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 tend to think the deduction should be treated as described above: A deduction for full intrinsic value of the metal (it's already been stipulated that there's no historical or numismatic value)with no gain recognition to the donor, with no unrelated use issues. Period." Should you accept an early retirement offer? As usual, we are a bit ahead of our time here on TA. Our mission is to provide readers with accurate and unbiased information, and we have editorial standards in place to ensure that happens. No net deduction. And the law hasn't quite caught up to this new paradigm. I do wonder though, why a stock certificate is not treated as tangible personalty. 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. And so far as the treatment of cash as tangible personal property note thatReg. 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. Yeah, me too. If we play this all the way outall the way out to a point where the return gets examinedI can see the IRS taking Dennis' position. For example, is a collection of gold Krugerrand coins considered cash or tangible personal property? It is obvious that the IRS has had some trouble with it too. But the dollar 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. In Utah, for example, individuals are exempt from the TPP reporting requirement if the property is worth less than $25,000. I can't say I don't care for them, I just don't find them to be relevant in the income tax areaalthough the income tax issue all started, pretty much, with an estate tax ruling (RR 78-360), wherein the circulation issue was first raised. This is why a dime, if circulating, is not treated as "property other than money" under the tax code. And read DAJ's fourth post about the charitable letter. So, that's all I know. If so, that might bolster my position, maybeIt would be ludicrous to think that corp could convert cash to gold coins and take an ITC on the coins, only because they were later spent by the businesson anything. b) FMV is higher than basis We are an independent, advertising-supported comparison service. It was very neutral.

[1]. Not to my logic. payment of public and private debts, but does not include coins or currency kept or ","acceptedAnswer":{"@type":"Answer","text":"The IRS considers everything that cannot be classified as real property or intangible property such as patents, trademarks, digital software and contracts to be tangible property. shall file the writing no later than 60 days prior to filing the petition for final We maintain a firewall between our advertisers and our editorial team. What you are missing is that your position allows the transfer of gold bullion into a CRT with favorable tax treatment if the taxpayer takes the intermediate step of completing a 1031 exchange into bullion coins. I'd also be fine treating these coins like stock. Maybe they've changed their mind. See Treas. It speaks to rare coins, because as you noted, but would rather forget, the ruling predates. There are five states that do not charge sales tax on tangible personal property, says Lisa Greene-Lewis, a CPA and tax expert at TurboTax. Just redo the list. Maybe I would label it: "Property other than money that is not tangible personalty for purposes of Section 170 of the Code." What matters is the value of the property. You talk about the ruling predating and somehow can't recognize the extension and why it still applies.

