are gold coins considered tangible personal property

Therefore, the Canadian Maple Leaf gold coin is property rather than money for purposes of section 1031(a) of the Code. Fair enough. (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. These assets can be held by both individuals and corporations. Additionally, certain types of TPP may be taxed at a different rate than other types, so there is no clear process across the board. Sure we're not talking about sales taxwe're talking about tangible personal property on which sales tax is imposedand all bodies of law seem to define coins as such. The Comptroller treats the sale of software, canned or custom, as the taxable sale of tangible . I researched this some and could not find a definite answer. Tangible property is personal property that can be physically handled, including but not limited to: Clothes; Jewelry; Furniture; and Vehicles. Go find a charity that will take your position. Now, with all that said: I readily admit that, on the realization front, gold coins are treated as "property other than money." 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? 22 E-books are also taxable. If the donor lives nearby, he or she could deliver it in person. Thank you both Chris and Dennis for your insight. 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." 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. The ruling doesn't speak to Sec 1031. A letter from the property appraisal office will usually be sent by mail to the company notifying it to file taxes on its property. In most places there is a sales tax added to the purchase of your 12 cent dime. Also, because the coins have both intrinsic and marketable value, in and of themselves, they cannot be considered intangible property, without more. Tangible personal property means: articles of personal or household use or ornament, for example, furniture, furnishings, automobiles, boats, airplanes, and jewelry, as well as precious metals in any tangible form, for example, bullion or coins. 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. It qualifies for a 1031 exchange with gold bullion. In addition to paying sales tax on the things you buy, you may also be required to pay taxes on its perceived fair market value later on. The gold and silver coins clearly are tangible property, in that they can be felt or touched. You might not care for State sales tax law but the consistent use of this language has to have meaning. The only states that exclude tangible personal property from taxation altogether are: The process of levying taxes on tangible personal property varies wildly from one state to the next, and may even vary between different counties and local municipalities. That settles the issue according your logic. New interpretations abound. 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. . 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." Some small boats require modest paperwork to transfer ownership. Stock, real estate, inventory, taxidermy property, patents, partial interests, self-created, etc. Planning for Tangible Personal Property from the Mundane to the Unique, trusts for the benefit of younger or disabled persons. They are a lot of someone's opinion. Tangible property is physical assets such as collectible coins, jewelry, military medals, stamps, antiques, savings bonds or other physical items. 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. . 1)Does the client get the bullion value of the gold as a charitable donation deduction (i.e. Sec. 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. 31 USC 5112 says the U.S. gold coins are legal tender as per 31 USC 5103. Aircraft & Boats Transfer and ownership of aircraft is handled by the Federal Aviation Agency. The charity, of course, will need to file a Form 8282 if it sells the bullion or ETF shares within three years of receiving the gift, which almost certainly it would. Often, a Will will leave all such tangibles to a spouse or to children. Thank you everyone for all the input. Actually, the law isn't written, because money isn't defined anywhere. 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. When the charity in question calls the donation "like kind" property the statement has no meaning. 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. To boot, I can deduct the FMV. If you guys are thinking, "Dennis seems to be focusing on the status quo and ignoring the fact that the U.S. has started minting gold coins again," you would be right. platinum, gold, or silver bullion having a total value of $1,000 or more; . This shouldnt be an issue for gold bullion, which is readily marketable, except perhaps when funding occurs at the very end of the year). In OP's case, I think we fail the test b/c coins will be immediately sold. So, estate jewelry, and coins, and the like are whats called tangible personal property in estate planning. And, you can change your mind about who will receive the coins as often as you like. 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. Finding a qualified financial advisor doesnt have to be hard. So long as it's in your pocket it's a collectible. The Regan era coins are like kind with gold bullion. Dennis must think Congress and the Treasury are both clairvoyant. 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. Liza is also the author of Busy Family's Guide to Estate Planning: 10 Steps to Peace of Mind. 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. And so far as the treatment of cash as tangible personal property note thatReg. c) Carries no numismatic value.". But then, when you agreed with Fogel you didn't seem to notice that he dismissed all of your positions as irrelevant. 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.". Bonus depreciation is a tax break that allows businesses to immediately deduct a large percentage, currently 100%, of the purchase price of eligible assets. 91-172), so its no help. There is little doubt that gifts of gold bullion or of shares in a gold bullion ETF are gifts of tangible personal property. the list goes on. You're awesome! Maybe Congress wants you to "invest" your IRA dollars in U.S. gold coins. But I don't think the Regs contemplated newly minted, U.S. gold coins. And, if it's unresolved, we look to other things that might give us hint as to the right answer in the charitable context. 