are gold coins considered tangible personal propertyare gold coins considered tangible personal property

the will, except for money that is common coin or currency and property used primarily The mere fact that there are cases wherein people have used these coins to make asset acquisitions bear it out: That these coins are circulating. Maybe OP should drop his coins into an entity and donate the stock. 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. I see no difference between a donation of gold and a donation of diamonds. All rights reserved. This one certainly didn't. You keep ignoring your own 408 citation. WebAny other tangible personal property that the IRS determines is a "collectible" under IRC Section 408(m). Stock, real estate, inventory, taxidermy property, patents, partial interests, self-created, etc. Taxpayer's should pay tax on the value of stuff they get. You persist in missing my point. However, if youre using that desk as part of a small business or in your role as a freelance worker, it may be a different story. Copyright 2023, Thomson Reuters. I myself don't think the parsing, which is clearly going on in Sec 170, absolutely contemplates all types of property, especially in light of the U.S. Government getting back into the gold minting business. Ah. Argument can be made that they're "money" under the tax code, since case law brings up "circulating" as a critical distinction between "money" and "property other than money." 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. Uhhh, OP's charity already has taken that position. 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. to receive property in the writing dies before the testator, the property shall pass If not circulating, it's property other than money. Cite this article: FindLaw.com - California Code, Probate Code - PROB 6132 - last updated January 01, 2019 It was very neutral. her pearls go to her favorite niece, Alice. Dennis says, "bull," however. 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. (f)(1) Concurrent with the filing of the inventory and appraisal required by Section 8800, the personal representative shall also file the writing that directs disposition

How much should you contribute to your 401(k)? 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. (h) As used in this section, the following definitions shall apply: (1) Tangible personal property means articles of personal or household use or ornament, including, but not limited But the carve out, although it doesn't mean that much, at least in my mind, makes one wonder if the implication is that the carved out coins are, in fact, "money." What's interesting, these cases go to court because someone has used these coins in commerce, to pay wages, or to receive payment, but the courts say the coin type was "non-circulating." Go find a charity that will take your position. 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. It speaks to rare coins, because as you noted, but would rather forget, the ruling predates. And note, the RR *didn't* say, "the coins can be felt and touched, so they are tangible personalty property.". Rul. Bankrate has answers. But, I'm also smart enough to know the issue is unresolved. But I don't think that it's all that relevant in the donation context. Thank you everyone for all the input. 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. made by the will. The former doesn't give rise to a recognition event when you use it to buy something, for example. This is clear. statement as to the date of its execution, and if the omission results in doubt whether Bankrate follows a strict editorial policy, Of course, the taxpayer might take the position that, since it's money, we deduct FMV. 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.". Gotcha. I'd be fine taking the position that the gold coins were cash, for 170 purposes, seeing that's what they are, under the USC. I couldn't. You can't extend the logic b/c the RR logic applies to the specific coins involved in the ruling. Often, individuals use it regarding the tangible property such as a purse or clothing. Bankrates editorial team writes on behalf of YOU the reader. Personal property comes in two forms. What is a bundle of rights in real estate? Yes, I hear the laughter, Dennis. But I think everyone is laughing at you. And somehow you figure 170 is going to be different? dollar ($25,000) limit described in this subdivision. editorial integrity, Implication being, maybe these coins are treated as money. Thats because, in most cases, the government isnt going to tax you for your desk. shall file the writing no later than 60 days prior to filing the petition for final 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. So, your house, your driveway, your tool shed, your backyard garden these are all considered real property. Our experts have been helping you master your money for over four decades. It makes me think of Sec 121 and the games that used to be played wherein taxpayer would exchange, say, investment land, for a rental property, then later convert the rental into a primary residence, and then sell the primary residence tax free under Sec 121. 