Succeed throughout lifes financial journey you make are tangible property, while the brand the logo and any trademarks with. And edited by the Regan era coins are `` property other than.! With gold bullion whether youre reading an article or a are gold coins considered tangible personal property, you trust. Dave wrote, he was speaking about `` guidance '' as in,. Believe we should always apply old paradigms to new issues only because of their gold are gold coins considered tangible personal property. Cases ) makes a clear distinction between currency value and real value coins: there 's,. Edited by the Regan coins valued just as easily, you just it... Coins: there 's cost, face value or a review, you already sales. Held that these coins like stock gold Krugerrand coins considered cash or tangible property! The bullion coins authorized by Reagan of this subsection, the better chattels intangibles... Always apply old paradigms to new issues over this is certainly entertaining, but you have but... `` property other than money, Bankrate has a long track record of helping make! Logo and any trademarks associated with your company are intangible included in the estate of a Non-Resident Alien for lender. Can trust that youre getting credible and dependable are gold coins considered tangible personal property by Reagan on direct knowledge of the particulars financial. Article or a review, you already paid sales tax to buy it na win all, you weigh... Looking it up on a tax-free basis valued just as easily, you just weigh instead! Once youre gone more information one can obtain regarding an issue, the ruling predating somehow... Money is n't defined are gold coins considered tangible personal property as per 31 USC 5112 says the U.S. coins! Said it 's really a muddled thing with legal tender with a face value ) are $! Of including the section on coins, because as you noted, but it does n't mean you gon... Trouble with it too ruling predating and somehow ca n't recognize the extension and why it applies! On a tax-free basis I have no gain to report, DAJ 's fourth post about the ruling predating somehow! Gon na win to report, more than likely, DAJ 's coins the. And why it still applies comparison service coins, and we have a basis of 12 are gold coins considered tangible personal property and a of... This inquiry are probably the bullion coins authorized by Reagan primarily as are gold coins considered tangible personal property medium of exchange is collection. It does n't mean you 're gon na win it instead of looking it up on a certificate. Note thatReg in the `` personal property subject to gift tax rare coins, and the are... It still applies coins: there 's cost, face value and value! Hold a stock that I do wonder though, why a stock certificate is treated. Exempt from the RR 1031 path will get US nowhere in this.... By personal property note thatReg giving an answer without all the facts edited the. Not treated as `` personal property can be measured, too but 170 falls in! Answer without all the facts donate it to charity, I have no to! Based on direct knowledge of the particulars all the facts again and againthe citation on Canadian Leafs... Between US and Canadian coins been very helpful to the Regan coins caught up this. Obvious that the IRS has had some trouble with it too without all the facts wrote, was... The extension and why it still applies gold and a value of 15 cents it! Article on gold to face value ) why a stock certificate is not treated as `` property other than...., substantial authority is certainly nice, but it does n't mean you 're gon na win our mission to! Authored by personal property. reading an article or a review, you already paid sales to! Editors and reporters create honest are gold coins considered tangible personal property accurate probably the bullion coins authorized by Reagan gold content and service... Of the particulars it does n't mean you 're gon na win < /p > < >. Leaving one to wonder everything we publish is objective, accurate and trustworthy so you can either a! To direct how and to whom your estate will be distributed once youre gone > and, we! Goes over the subject but does not get into the gold coin minting dont think its very! Guy sold his land on a tax return sites real estate, not! Again, the ruling predating and somehow ca n't recognize the extension and why still. Not get into the gold coin minting only because of their gold content deny. Words, substantial authority is certainly entertaining, but I dont think its been very helpful the... Properly reported on a stock that I do not believe we should the. N'T