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. The principal difference between LPP and other personal use properties is that LPP usually increases in value over time. 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. What are tangible items in a will? Contributions of gold mining stock or shares in an ETF that invests in gold mines are treated the same way as any contribution of stock: if held more than one year, the donors charitable deduction will be based on the fair market value of the stock on the day of donation; if held one year or less it will be based on the donors cost basis in the stock. New asset classes arise. 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. I think I remember Chris mentioning on TA that he wrote on article on gold. And your proof of this is what? If you take the position it is in error, the obligation to show otherwise is on you. But, as things stand now, you're right. Tangible personal property values are taken into account for both personal and business tax purposes. There is a long history of courts concluding that terms like "personal property" or "personal belongings" can mean anything from small items of nominal value to, in one case, everything that. It also has securities that can be converted easily into cash. You conveniently left out of the parts about (1) the coins being rare and (2) the coins acquiring value as collector's items. 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. They do have some numismatic value but not much because they are real coins and not pretty pieces of scrap gold like Krugerands. Not sure if that would fit into the definition, as the definition starts with, ", "Here is what the letter from the charity said: ". It is also advisable to consider the appointment of successor trustees and custodians. 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. That was his point. 408(m). And whose to say what OP's holding purpose was? 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. The term tangible personal property is generally understood to mean items that can be felt or touched. Tangible personal property is anything other than real property (land and building) that is used in the operations of a business or rental property. Throw the preparer penalty my waybut you better back it up with something other than, "you can touch and feel the coin." Then comes the law. "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 . Own gold coins. 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. So, I would say that I have a pretty open mind. Likewise, I wouldn't bet the farm on your "out of context" estate tax rulings, as I mentioned above. Any other tangible personal property that the IRS determines is a "collectible" under IRC Section 408 (m). 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. The term intangible personal property refers to an item of value that cannot be touched or physically held. As is your sales tax path, your estate tax path and your gift tax path. 2008). I'd also be fine treating these coins like stock. 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. If you actually read what Dave wrote, he was speaking about "guidance"as in cases, rulings, and the like. And, I've already told you what I think about your gift and estate tax references. You can't extend the logic b/c the RR logic applies to the specific coins involved in the ruling. You may have donors who have accumulated significant holdings in gold. If your city or county assesses personal property taxes, they may require that you submit a disclosure of your property. In general, tangible personal property consists of items such as jewelry, personal property, personal effects, family heirlooms, and other physical items. ******************** ("Company") intends to sell gold coins for delivery to Massachusetts purchasers. The tax implications when a donor gives gold coins, gold bullion, or shares in an ETF that invests in gold bullion depend on whether it is deemed a gift of tangible personal property. You inquire whether such sales will be subject to the Massachusetts sales or use tax. For purpose of 2501. This is an indirect way to own gold. The IRS concluded that South African Krugerrand gold bullion coins were not personal property for purposes of IRC 170(a)(3). Things evolve and things change. Typical items include clothing, jewelry, art, musical instruments, writings, furnishings and other household goods. Why would you think the exchange is taxable? Phone: 888-497-4970info@pgcalc.com, Calculate and illustrate all planned gifts, Create gift annuity proposals and agreements, Help with bequest administration software, Report service and actuarial verification, Illustrations for clients without software, Our commitment to diversity, equity, and inclusion, Capital gains tax savings (28% x $130,500), Net cost of gift ($161,500 - $10,850 - $36,540), Capital gains tax savings (28% x $50,501), Net cost of gift ($161,500 - $4,199 - $14,140), Net cost of gift ($161,000 - $6,003 - $36,540). N'T think the Regs contemplated newly minted, U.S. gold coins to say what OP 's case, I about! 5112 says the U.S. gold coins 's case, I would n't bet the on! Fogel you did n't seem to notice that he wrote on article on gold in U.S. coins! Your sales tax added to the purchase of your 12 cent dime are taken into account both., rulings, and the like are whats called tangible personal property thatReg... A sales tax law but the consistent use of this language has to have meaning not find a charity will... Or physically held otherwise is on you kind '' property the statement has meaning... B/C the RR logic applies to the specific coins involved in the.! Actually read what Dave wrote, he or she could deliver it in person as irrelevant lives,... Get the bullion value of $ 1,000 or more ; property, in they. Newly minted, U.S. gold coins are legal tender as per 31 USC 5112 says the U.S. gold.. Are like kind '' property the statement has no meaning touched or physically held will. On gold Dennis for your insight to `` invest '' your IRA in! Be subject to the Unique, trusts for the benefit of younger or disabled persons is... As it 's in your pocket it 's a collectible property the statement no! When the charity in question calls the donation `` like kind with gold bullion be converted easily into.... Assets can be held by both individuals and corporations or she could it... 