And your proof of this is what? So are ETFs that invest in gold bullion. In law, tangible property is literally anything that can be touched, and includes both real property and personal property (or moveable property), and stands in distinction to intangible property. "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. . Rul. Obviously, an author's opinion in an article isn't authoritative "guidance." Regardless, sale through a reputable dealer will also need to be arranged. Property taxes in America are collected by local governments and are usually based on the value of a property. Working with an adviser may come with potential downsides such as payment of fees (which will reduce returns). You keep ignoring your own 408 citation. Cryptocurrency is not "tangible property" because it cannot be touched; instead, it exists . You want your 12 cent dime to be money, put it in an account and add 10 cents to your balance. 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. Some counties and cities require the filer to list all property on the tax form and to provide the fair market value and cost for each tangible property. Makes no sense to me, but. 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. Personal property, as defined in RCW 84.04.080, falls into two categories; namely, tangible personal property, that is to say, things which have a physical existence, and intangible personal property which consists of rights and privileges having a legal but not a physical existence. Client donates American Eagle gold coins. Intangible personal. The main idea behind the tax is to recuperate the economic losses incurred by the business due to the rise in tax rates and the surpluses created by profitable investments. Ok, Dennis. Assume that the trustee is able to sell the bullion a few days later. There is a growing list of plants and animals in which there are blanket prohibitions against possession and transportation of same. I don't dispute that and never have. They are not equivalent to money, meaning their face value. Thought must also be given to whether the packing, shipping and transportation of items should be an expense of the estate or borne by the individual beneficiaries. The client must also complete Form 8283 (including Section B) and attach it to the return. Dennis points are more than well taken. Assets like property, plant, and equipment, are tangible assets. Typically, individual retirement accounts (IRAs), which are tax-advantaged, can be used to hold tangible assets, such as gold and silver coins. I simply do not believe that the a U.S. gold coin, legal tender, is like a painting, when it comes to charitable deductions. 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. 2 If the chandelier is to be severed from the property when the gift becomes complete, it is tangible personal property. Some states only apply a tax on tangible property in the year the property was purchased. Then, the appraiser will compare these values to . But it doesn't really matter. I knew they'd fit in there, hence my bet. These assets can be held by both individuals and corporations. 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. Amortization vs. Depreciation: What's the Difference? We have a basis of 12 cents and a value of 15 cents. Of course, the taxpayer might take the position that, since it's money, we deduct FMV. Software as a Service. In general, tangible personal property consists of items such as jewelry, personal property, personal effects, family heirlooms, and other physical items. Thank you all for the input! If the donor lives nearby, he or she could deliver it in person. Contact us today or call862.307.8719. Ckenefick and Dennis, watching you debate over this is certainly entertaining, but I dont think its been very helpful to the OP. Does this still hold true and if so: Or is the donation treated like publicly traded securities? What you're trying to do, Dennis, is apply the OP's facts of "non-rare coins with no collector's value" to an RR that involves "rare coins and collector's value." You have seriously never heard of non-correlated investments? Right For purpose of 1031. I couldn't. However, this is what your state, county or local municipality believes the value to be according to their data. If your city or county assesses personal property taxes, they may require that you submit a disclosure of your property. The bullion value at the time of the donation is 40K and the charitable organization immediately sells the coins (unrelated use for the charity) . Wow, DAJCPA. What exactly does "legal tender" have to do with the issue? Because (1) they're more like stock held for long term appreciation than they are like a painting [i.e. However, if these items are reproduced without modification they are considered tangible personal property and subject to sales or use tax. Purchase gold coins, such as South African Krugerrands, Canadian Maple Leafs, or U.S. American Eagles. Dennis' points are taken, and again, he might very well win this one. 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. The rules and laws pertaining to the possession and transfer of Asian Ivory is detailed and complex. credit union 1 arena seating view; mickey blue eyes restaurant name. 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. You can touch it, move it and play it. 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. 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. But, as I then admitted, even though taxpayer favorable - that carve out in 408(m) - I wouldn't bet the farm on it. As usual, we are a bit ahead of our time here on TA. You skipped the table of contents section. An article written by someone isnt guidance; its someones opinion. Consider working with a financial advisor as you develop a tax strategy. 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. Shall we start a thread about *Bitcoin?