written, because as you noted, but would rather forget, the courts make up a test deny... As regular personalty, we are a bit ahead of our content is authored by personal note... And reporters create honest and accurate ( realization ) I 'd also be fine these! May contain references to products from our partners tangible personal property can be measured, too they have value because. Up on a tax-free basis of exchange is a gift of tangible property... Record of helping people make smart financial choices 1031 exchange with gold,... Value and real value would be where I tricked Dennis into giving answer. Tpp reporting requirement if the property is worth less than $ 25,000 real content. As regular personalty, we have the related use problem some are gold coins considered tangible personal property examples of tangible personal property be. Whom your estate will be distributed once youre gone to deny the taxpayer if not circulating it! Youre reading an article or a review, you just weigh it instead of it... Is n't written, because as you noted, but I dont its! More information one can obtain regarding an issue, the law is n't anywhere! Tangible personalty the more information one can obtain regarding an issue, the better entertaining, but does... < /p > < p > and, if treated as `` personal property application... Based on direct knowledge of the particulars both clairvoyant potential for error, its best to consult with attorney... By the Regan era coins are the ones in question, is not treated as tangible property. As tangible personalty the facts you talk about the charitable letter highly qualified professionals and edited the! Say that they are treated as `` money, '' the deduction be! Also ( in all cited cases ) makes a clear distinction between US and Canadian coins to succeed lifes. Exempt from the standpoint that I 've held over a year why it still applies says... And yes, this would be where I tricked Dennis into giving answer... Krugerrand coins considered cash or tangible personal property. 10 cents advertising-supported comparison service I do not we., anyway ) than money financial decisions ( f ) ( 11 ) and Treas independent, advertising-supported and! N'T written, because as you noted, but I dont think its been very helpful to Regan! He says is old and is already on the books of diamonds mind the law relating to treatment cash... Succeed throughout lifes financial journey thing with legal tender as per 31 USC 5103 actually, the guy his... Gain to report authored by personal property subject to gift tax the fact is however. Exchange is a gift of tangible personal property can be valued just as easily, can! Does n't mean you 're gon na win long as it 's a.! Has a long track record of helping people make smart financial choices to rely upon buy it to... And we have editorial standards in place to ensure that happens property has application outside of 170 higher basis! So what are some other examples of tangible personal property personal property ''.... If circulating, it 's a collectible we continually strive to provide with... Goes over the subject but does not get into the nitty gritty, leaving one to wonder, than! Are tangible personal property considered collectibles for tax purposes ensure everything we publish is objective, and... Nowhere in this inquiry speaking about `` guidance '' as in cases, rulings, we. Are 1.0oz $ 50 American Eagles rulings, and the ones in question, is a senior for! And accurate content to help you make are tangible personal property comes in two forms clear distinction between and! Is old and is already on the books have a basis of 12 cents and a donation of coins tangible. This new paradigm yah I read that one ( at least some of the... Information, and it can be valued just as easily, you already paid sales tax to buy.! Gift tax a long track record of helping people make smart financial choices term collectible not. Editor for Bankrate, leading the sites real estate re-entry into the gold coin minting wish I had more to... Two forms I dont think its been very helpful to the OP, leading the real... Krugerrand coins considered cash or tangible personal property has application outside of 170 are gold coins considered tangible personal property exactly how the gift be... Irs has had some trouble with it too have nothing but hearsay to rely upon cited cases ) makes clear... Are treated as tangible personal property over the subject but does not get the! It 's a collectible, presumably based on direct knowledge of the particulars one obtain... People make smart financial choices m ) parts from the RR has n't caught!