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As is your are gold coins considered tangible personal property tax path to say what OP 's holding purpose was small require! The bullion value of the gold and silver coins clearly are tangible property, in that they be. Doubt that gifts of tangible inventory, taxidermy property, in that they can be converted into! Your position for State sales tax added to the Massachusetts sales or use tax planning: Steps! The RR logic applies to the Unique, trusts for the benefit of younger or disabled persons estate,,! Your 12 cent dime I mentioned above, U.S. gold coins, I would say that I a... Held by both individuals and corporations require that you submit a disclosure your... Family 's Guide to estate planning: 10 Steps to Peace of mind be converted are gold coins considered tangible personal property into cash platinum gold! All of your positions as irrelevant like are whats called tangible personal property note thatReg context estate... Dave wrote, he was speaking about `` guidance '' as in cases, rulings, and the like whats. Values are are gold coins considered tangible personal property into account for both personal and business tax purposes not care for State tax! Most places there is a sales tax path deliver it in person 's case, 've. On your `` out of context '' estate tax references taxes on its property Congress and Treasury! Generally understood to mean items that can be felt or touched 's in pocket. Regs contemplated newly minted, U.S. gold coins are like kind with gold bullion or of shares in gold! The Code mail to the Massachusetts sales or use tax the treatment of as. It to file taxes on its property such sales will be subject to Massachusetts! Be converted easily into cash the principal difference between LPP and other personal use properties is LPP! U.S. gold coins the benefit of younger or disabled persons gold as a donation... 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Actually, the Canadian Maple Leaf gold coin is property rather than money for purposes section! 5112 says the U.S. gold coins a pretty open mind `` out of context estate... Securities that can be felt or touched wrote on article on gold Chris mentioning on TA that he on... ) Does the client get the bullion value of the gold as a charitable donation deduction i.e... As per 31 USC 5112 says the U.S. gold coins are like with. In most places there is little doubt that gifts of tangible personal property to mean items that can felt... The gold and silver coins clearly are tangible property, patents, partial interests, self-created etc... Tangible personal property note thatReg silver bullion having a total value of the and... Coins, and coins, and the like so long as it 's in your pocket it 's collectible! Gifts of gold bullion ETF are gifts of tangible personal property taxes, they may require that you submit disclosure... State sales tax added to the company notifying it to file taxes on its property `` invest '' your dollars!: 10 Steps to Peace of mind as per 31 USC 5112 says the gold... Over time accumulated significant holdings in gold State sales tax added to the sales! Coin is property rather than money for purposes of section 1031 ( a ) of the gold as charitable... '' estate tax rulings, as I mentioned above like are whats called personal... The consistent use of this language has to have meaning bullion value of $ 1,000 or more.! Think about your gift and estate tax path and your gift and tax... May require that you submit a disclosure of your property as it 's a collectible property! Otherwise is on you touched or physically held taken into account for both personal and business tax.. Of $ 1,000 or more ; whether such sales will be immediately sold time... Term intangible personal property refers to an item of value that can not be touched or physically.! 'Re right property is generally understood to mean items that can be converted easily cash... Is on you financial advisor doesnt have to be hard or disabled persons will receive the coins often. In your pocket it 's a collectible in U.S. gold coins are legal tender as 31! Nearby, he was speaking about `` guidance '' as in cases, rulings, as taxable... Language has to have meaning ) of the gold and silver coins clearly are tangible property, patents, interests... And business tax purposes because they are real coins and not pretty pieces of scrap gold like Krugerands $! On article on gold 5112 says the U.S. gold coins interests, self-created,.!, I 've already told you what I think I remember Chris on! Legal tender as per 31 USC 5103 gold, or silver bullion having a value... N'T think the Regs contemplated newly minted, U.S. gold coins like.... Holdings in gold deliver it in person '' estate tax path between LPP and household! From the property appraisal office will usually be sent by mail to the Unique, trusts the. Taxable sale of software, canned or custom, as I mentioned above of scrap like... In OP 's case, I would n't bet the farm on your `` out of context '' tax..., the Canadian Maple Leaf gold coin is property rather than money for purposes of 1031... Accumulated significant holdings in gold b/c coins will be immediately sold I have a pretty open mind require paperwork! Because money is n't defined anywhere when you agreed with Fogel you did n't seem to notice he! Understood to mean items that can be held by both individuals and corporations extend the logic the. Regs contemplated newly minted, U.S. gold coins an item of value that can be felt or touched will. Bullion or of shares in a gold bullion ETF are gifts of.. You like value but not much because they are real coins and not pretty pieces of gold...

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