You skipped the table of contents section. Tangible property is property which occupies physical space. Is his deduction still only 10 cents? 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. And when I say, "well, you're dealing with two completely different sets of coins," you wonder why I can't extend the logic of the RR to the OP's situation. 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. I think we can do so with a great many things. It is obvious that the IRS has had some trouble with it too. The law also (in all cited cases) makes a clear distinction between currency value and market value. Still, its nice to see the ludicrous nature off my example woke you up. Planning for Tangible Personal Property from the Mundane to the Unique, trusts for the benefit of younger or disabled persons. Personal property taxes may apply. These coins are minted by the Republic of South Africa, and each coin contains exactly one ounce of gold. Please limit your input to 500 characters. Does this still hold true and if so: Or is the donation treated like publicly traded securities? An official website of the Commonwealth of Massachusetts, This page, Letter Ruling 83-28: Gold Coins, is. Thanks in advance for your help! (5) "Tangible personal property" means personal property that can be seen, weighed, measured, felt, or otherwise perceived by the senses, but does not include a document or other perceptible object that constitutes evidence of a valuable interest, claim, or right and has . According to the IRS, tangible personal property is any sort of property that can be touched or moved. However, certain types require special attention because of laws regulating their ownership, registration, and possession: Firearms Alcohol Ivory, furs, and other artifacts made from endangered species her pearls go to her favorite niece, Alice. A safe deposit box is not an item of tangible personal property, but the box could include items 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). But if you would like it to be, its an interesting position by the IRS, because it flies in the face of your notion that if you can see it and touch it, and if it's subject to sales tax, gift tax and estate tax, it MUST be tangible personaltyregardless of holding purpose. In fact, 43 states use an appraised TPP value when calculating state taxes on personal property, business . 42-5061. 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. Examples Ckenefick and Dennis, watching you debate over this is certainly entertaining, but I dont think its been very helpful to the OP. Some states only apply a tax on tangible property in the year the property was purchased. Because (1) they're more like stock held for long term appreciation than they are like a painting [i.e. Most business owners will need to disclose the property they hold such as machinery, inventory, office furniture and more as well as the year it was purchased. 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. Livestock & Horses Arrangements need to be made for the proper care and management of these animals to take effect immediately upon death. Sounds like you should ask the charity to clarify exactly how the gift should be properly reported on a tax return. People can hold this type of property and they can also see it. 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. It's really a muddled thing with legal tender gold coins: there's cost, face value and real value. Of course, Dennis fails to recognize and acknowledge that this RR pre-dates America's re-entry into the gold coin minting. If we treat as regular personalty, we have the related use problem. Tangible personal property is a tax term describing personal property that can be physically relocated, such as furniture and office equipment. If you need assistance, please contact the Massachusetts Department of Revenue. All personal property located in residence. Some small boats require modest paperwork to transfer ownership. Typical items include clothing, jewelry, art, musical instruments, writings, furnishings and other household goods. You want your 12 cent dime to be money, put it in an account and add 10 cents to your balance. (Allowed only when the bullion is sold. Then come the Regs. 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. 1.6662-4(d)(3)(iii). The bullion value at the time of the donation is 40K and the charitable organization immediately sells the coins (unrelated use for the charity) . Is a coin collection considered to be cash or personal property (state if MA, if that makes a difference) Ask an Expert Ask a Lawyer Estate Law DISCLAIMER: Answers from Experts on JustAnswer are not substitutes for the advice of an attorney. 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. So long as it's in your pocket it's a collectible. And the term is used in different ways in the numismatist world. 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. 22 E-books are also taxable. No exemption is available for distribution made in accordance with a Will or a Trust. 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. Thank you everyone for all the input. Tangible personal property is a broad category of items, covering everything from valuable family heirlooms to the contents of your junk drawer. The OP's coins aren't treated as "collectibles" per 408(m), making one (except you) wonder, if they're treated as money. 1)Does the client get the bullion value of the gold as a charitable donation deduction (i.e. Preparing a Will enables you to direct how and to whom your estate will be distributed once youre gone. This includes property that can be touched, moved or consumed and excludes real or intangible property. A tractor manufactured in 1950 out to be treated the same way as a 2005 tractor donated to charity in 2013. You persist in missing my point. This one certainly didn't. For purpose of 2001. Sure would be nice, by the way,if you could find some kind of opinion supporting the logic of the PLR. Therefore, pursuant to the rationale of Rev. Moreover, in the case at hand, the trustee is authorized to dispose of the coins. If your collection is really valuable, you might want to transfer it to a living trust, to avoid a probate proceeding upon your deathbut thats prettyunusual andonly appropriate if the value of those tangibleitems are high, such as with a Steinway piano, or vauable jewelery. The amount directed into trust should be reasonable and a court may assume jurisdiction over the trust and reduce the amount if considered to be unreasonable. Definitions. Implication being, maybe these coins are treated as money. Be sure to discuss identify items of significant value or which require special handling or valuation with your estate planning lawyer. And note, the RR *didn't* say, "the coins can be felt and touched, so they are tangible personalty property.". ? An unreferenced PLR that was withdrawn and not published isnt any help. To boot, I can deduct the FMV. Of course, they've never defined "circulation." The feedback will only be used for improving the website. Period." c 64I, 2). 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. And, I'm also smart enough to know that OP's client has a pretty good case to make some waves with this issue. Now, if we take Ck's route for charitable purposes and treat it as (1) money worth 15 cents or (2) property, but not tangible personal property, worth 15 cents with a basis of 12 cents [i.e. It goes over the subject but does not get into the nitty gritty, leaving one to wonder. Rev. f. Manufactured or mobile homes purchased in or delivered from another . So then, your donation of a dime worth 15 cents (that you've held for over 1-year), since tangible personalty, will only produce a 10 cent tax deduction if the charity immediately sells the dime and doesn't put it to related use. 28 Thus, for example, a taxpayer donating American Eagle gold coins to a public . 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. You're awesome! Client donates American Eagle gold coins. Throw the preparer penalty my waybut you better back it up with something other than, "you can touch and feel the coin." 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. Although you have to report any gain on the sale of personal-use property . Even though an ETF share is just paper (or more likely just bytes), it represents ownership of the metal itself and thats enough to make it a collectible for tax purposes. For purpose of 2501. Tangible personal property includes equipment, supplies, and any other property (including information technology systems) other than that is defined as an intangible property. 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. As such, applying a strict "personal property" label to something like a gold coin might not be appropriate. We have a basis of 12 cents and a value of 15 cents. They do have some numismatic value but not much because they are real coins and not pretty pieces of scrap gold like Krugerands. And, I've already told you what I think about your gift and estate tax references. Even though an ETF share is just paper (or more likely just bytes), it represents ownership of the metal itself and that's enough to make it a collectible for tax purposes. Chris's problem is that apparently he wrote some kind of article and somehow managed not to hear the laughter. Contact Us: 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. 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. The article involved realization only and took no position on anything. 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. Exactly how the gift should be properly reported on a tax return cent dime to be treated same. The ludicrous nature off my example woke you up the numismatist world, or... 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