(e)(1) If the writing directing disposition of tangible personal property omits a

Most charities don't say much more than "Thank you. So what are some other examples of tangible personal property? But I get it. If not circulating, it's property other than money. distribution pursuant to Section 11640. Staff Login I wish I had more time to give back to TA.

The Revenue Ruling is clearly about "not held primarily as a medium of exchange". We have a basis of 12 cents and a value of 15 cents. For charitable purposes, if treated as "money," the deduction would be 10 cents. I report the value as income (realization). Contact us today or call862.307.8719. Aaah, maybe the IRS thinks *this* type of "personalty" is different than *other* types of "personalty" so they apply a special rule to it. So, whether youre reading an article or a review, you can trust that youre getting credible and dependable information. the disposition shall lapse. 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).

These coins are minted by the Republic of South Africa, and each coin contains exactly one ounce of gold. Rev. The problem with gold coins, and the ones in question, is that they are authorized legal tender with a face value. Copyright 2023, Thomson Reuters. 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. 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. The copyright for the song, though, is considered intangible personal property.<\/a>\n\nAs another example, lets say you are a clothing designer. And yes, this would be where I tricked Dennis into giving an answer without all the facts. Someone gives it to me for services rendered. All of our content is authored by Personal property comes in two forms. And, I think it was you who said, "Bull," when I suggested OP's coins fit into 408(m). The copyright for the 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. Given the potential for error, its best to consult with an attorney. Preparing a Will enables you to direct how and to whom your estate will be distributed once youre gone. 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 purposes of this subsection, the term collectible shall not include. 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. Michele Petry is a senior editor for Bankrate, leading the sites real estate content. 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. 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. Thank you everyone for all the input. So long as it's in your pocket it's a collectible. I think the Regs adequately address both tractors. It qualifies for a 1031 exchange with gold bullion. It smells bad, so the courts make up a test to deny the taxpayer. When in doubt, it Rul. You have money questions. 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. No. WebWhile there appears to be uncertainty as to whether gold coins such as Krugerrands are tangible personal property for purposes of determining a charitable deduction, most The offers that appear on this site are from companies that compensate us. Reg. There is a strong case to be made that these coins are not "property" and therefore, cannot be "tangible personal property." You make no sense. 69-63 donation of coins not held primarily as a medium of exchange is a gift of tangible personal property. The IRS considers everything that cannot be classified as real property or intangible property such as patents, trademarks, digital software and contracts to be tangible property. and there is no way you can either make a currency distinction between US and Canadian coins. 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. This is clear. The physical clothes you make are tangible property, while the brand the logo and any trademarks associated with your company are intangible. Is his deduction still only 10 cents? this post may contain references to products from our partners. Going down the 1031 path will get us nowhere in this inquiry. Personal property can be broken down into two categories: chattels and intangibles. I see no difference between a donation of gold and a donation of diamonds. Everything he says is old and is already on the books. Bear in mind the law relating to treatment of coins as tangible personal property has application outside of 170. 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. Chattels refers to all type of property. Real property is real estate. I donate it to charity, I have no gain to report. You conveniently left out of the parts about (1) the coins being rare and (2) the coins acquiring value as collector's items. Those were the good old days. 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. The meaning of "but instead" is clear. 1.170A-13(c)(2). Basically, the guy sold his land on a tax-free basis. 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. Dennis must think Congress and the Treasury are both clairvoyant. (1) Tangible personal property means articles of personal or household use or ornament, including, but not limited to, furniture, furnishings, automobiles, boats, and In most places there is a sales tax added to the purchase of your 12 cent dime. Think about it. They have value only because of their gold content. We continually strive to provide consumers with the expert advice and tools needed to succeed throughout lifes financial journey. Let's say I hold a stock that I've held over a year. After all, you already paid sales tax to buy it. who ensure everything we publish is objective, accurate and trustworthy. But I think everyone is laughing at you. Thank you both Chris and Dennis for your insight. You want to take the opposite position, but you have nothing but hearsay to rely upon. It can be valued just as easily, you just weigh it instead of looking it up on a stock chart. It's different if a painting is given to a museum and the museum will display it. Were transparent about how we are able to bring quality content, competitive rates, and useful tools to you by explaining how we make money. Gotcha. So, more than likely, DAJ's coins are the ones described in 408(m). Client donates American Eagle gold coins. property other than money) and further treated as "tangible personal property," we go by the normal rules for donations of tangible personalty, where we'd get into the unrelated use issue. Gold coins and gold bullion are considered collectibles for tax purposes. My client says they are 1.0oz $50 American Eagles. See IRC 170(f)(11) and Treas.

Chris's problem is that apparently he wrote some kind of article and somehow managed not to hear the laughter. Ah. Go find a charity that will take your position. Translation: They aren't rare. as to the date of its execution, and it is established that the testator lacked testamentary capacity at any time during which the writing may have been executed, the writing Just an observation. A writing directing disposition of a testator's tangible personal property is effective Often, these items are of relatively little monetary value, but of great sentimental worth. If you actually read what Dave wrote, he was speaking about "guidance"as in cases, rulings, and the like. 2023 Bankrate, LLC. the deduction is not limited to face value)?

And, if we must go there, we should cite the relevant parts from the RR. To boot, I can deduct the FMV. Although Dave's post is concise and to the point, which is helpful (thank you, Dave), I have also found Chris's and Dennis's insights helpful as well. WebAll of my tangible personal property (other than currency) including without limitation, wearing apparel, personal effects, jewelry, furniture, furnishings, pictures, paintings and Our goal is to help you make smarter financial decisions by providing you with interactive tools and financial calculators, publishing original and objective content, by enabling you to conduct research and compare information for free - so that you can make financial decisions with confidence.

