accumulation or collection of coins
Dad left everything to mother including his hobby collection of coins- 2 yrs ago. several safe deposit boxes-not well organized:old gold coins to pennies; no graded, investment quality coins, but some valuable.
Does the irs treat the gains as taxable if she sells them piecemeal?? It is impossible to determine cost basis from the time he acquired them over a 50 yr. period.(or even their worth when he left the coins and everything else to her) This ''loose end '' bothers her. Any disposal/dispersal suggestions would be appreciated.
If she can't sell them without IRS problems, I believe she could gift up to $11,000 worth of coins to each kid or anybody else. Those values would be determined by the amounts obtained from the sale of the coins by the kid, or from evaluation by a a qualified person if the kid chose to keep those coins. Right?
It would be best for her to get the value of piecemeal sales, but that may involve tax issues. Or would it?? The coins existence is something she does not to wish to be made known in her town, which sure makes it all more difficut.
2 Answers from Attorneys
Re: accumulation or collection of coins
It is difficult to advise you with the small amount of information provided. However, when your father died, the value of property in his name at his death generally gets a "step up in basis." This means his estate has to account for the value of his assets, but later sale at about the appraised value of the coins would result in very small gains or losses. Since the coins are probably only a small portion of his estate, there remains a myriad of questions that need answering and perhaps your mother should consult a probate attorney to be sure title to all your dad's assets passes properly. Good luck!
Re: accumulation or collection of coins
When a person's assets transfer at his death to another person, the person inheriting them receives a "stepped-up basis" in the assets. This means that whatever the Fair Market Value of the coins were on the date of your father's death would be your mother's basis in the assets.
This assumes that your father and mother didn't own the coins jointly. If it was your father's collection, your mother would probably be able to sustain an argument (if the IRS ever asks) that she didn't have ownership of them prior to his death.
Since your mother didn't have the coins appraised on the date of your father's passing, she can support an estimated value as of that date by looking into coin registers (coin dealers will most likely have copies of 2 year old coin registers and they will be able to tell her more about the "real" value of the coins - the registers always list the dealers' price which is always higher than what an individual could sell the coin for), and as far as the gold coins, the price of gold on that date. Unless a gold coin is an extremely rare mintage, the price of gold is used to value the coin.
Lastly, your mother may gift up to $12,000 per person this year. The basis in the gift is the fair market value of the coins on the date of the gift.
Good luck to you, and if your mother needs assistance in preparing her return for these transactions, let me know.
Related Questions & Answers
-
Tax refund garnishment can the fma garnish my tax refund 100% Asked 2/21/07, 7:25 pm in United States Illinois Tax and Taxation Law
Looking for something else?
10,200 active attorneys ready to answer your legal questions today.
Featured Attorneys
Earn additional revenue and grow your business.
