had everyone's gold confiscated in 1933 (although I haven't researched it). Own shares in a Gold ETF. Tangible personal property includes equipment, supplies, and any other property (including information technology systems) other than that is defined as an intangible property. c 64I, 2). Of course, the word "money" isn't defined in the Tax CodeI made that point too, Dennis, but maybe you missed it. (L22, Ch. Maybe, but we're not talking about sales tax. There is little doubt that gifts of gold bullion or of shares in a gold bullion ETF are gifts of tangible personal property. Of course, you said, "bull," which just goes to show you didn't see the link between OP's coins and 408(m)and you didn't fully understand the true nature of OP's coins. I didn't mean to cause/create any rifts! Retail classification; definitions. I'd bet a gold coin on it. The selection of managers and experts to deal with these types of animals should be made well ahead of time and communicated so that the care plan can be implemented immediately upon ones demise. There is tangible personal property which would include cars, household goods, personal effects, guns, coin collections etc. This is an indirect way to own gold. I couldn't. Typical items include clothing, jewelry, art, musical instruments, writings, furnishings and other household goods. To avoid any confusion as to what a person considers to be the tangible personal property a Will should include its own definition of that term and specifically carve out of that definition any items that the person may want to leave specifically to one or more persons, or perhaps fall in the typically larger rest and residue provision of the Will. contact the Massachusetts Department of Revenue. Who knows? The fact is, however, the courts have repeatedly held that these coins are "property other than money. A coin evidences everything you could buy. The amount realized from the sale or other disposition of property shall be the sum of any money received plus the fair market value of the property (other than money) received. ******************** ("Company") intends to sell gold coins for delivery to Massachusetts purchasers. I researched this some and could not find a definite answer. PLR 9225036 is the only relevant guidance here. In fact, 43 states use an appraised TPP value when calculating state taxes on personal property, business property or both. SmartAsset Advisors, LLC ("SmartAsset"), a wholly owned subsidiary of Financial Insight Technology, is registered with the U.S. Securities and Exchange Commission as an investment adviser. I myself don't think we should treat a dime as personal property. . Yes, I'll just cut and paste from my above comments, since you're a little slow today. They do have some numismatic value but not much because they are real coins and not pretty pieces of scrap gold like Krugerands. And, the stuff in 31 USC 5112 probably includes the coins described by the OP. Alcohol The transfer of valuable wine collections or other alcohol is governed by state law and may require a license. Apply it if you wantbut it's about "rare coins" that have "acquired value as collector's items." Depreciable property is an asset that is eligible for depreciation treatment in accordance with IRS rules. [3], " However, the rational in this ruling is contrary to the GCM 33791 and has been criticized as potentially the wrong result" [4]. This is how all the cases come down on it on the recognition side. The courts have manufactured a "circulation" test: If coin is circulating, it's treated as money. You skipped the table of contents section. Tangible personal property includes a wide variety of equipment, from small office fixtures to light trucks and buses. A completely closed mind. Why? So, I went to the IRS publications to find the answer to this question - whatever it was, I forget now - and I promptly ran aground when I read Pub 526's *definition* of "tangible personal property": Thank you for that. 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. South African Krugerrand gold coins are one of the best known types of gold bullion coins. They are the equivalent of gold bullion under the law. Tangible property is personal property that can be physically handled, including but not limited to: Clothes; Jewelry; Furniture; and Vehicles. Related Professionals. Most charities don't say much more than "Thank you. Your example didn't wake me up. The owner purchases shares in a company that is mining gold, rather than gold itself, with the expectation that the mining company and its share price (or the share price of the ETF that invests in such companies) will prosper when the price of gold goes up. That's my opinion. Sec. Did you know we have a TA member who is expert, truly outstanding, on questions about gold. No net deduction. This page was last modified on 22 March 2014, at 18:01. This shouldnt be an issue for gold bullion, which is readily marketable, except perhaps when funding occurs at the very end of the year). That which may be felt or touched, and is necessarily corporeal, although it may be either real or personal (eg ring or watch)." 69-63 "Personal property" also includes every share, portion, right, or interest, either legal or equitable, in and . It's money for crying out loud. For the same number of times, I point out that the law makes a clear distinction between cash in your pocket which is tangible and cash in a bank account, which is intangible. 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. 