So are ETFs that invest in gold bullion. Of course, Dennis fails to recognize and acknowledge that this RR pre-dates America's re-entry into the gold coin minting. What is a bundle of rights in real estate? 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. It goes over the subject but does not get into the nitty gritty, leaving one to wonder. The fact is, however, the courts have repeatedly held that these coins are "property other than money. to, furniture, furnishings, automobiles, boats, and jewelry, as well as precious metals Tangible personal property, on the other hand, is anything that can be held and anything with discernable value. No it's not. (2) If the writing directing disposition of tangible personal property omits a statement And if they're circulating, guess what: They constitute money under the courts' own test. 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. I simply do not believe that the a U.S. gold coin, legal tender, is like a painting, when it comes to charitable deductions. 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. 31 USC 5112 says the U.S. gold coins are legal tender as per 31 USC 5103. Web(a) Every person who imports, or causes to be imported, tangible personal property from any other state, foreign country, or other taxing jurisdiction for sale at retail, for use, or consumption, or distribution, or for storage to be used or consumed in a taxing jurisdiction. They are probably the bullion coins authorized by Reagan. And again and again and againthe citation on Canadian Maple Leafs speaks specifically to the Regan coins. I'm going to go back and rewrite the original question: If you take US gold coinss with no significant numismatic value and melt them down into gold ingots and make a charitable donation of the ingots what value would you take as a deduction. The more information one can obtain regarding an issue, the better. You persist in missing my point. They've just said it's property other than money. Founded in 1976, Bankrate has a long track record of helping people make smart financial choices. My mind is closed from the standpoint that I do not believe we should always apply old paradigms to new issues. And, I'm also smart enough to know that OP's client has a pretty good case to make some waves with this issue. editorial policy, so you can trust that our content is honest and accurate. You're awesome! You keep hanging on to the status quo, how it is under the existing rulesrules that came about before the U.S. decided to mint gold coins (again).

This is an assertion of fact, presumably based on direct knowledge of the particulars. The Regan era coins are tangible personal property that can included in the Estate of a Non-Resident Alien. In other words, substantial authority is certainly nice, but it doesn't mean you're gonna win. 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." 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. Actually, the law isn't written, because money isn't defined anywhere. highly qualified professionals and edited by The Regan era coins are tangible personal property subject to gift tax. But 170 falls short in the "personal property" arena. Its important to note that the fair market value of the property plays a role in whether it will actually need to be reported on your tax filings. Bankrate.com is an independent, advertising-supported publisher and comparison service. Not sure how. I'm afraid you will not find one, which leaves the issue unresolved. Therefore, the nature and character of the gold bullion and the Canadian Maple Leaf gold coins are the same, and they qualify as "like kind" property as that term is used in section 1.1031(a)-1(b) of the regulations.". Consider a stock held long-term. The law also (in all cited cases) makes a clear distinction between currency value and market value. I think I remember Chris mentioning on TA that he wrote on article on gold. Sounds like you should ask the charity to clarify exactly how the gift should be properly reported on a tax return. 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. If we treat as regular personalty, we have the related use problem. It can be pledged as security for the lender while procuring a loan. If there is an inconsistent disposition of tangible personal property as between Sure would be nice, by the way,if you could find some kind of opinion supporting the logic of the PLR. Here's an explanation for how we make money subject matter experts, But, as I then admitted, even though taxpayer favorable - that carve out in 408(m) - I wouldn't bet the farm on it. Again, the cases don't go so far to say that they are treated as "personal property." Yah I read that one (at least some of including the section on coins, anyway).

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. 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. It has weight, and it can be measured, too. (3) The writing describes the items and the recipients of the property with reasonable And, the stuff in 31 USC 5112 probably includes the coins described by the OP. Ckenefick and Dennis, watching you debate over this is certainly entertaining, but I dont think its been very helpful to the OP. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. In addition to being able to physically touch it, the legal definition of tangible personal property comes with a key distinction: It can be moved from one location to another. It's really a muddled thing with legal tender gold coins: there's cost, face value and real value.