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. The former doesn't give rise to a recognition event when you use it to buy something, for example. credit union 1 arena seating view; mickey blue eyes restaurant name. Goodman Law | Attorney Advertising, 14 Ridgedale Avenue, Suite 254, Cedar Knolls, NJ 07927 | Phone: 973.567.3849, Legal Blog For Elder Law and Estate Planning In New Jersey, Estate Planning Questions About Tangible Personal Property, Elder Law From an Estate Planning Perspective, The Difference Between Executors, Trustees, and Guardians, Avoiding the Pitfalls of Trust and Estate Administration, Divorced Parents with Special Needs Children, Estate Lawyer Planning for Solo Boomers, Estate Planning: Telling your Children What Youre Planning and Why. This one certainly didn't. On the realization side, the coins are treated as "property other than money." Intangible personal property is an item of individual value that cannot be touched or held. 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. I do realize, however, that the case law, etc. Again, the cases don't go so far to say that they are treated as "personal property." I have no problem with a taxing a 1031 exchange that involves coins. 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. I simply do not believe that the a U.S. gold coin, legal tender, is like a painting, when it comes to charitable deductions. 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. Given the potential for error, its best to consult with an attorney. Also, because the coins have both intrinsic and marketable value, in and of themselves, they cannot be considered intangible property, without more. An investor who purchased shares in a gold company in 2004 for one quarter its current price of $100,000 would owe $11,250 in capital gains tax if he were to sell that gold today. Chris writes: Did our house get taken out of the trust? 28 Thus, for example, a taxpayer donating American Eagle gold coins to a public . 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. And I'm sure you would submit the charity's letter as evidence. The principal difference between LPP and other personal use properties is that LPP usually increases in value over time. So what if it says "like kind." If you sell the timber, the sale is treated as a capital gain and not ordinary income. Just redo the list. 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. 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. Often, a Will will leave all such tangibles to a spouse or to children. 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. You keep focusing on "tangible personal property" in different contexts - estate tax, sales tax. Discussion Forum Index --> Advanced Tax Questions --> Donation of Gold Coins, Discussion Forum Index --> Tax Questions --> Donation of Gold Coins. Tangible personal property tax is paid by a landlord or company to its local government, but landlords or company owners can claim a deduction on federal income tax returns. Also, thank you for the article you wrote, Chris. Thanks in advance for your help! By the way, 1001(b) [amount realized], makes no distinction between intangible money and tangible money, Mot one that changes the definition of the coins as collectibles. 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. 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. First, here is what you wrote: Rev. For planning purposes, it is best to condition the gift of the firearm to a beneficiary who can establish his or her right to receive and carry a weapon. Those were the good old days. It's obvious Dennis and I won't get to a resolution here, because Dennis ignores the new paradigm that the U.S. is in the business of minting gold coins again, which for one thing, throws the historical "circulation" test espoused by the courts upside down. Planning for Tangible Personal Property from the Mundane to the Unique, trusts for the benefit of younger or disabled persons. When doing your estate planning, you want to feel confident that the items you bequeath to specific people on a separate list are, in fact, tangible property. The stock certificate evidences the Company you own. 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. The IRS concluded that South African Krugerrand gold bullion coins were not personal property for purposes of IRC 170(a)(3). 43, sec. He even wrote an article on it about a year ago, give or take. Maybe his intent is to buy some land with it, like Tom Selgas did. The Regan era coins are collectibles. But, I'm also smart enough to know the issue is unresolved. And, the stuff in 31 USC 5112 probably includes the coins described by the OP. I report the value as income (realization). 2 If the chandelier is to be severed from the property when the gift becomes complete, it is tangible personal property. It's different if a painting is given to a museum and the museum will display it. I wish I had more time to give back to TA. Collectibles 5739.01(DDD). And the term is used in different ways in the numismatist world. In the case of a disabled beneficiary, it may be best to exclude the individual from receiving the items altogether. . Consider a stock held long-term. Investments in gold can take a number forms, all of them readily marketable. Implication being, maybe these coins are treated as money. Likewise, I wouldn't bet the farm on your "out of context" estate tax rulings, as I mentioned above. [1]. Posted in: Estate Administration, Estate Planning, Probate, Wills, document.write(new Date().getFullYear()) E.A. platinum, gold, or silver bullion having a total value of $1,000 or more; . 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. f. Manufactured or mobile homes purchased in or delivered from another . How about finding a source that thinks the PLR *wouldn't* be affirmed? 23. This means that an investor who purchased in gold in 2004 for one quarter its current price of $100,000 would owe $21,000 in capital gains tax if he were to sell that gold today. From the RR: Obviously, if one side of a 1031 involves money, it would be cash consideration or boot. the list goes on. The examples below illustrate a gift of gold bullion, but apply equally to a gift of gold coins (taking the position that gold coins are tangible personal property) and shares of ETFs invested in gold bullion. Software as a Service. 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? Purchase gold bars, which can be as small as one ounce. 