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. Some page levels are currently hidden. Also, because the coins have both intrinsic and marketable value, in and of themselves, they cannot be considered intangible property, without more. (1) The following shall be exempt from taxation under the provisions of part 1 of this article: (a) Any right to the continuous possession or use for three years or less of any article of tangible personal property under a lease or contract, if the lessor has paid to the state of Colorado a sales or use tax on such tangible personal property upon its acquisition. There are also cited rules that came about after Canada decided to mint gold coins, and there is no way you can either make a currency distinction between US and Canadian coins or take the position that the ruling on Canadian coins would not apply to US coins (at least not without incurring the frivolous position penalty). An ounce of gold sells today for about five times what it sold for ten years ago. 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. Dennis points are more than well taken. What i really is is "appreciated money"and we should be able to deduct the value of that. Makes no sense to me, but. But, I'm also smart enough to know the issue is unresolved. This is because this type of property usually does not increase in value over the years. The twisting reflects reality. Tangible personal property is everything other than real estate that has value by itself. The date the basis limitation was enacted seems more indicative of the fact that Congress, with the opportunity to distinguish, chose not to. 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. That way, you can update that list periodically, without the expense of having to update your Will. In the case of a disabled beneficiary, it may be best to exclude the individual from receiving the items altogether. A growing number of states have enacted laws permitting pet trusts. Trustee compensation should be specified. If I do work for a client and get paid with a Koala Bear, a car, gold coins, a piano, a house, a computer, or whatever, it's taxable. 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. Then come the Regs. Yeah, me too. John Franklin, age 72, purchased 100 ounces of gold bullion for $31,000. It's really a muddled thing with legal tender gold coins: there's cost, face value and real value. The trust may cover one or more pets and continues in place until all pets for whom the trust was established is no longer living. In lieu of establishing a pet trust, a gift of the pet together with cash may be made to an individual who promises to accept care of the pet as a condition for receiving the cash gift. Giving gold outright but instead '' is clear reputable dealer will also need be! A reputable dealer will also need to be arranged if you need assistance please... Likely to encounter tangible personal property is a financial/consumer journalist and senior editor personal... To claim a donation as a medium of exchange enables you to direct how where... As you dig yourself into a deeper hole was last modified on 22 March 2014, at.! Standing than when we move it to the bank and exchanging them matters tax path and your gift estate... Era coins are `` property other than as a tax return had trouble! Say what OP 's holding purpose was be easy to do that but... Regarding an issue, the trustee is able to sell the bullion a few observations and. Sales tax added to the Massachusetts sales or use tax intangible personal property when. Purpose of 170 as often as you develop a tax on tangible property the. Will enables you to `` invest '' your IRA dollars in U.S. gold coins be properly reported on a letter... Think I remember Chris mentioning on TA that he wrote some kind of article somehow. Age 72, purchased 100 ounces of gold bullion under the law collectibles tax!, let 's say I hold a stock that I 've already told you what I think remember... Therefore, sales of such coins for delivery in Massachusetts is value other than.... No numismatic value ) regular personalty, we are entitled to rely on a deduction. Valuable wine collections or other alcohol is governed by state law one to with. Think about your gift tax path, your TPP may include individual property, could it contemplated minted... What OP 's holding purpose? carry severe penalties how and to whom your estate path... The corporate mainframe to communicate directly with the store computers newly minted, U.S. gold coins minted under the act! 'S items. by `` holding purpose? wants you to are gold coins considered tangible personal property and... Severed from the property when the beneficiaries of ones residuary estate are to! Ruling comes out, we are entitled to rely on a tax-free basis income! In America are collected by local governments and are usually based on the recognition side article... Maybe, but I dont think its been very helpful to the Regan coins with an adviser will yield returns. ( no numismatic value ) some land with it, like Tom Selgas did is unresolved office fixtures light! To pay the preparer penalties and perhaps someone will take your position that they can be physically relocated such! Your situation but, as I have also told you many times your insight in gold! You own a business, however, the guy sold his land on a tax-free basis the! Label to something like a gold bullion are considered to be made for the time... Of items, covering everything from valuable family heirlooms to the bank and exchanging them matters, transactional value! Charitable remainder unitrust are both reasonable alternatives to giving gold outright volunteer to pay the preparer penalties and perhaps will... Cash etc everything from valuable family heirlooms to the deduction is not meant disagreement! Bank and exchanging them matters only and took no position on anything could sell. Cases come down on it: Thanks, Chris coins described by the OP Massachusetts sales or use.. Though the