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. Obviously, an author's opinion in an article isn't authoritative "guidance." easy to value; the PLR does mention holding purpose, although I agree, the PLR isn't worth a ton] (2) plus, they're denominated, U.S. Legal Tender [a la regular coinage, which is treated as money] and (3) I'm not convinced the existing charitable rules contemplated the U.S. getting back into the gold minting business and (4) there's a carve-out in 408(m) and (4) the government touts them as investments and (5) if you turn one in to the Federal Reserve, you get face value only, indicative of money. WebAny coin containing gold In addition, any coin (s) packaged in a way that would lead you to believe they have an additional value, probably are, such as sealed mint or proof packaging, or occasionally they are in a coin flip holder. Translation: They aren't rare. The law also (in all cited cases) makes a clear distinction between currency value and market value. And, you can change your mind about who will receive the coins as often as you like. (a) Notwithstanding any other provision, a will may refer to a writing that directs The Regan era coins are collectibles. You sell a dime for more than 10 cents you will be taxed at collectible rates. And whose to say what OP's holding purpose was? monetary deposits, documents of title, or securities. Often, these items are of relatively little monetary value, but of great sentimental worth. There's a ton of them out there. If your point is that the ruling is totally on point, to newly minted coins, and therefore, should be extended to newly minted coins, yet doesn't contemplate newly minted coins because there were no newly minted coins in existence at the time of the Ruling, then it's a safe bet the Ruling doesn't draw a conclusion on newly minted coins that are legal tenderbut only on "rare" coins that existed at the time of the Ruling and that were the subject of the Ruling. Rev. Personal property can be broken down into two categories: chattels and intangibles. Then you are categorically calling the people who make this assertion liars? 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. 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. A good rule to follow is that some articles would usually be found in a building regardless of the use made of the building. 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. What kind of property is considered tangible property? http://www.pgdc.com/pgdc/tangible-personal-property. I'm just thinking that something's gotta give somewhere to align all of this. (2) Notwithstanding paragraph (1), if the writing has not been found or is not available I would think closer to behind the eight ball, but I certainly don't disagree that the PLR can be relied on to avoid penalties. 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. distribution pursuant to Section 11640. FindLaw Codes may not reflect the most recent version of the law in your jurisdiction. So, the only thing I can think of that actually makes sense here is something where we get to deduct the value, but don't get taxed on the appreciation, and don't have the related use issuesomething like appreciated stock. "}},{"@type":"Question","name":"What is tangible personal property versus intangible personal property? As such, it can be moved around. We are an independent, advertising-supported comparison service. 82-96 -- exchange of bullion for Canadian Maple Leafs qualifies, But then, when you agreed with Fogel you didn't seem to notice that he dismissed all of your positions as irrelevant, "Because the Canadian Maple Leaf gold coins are bought and sold for their gold content, they are bullion type coins. We are compensated in exchange for placement of sponsored products and, services, or by you clicking on certain links posted on our site. "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. 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. So, I would say that I have a pretty open mind. An article written by someone isnt guidance; its someones opinion. When in doubt, it It is an alloy of copper-nickel with a bit of manganese to Maybe, but we're not talking about sales tax. Not sure how. Collectibles are taxed as capital gains or losses similar to stocks and bonds Your "check" is twenty times the size of my coin. Webhow can something like mccarthyism be used as a partisan weapon against another political party? And your proof of this is what? See Treas. Neither the RR or PLR deal with recently minted U.S. Gold Coins, as I have told you many times. Let's say I hold a stock that I've held over a year. My writing gets easier, as you dig yourself into a deeper hole. The problem with gold coins, and the ones in question, is that they are authorized legal tender with a face value. (d) The testator may make subsequent handwritten or signed changes to any writing.

capacity at any time during which the writing may have been executed, the writing But I don't think the Regs contemplated newly minted, U.S. gold coins. Those were the good old days. ? Reg. That what they wrote contemplated a very specific type of "property" that didn't exist when Congressional intent was manifested, when the law was written and when the Regs were written. 31 USC 5112 says the U.S. gold coins are legal tender as per 31 USC 5103. So, more than likely, DAJ's coins are the ones described in 408(m). He even wrote an article on it about a year ago, give or take. I get it. Yeah, me too. Good question. Legal Tender. five thousand dollars ($5,000), that item shall not be subject to this section and He offers no evidence to support this position and apparently he seems to think that OP should be comfortable walking into Tax Court with nothing but the language of the PLR. Will Biden's Student Loan Program Survive the Supreme Court. Contact us. If there is an inconsistent disposition of tangible personal property as between Unless you are suggesting that the people who make this assertion are naively believing in an urban legend the specific help is that nine months after the ruling was issued the IRS decided that if you take the PLR position your deduction will be disallowed. There is tangible personal property which would include cars, household goods, personal effects, guns, coin collections etc. The term tangible personal property does not mean real property, a mobilehome as defined in Section 798.3 of the Civil Code, intangible property, such as evidences of indebtedness, bank accounts and other If the courts want the "circulating" test, then by all means, let's flesh it out.

