tax consequences of coin collecting?

Here's a question I've always wanted to ask. Lets say that the family presiding over the estate is normal, that is to say that they are all quite amiable with one another. They decide to split the collection up equally, or even, allow one member of the family to have the collection because no one in interested in collecting coins. Who's the wiser? As long as there is no squabbling what's the difference? What if they were to all keep it to themselves and not let the lawyer in on it?

 

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There is a big difference between tax evasion (which of course is illegal) and tax avoidance (which is every American's right not to pay taxes you do not need to pay). We have already established that coin collecting is a horrible investment on CT, so most will likely lose money over time. I collect mostly for enjoyment so do not worry too much about the future of my collection. I also do not consider my coin collection an investment vehicle. With the help of a tax accountant (likely my sister), I will find a LEGAL way to give it to (or perhaps sell it to) my son prior to my demise (maybe when I retire). Kiss If that is not looking favorable then I will think of donating it to a non-profit organization or a tax-exempt entity. :hug: TC

 

That is the rub, it is illegal, depending on the value of the collection it is probably very low risk but still illegal and if they go to sell it there is no way to prove what there original cost was so the entire sale price would be deemed taxable profit. Ofcoarse that person would probably not report the sale only compounding the problem if they caught...

 

For one thing it is really irrelevant to hypothisize what the law states since there are many differences in different states as to estates.
For example I've contacted an attoney for my estate and have now a thing called a living trust. In this document, everything is just handed over to my Son as if I just handed it to him here and now. Everything in my safe deposit boxes are in my name, my Son's name and his wife's name as joint owners. If something happens to me, either one can just carry on the ownership of those boxes and the contents within. As to my home, cars, etc, same thing my Son wants to he could just move right in as if he lived here all his life. Mostly did after college anyway.
The main thing is anyone that collects coins, stamps, guns, etc should really sit down with an attorney in their area. No one individual here could possibly know all the rules, laws, regulations, etc. in all the different areas of this country.
If really in doubt, just send everything you own to me. I'll worry about all that law stuff for you. :goofer::smile

 

Thanks for pointing out the better side of being a loser.

 

If donated to a non-profit org, would this be the case? Or do they not have to pay any tax on the profit or at all?

 

Donations would not generate a profit or tax, and the taxpayer can usually get the fair market value as a tax deduction. I cannot stress enough though, if you have significant assets you should have your tax advisor recommend an estate planning attorney. There are plenty of ways to deal with these issues before they become a problem.

 

I am trying to deal with getting a will together right now. :hammer: My attorney wants $500 to make out a will. I was thinking of using LegalZoom, because I cannot afford the fee right now.
I have no heirs, so the estate can be divided among my designees, but the coin collection I want to go to two non-profit groups. Can the non-profit org choose to hold onto the collection instead of liquidating the coins?

How significant are significant assets? I don't know if I have them.

 

I would consider anything approaching $1,000,000 (this includes everything not just coins) significant for estate tax purposes depending on your state and what congress decides to due in the future. However, if you are concerned about what is going to happen to your assets after you pass then a will or a trust is absolutly necessary otherwise a court will decide what happens to your former stuff.

The non-profit can probably do whatever they want to with the coins, and you can probably even make your donation contingent upon them keeping them. I am just not sure why they would accept that, unless they could make money off of showing them or using them for education. I assume you have already had discussions with those organization you would donate to though.

 

As already noted in most states if you die, the State decides on what happens to your assets. And too in some States, most of the items of value can and have sort of wandered off into the Sunset. Large amounts are charged for thier services and taxes are faily heavy.
I strongly advise the attorney system regardless of costs. And remember to ask about that living trust item. Again, remember that all States have different laws so what is said on a coin forum about legal items is just approxiamate.

 

You can gift up to $10,000 annually to each child tax free.

 

This is true. I know people that have done it. I'm pretty sure you can gift to anybody or anything tax free up to that amount.

 

This number is adjusted for inflation from time to time, it is currently $13,000 per gift.

 

This is exactly why we need toedited - political commentary

 

I agree good point .... sold mine for cash at a loss

 

I dont know about edited - political commenatry

 

Unfortunately, the edited - political commentary

 

and if you're married both you and your spouse can each give $13,000 to each recipient each year... accordingly, you could give $26k as of 12/31/10, and then another $26k the next day on 1/1/2011 w/o the need for a gift tax return.

you can give alot more than that free of gift taxes (it just cuts into your estate tax exemption), but amounts in excess of the annual exclusion amount require the filing of a return.

 

There is a saying that if you think hiring an attorney is expensive, try not hiring an attorney!!!! meaning that you'll likely pay more in the long run by trying to do it yourself on the cheap.

Unless you know exactly what you're doing, doing it yourself through Legalzoom could potentially be worse than doing nothing and just letting your state law decide what happens with your estate.

Are you even sure you need just a will??? you may need a trust too?? you may need to explore gift planning??? you might need life insurance (maybe owned by a separate trust)??? you may have asset protection concerns that can be addressed via your estate plan???

it's not that easy, that's why you go to an expert and it usually isn't cheap to get it done correctly.