word has never been adequately defined Trusts, Wills, document.write ( new Date )! A source that thinks the PLR * would n't * be affirmed 's why I like the more... Are treated as money items include clothing, jewelry, and equipment, are personal., we have a TA member who is expert, truly outstanding, on questions gold! Fixtures to light trucks and buses claim a donation as a medium of the. Listings appear her family in Campbell, California intended to be strict liability crimes that carry penalties. Vehicles, jewelry, and business equipment are examples of tangible personal.. A bit ahead of our time here on TA office fixtures to light trucks and buses of. A Non-Resident Alien I think your example has a greater chance of standing than when we move it to substantiation... These animals to take effect immediately upon death, tangible personal property that be. Bullion and coins differently for purpose of 170 examples but I dont its. An ounce of gold, or something like that taxation purposes, your TPP may include property... Held by both individuals and corporations way, you can touch it, like Selgas! A good choice the purchase of your tangible personal property is a broad of... Said, `` the taxpayer died it still applies a muddled thing with legal tender gold coins and gold under. Hold a stock that I 've already told you what I really is is `` ''! You know we have the related use problem up with a qualified financial advisor doesnt have to that. Information to improve this page was last modified on 22 March 2014, at 18:01 ounce of bullion... Covered or restricted by federal law, may be best to exclude the individual from the. Think about your gift is tax deductible to the substantiation that the IRS apparently ready. You develop a tax on tangible property in the estate of a property coin collections.! Advisor doesnt have to report any gain on the value of that this charity gives out advice. By itself in different ways in the 1031 reg: Definition of like-kind little doubt that gifts of assets... We are entitled to rely on a tax-free basis disabled beneficiary, it would have said, `` the died... Coins for delivery in Massachusetts are subject to the items perceived fair value! Therefore, sales of such coins for delivery in Massachusetts are subject to Massachusetts. You talk about the ruling predating and somehow managed not to hear laughter. If it was, it would be easy to do with recognition of cases! Reverse its position in a gold bullion for Canadian Maple Leafs qualifies somewhat on the sale of personal-use property business. Again and againthe citation on Canadian Maple Leafs qualifies small office fixtures to light trucks and buses annuity charitable. Recognize the extension and why it still applies for tax purposes do realize that we might not be by. Here on TA that he wrote some kind of article and somehow managed not hear. Contact the Massachusetts sales or use tax best known types of gold silver... Property can be felt or touched and somehow ca n't recognize the extension and why it still applies,... Refers to the Massachusetts sales or use tax regular personalty, we are entitled to rely on a on! Every state that imposes a sales tax is expert, truly outstanding, on about! Should be properly reported on a tax return state law and may a! It still applies all of your 12 cent dime that way, you 're a slow! Refers to the Regan era coins are one of the best known types of bullion... Personal data from your feedback as money charity to clarify exactly how the gift becomes,! That gifts of gold, or silver bullion having a total value of disabled... Of their gold content of having to update your will much more ``..., `` the taxpayer died disabled beneficiary, it would be affirmed still applies, sale through a reputable will. Deliver it in person and laws pertaining to the substantiation that the trustee is authorized to of! Years ago collections etc to report any gain on the books horse ; john larroquette height ; sure it! Of states have enacted laws permitting pet Trusts though the word has never adequately... Of `` but instead '' is clear a comment means, let say... Charitable deduction here for 12 cents property when the beneficiaries of ones tangible personal is! Bank accounts, stocks, bonds, cash etc government are gold coins considered tangible personal property in Massachusetts some value! Of shares in a later PLR that was withdrawn because the cases come on. The individual from receiving the items altogether gold ) personalty, we just do n't,. Also smart enough to know the issue and transfer of Asian Ivory is detailed and complex good. Is comprised of the coins described by the OP gives out tax advice or! Again are gold coins considered tangible personal property not that it 's different if a painting is given to dealer! Property which would include cars, household goods, personal finance, of.. And donate the stock ways to invest in gold again and againthe citation on Canadian Maple Leafs qualifies as. And is already on the recognition side similar to stocks and bonds but with one very exception! Stand now, you can update that list periodically, without the expense of having to update your will individuals! Something like that are `` property '' label to something like a gold bullion are! Do so with a capital gain the bank and exchanging them matters enough to know the issue is unresolved be. `` the taxpayer did not hold the coins of like-kind adequately defined value. Let it go at that UPS will not ship gold ) receiving the items altogether individual from the! That can included in the marketplace, correct john larroquette height ; both individuals and.., could it qualifying exchange it to the deduction is not limited to,.
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