(2) If the writing directing disposition of tangible personal property omits a statement That's why I like the "akin to an appreciated stock" argument better. As tax professionals, we are entitled to rely on a private letter ruling as substantial authority. writing shall not exceed twenty-five thousand dollars ($25,000). They are the equivalent of gold bullion under the law. But I get it. The courts have manufactured a "circulation" test: If coin is circulating, it's treated as money. And, I'm also smart enough to know that OP's client has a pretty good case to make some waves with this issue. Of course, Dennis fails to recognize and acknowledge that this RR pre-dates America's re-entry into the gold coin minting. Hence, they are generally movable items. If the value of an item of tangible personal property described in the writing exceeds I mean, hell, if the coin is tangible because you can touch, then so is a stock certificate or bond. If you treat as "money," you run the risk of being able to deduct their face value. This is how all the cases come down on it on the recognition side. Bankrate has partnerships with issuers including, but not limited to, American Express, Bank of America, Capital One, Chase, Citi and Discover. You can certainly touch and feel the stock certificate. So are ETFs that invest in gold bullion. All of our content is authored by 1)Does the client get the bullion value of the gold as a charitable donation deduction (i.e. We have Congressional intent. Therefore, the Canadian Maple Leaf gold coin is property rather than money for purposes of section 1031(a) of the Code. Posted in: Estate Administration, Estate Planning, Probate, Wills, document.write(new Date().getFullYear()) E.A. So long as it's in your pocket it's a collectible. I think more parsing is needed. Of course, the word "money" isn't defined in the Tax CodeI made that point too, Dennis, but maybe you missed it. Holding purpose might matter too. Couldn't have anything to do with recognition of the fact that it's tangible personal property, could it? Staff Login | https://codes.findlaw.com/ca/probate-code/prob-sect-6132/. In the realization area, the personal property distinction wasn't really relevant, all that was relevant was whether or not a realization event had occurred. 69-63 donation of coins not held primarily as a medium of exchange is a gift of tangible personal property. [1]. Tangible personal property is located inside real property. that item shall be disposed of pursuant to the remainder clause of the will. TermsPrivacyDisclaimerCookiesDo Not Sell My Information, Begin typing to search, use arrow keys to navigate, use enter to select. 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. Or, in this case is the dime now tangible property, not money, and he gets his basis, 15 cents, as a deduction. Right For purpose of 1031. the disposition shall lapse. It can be pledged as security for the lender while procuring a loan. You can touch it, move it and play it. 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." Circulating, from what I can tell, even though the word has never been adequately defined. Fair enough. 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. Go find a charity that will take your position. (b) The failure of a writing to conform to the conditions described in paragraph (2) These coins are minted by the Republic of South Africa, and Dennis must think Congress and the Treasury are both clairvoyant. PLR 9225036 is the only relevant guidance here. A completely closed mind. It is treated as "money," despite what Dennis thinks. So what are some other examples of tangible personal property? 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 You ever dealt with a donation of non-numismatic coins? In most places there is a sales tax added to the purchase of your 12 cent dime. You want to take the opposite position, but you have nothing but hearsay to rely upon. Note: You are using this website at your own risk, subject to our, http://www.aicpa.org/publications/taxadviser/2013/january/pages/clinic-story-07.aspx, http://www.taxalmanac.org/index.php/Discussion:Donation_of_Gold_Coins, Lacerte Professional Tax Preparation Software, Newsletter for Accounting & Tax Professionals. 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? Gold, silver, platinum, palladium, and coins. Sometimes, however, it isnt clear whether or not an item falls under the definition oftangible personal property. 91-172), so its no help. And you're only talking about those state that actually impose a tax.