69-63 donation of coins not held primarily as a medium of exchange is a gift of tangible personal property. If I tender my gold coin at a store in the mall, I don't charge them sales tax for taking my coin, my tangible personal property, as you state. These assets can be held by both individuals and corporations. It is important to remember that if you are preparing a separate statement or list, it may only serve to distributetangible personal property, not cash, securities, negotiable interests or services. In most places there is a sales tax added to the purchase of your 12 cent dime. In other words, substantial authority is certainly nice, but it doesn't mean you're gonna win. The bullion value at the time of the donation is 40K and the charitable organization immediately sells the coins (unrelated use for the charity) . Real property, or real estate, is tangible property that is immovable. You talk about the ruling predating and somehow can't recognize the extension and why it still applies. 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. Gift annuity funded with gold bullion This is an indirect way to own gold. Proof of charitable contributions refers to the substantiation that the Internal Revenue Service requires to claim a donation as a tax deduction. Rul. But then again, maybe the IRS is re-thinking its position here, and its position in the subsequent PLR, as a few places have noted. SmartAsset does not review the ongoing performance of any Adviser, participate in the management of any users account by an Adviser or provide advice regarding specific investments. No exemption is available for distribution made in accordance with a Will or a Trust. Maybe I would label it: "Property other than money that is not tangible personalty for purposes of Section 170 of the Code." The value of tangible personal property may range from very nominal value e.g., old pots and pans to considerable value, for example, art, stamps and coins, gold bullion and gold and silver bars. Rev. her pearls go to her favorite niece, Alice. It includes all personal property that isn't considered real property or intangible property such as patents, copyrights, bonds or stocks. Sometimes, however, it isnt clear whether or not an item falls under the definition oftangible personal property. A limited liability company or a limited partnership may also be established for the purpose of owning firearms. 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. Additionally, certain types of TPP may be taxed at a different rate than other types, so there is no clear process across the board. 2. Tangible Personal Property (TPP) means all goods, chattels, and other articles of value (excluding some vehicular items) capable of manual possession and whose chief value is intrinsic to the article itself. . Personal property comes in two forms. 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. I have the PLR to rely upon. Tangible personal property includes fixtures attached to real estate if . It includes furniture, fixtures, tools, machinery, signs, equipment, leasehold improvements, supplies, leased equipment and any other equipment used in a business. 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. I tend to think an American gold coin, legal tender, like the OP's gold coin, is more akin to an appreciated stock than a painting. The retail classification is comprised of the business of selling tangible personal property at retail. 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. This means that taxes are assessed according to the items perceived fair market value. What matters is the value of the property. They are not rare and do not have any value beyond their bullion value (no numismatic value). It can be valued just as easily, you just weigh it instead of looking it up on a stock chart. Give me a cite that speaks specifically to U.S. gold coins minted under the Reagan act. This is a bullion coin. 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. 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. Since the value of the coins is more than $5,000 and the donation is not based on the coins face amount but rather their precious metal value, the client must get a qualified appraisal. If there is value other than as a medium of exchange the coin is tangible personal property. Tangible personal property is always depreciated . Point is that 170 has parsed through a lot of property types to provide guidance as to the 170 tax treatment. A coin evidences everything you could buy. Anyway, these debates are good. The law also (in all cited cases) makes a clear distinction between currency value and market value. gold, silver, or numismatic coins of any value; iii. They have value only because of their gold content. Household furnishings, books, tools, jewelry, motor vehicles and boats are some of the items which fall into the category of tangible personal property. I researched this some and could not find a definite answer. 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. 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. You inquire whether such sales will be subject to the Massachusetts sales or use tax. So are ETFs that invest in gold bullion. My mind is closed from the standpoint that I do not believe we should always apply old paradigms to new issues. It goes over the subject but does not get into the nitty gritty, leaving one to wonder. 6411 Ivy Lane, Suite 200 therefore, they can be measured and are considered tangible personal property. It just fleshed out the history of the cases and the facts, with a few observations here and there. When you sell personal-use property, such as cars and boats, in most cases you do not end up with a capital gain. Not sure if that would fit into the definition, as the definition starts with, ", "Here is what the letter from the charity said: ". 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. For those who are interested in life income, a gift annuity or charitable remainder unitrust are both reasonable alternatives to giving gold outright. 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 . We will use this information to improve this page. South African Krugerrand gold coins are one of the best known types of gold bullion coins. 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. So, more than likely, DAJ's coins are the ones described in 408(m). The more information one can obtain regarding an issue, the better. The fact is, however, the courts have repeatedly held that these coins are "property other than money. A year ago, give or take Massachusetts sales or use tax, document.write new! 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