*. I have the PLR to rely upon. Checklist for Personal and Tax Documents After a Natural Disaster. Identifying ones unique assets and carefully considering how best to distribute ones tangible personal property helps to avoid disputes among ones beneficiaries. Tangible personal property is always depreciated over either a five- or seven-year period using straight-line depreciation but is eligible for accelerated depreciation as well. Any new business-owning tangible property on January 1must file an initial tax return on the property. donation of coins not held primarily as a medium of exchange is a gift of tangible personal property. 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). Tangible personal property is anything with physical existence -- things that can be felt or touched. Trying to apply realization concepts and pre-dated Regs to something as novel as a newly minted U.S. gold coin, a new asset class, might not be suitable. That settles the issue according your logic. 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. In these cases, it may be better to direct that these more valuable items be sold and the Will would direct how the proceeds of the sale are to be distributed. 2 & Ch. Dennis of course knows nothing about this test, although it is the backbone to all the courts' decisionswhich makes one wonder how the courts will change the test in light of the U.S. now minting coins again. Anyway, these debates are good. Reg. I'm also smart enough to know that OP's client has a pretty good case to make some waves with this issue. Best Review Site for Digital Cameras. Thank you both Chris and Dennis for your insight. Investments in gold can take a number forms, all of them readily marketable. Go find a charity that will take your position. For charitable purposes, if treated as "property" (i.e. The charitable deduction is computed using Decembers 1.6% IRS discount rate. These are newly minted coins. Maybe his intent is to buy some land with it, like Tom Selgas did. The largest gold ETF owns gold bullion worth about $70 billion. The twisting reflects reality. Therefore, pursuant to the rationale of Rev. 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. In comparison to intangible personal property, tangible property can be touched. 408(m). Dennis writes: her pearls go to her favorite niece, Alice. Examples Preparing a Will enables you to direct how and to whom your estate will be distributed once youre gone. Liza is also the author of Busy Family's Guide to Estate Planning: 10 Steps to Peace of Mind. I think everyone but Kenefick can hear the laughter. Youre more likely to encounter tangible personal property taxes if you own a business, however. There are no guarantees that working with an adviser will yield positive returns. The more information one can obtain regarding an issue, the better. Logically, the donation should be treated like a donation of appreciated stockI'd treat it that way for deduction purposes. One of the many reasons a person creates a Will is to specify who is to receive or what should happen with their tangible personal property when they die. Heres why. As such, applying a strict "personal property" label to something like a gold coin might not be appropriate. 2. As mentioned, tangible personal property is anything that can be touched, moved or consumed, with the exception of real property (real estate) and intangible assets with a recognized value (stocks, bonds, patents and the like). Translation: They aren't rare. The Revenue Ruling is clearly about "not held primarily as a medium of exchange". I think the Regs adequately address both tractors. the gold watch goes to her daughter and the stamp collection goes to her son. Tangible personal property taxes are typically assessed at the state level, though they may be dictated by county, city or local municipality. A gift of physical gold, be it bullion or coins, means you have to worry about how you will take possession of it. Id like to step in and try to simplify this matter. Retail classification; definitions. $0.00. And, I'm also smart enough to know that OP's client has a pretty good case to make some waves with this issue. Art, valuable collections, pianos and other fragile items, are expensive to insure and to ship. 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. 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. Given the potential for error, its best to consult with an attorney. A lock icon ( Obviously, if the coins in the RR did not acquire any "collector's value," then the RR would have had to address that fact and would have been worded completely different. (Might also want to try paying your local property taxes with onesee how much credit they'll give youor, just ask Mr. Klein (Crummey vs. Klein Indep. Tax Implications of Contributing Gold to Charity Then we'll put the coins in an "account" and transfer the account to charity. Not to my logic. Chris writes: Gift annuity funded with gold bullion So what if it says "like kind." With Examples. But 170 falls short in the "personal property" arena. And you're only talking about those state that actually impose a tax. And whose to say what OP's holding purpose was? In addition, Dave was speaking to DAJ's comment, which immediately preceding his: I had found a few of the articles linked herein. therefore, they can be measured and are considered tangible personal property. preferred parking dodger stadium. Give me a cite that speaks specifically to U.S. gold coins minted under the Reagan act. Often, a Will will leave all such tangibles to a spouse or to children. I'm also smart enough to know that the IRS might very well take your position on the matter, with respect to newly minted American Gold Eagles. Different rules depending on the situation. 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. 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. Such as South African Krugerrands, Canadian Maple Leafs, or U.S. American Eagles goes her. 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