Q for Tax Experts: Donating Coins to Museums...

MrEureka · March 5, 2008 12:23PM

Please tell us what you can about the tax benefits and rules for donating coins to museums like the ANA, ANS and Smithsonian.

bidask · March 5, 2008 1:29PM

<< Please tell us what you can about the tax benefits and rules for donating coins to museums like the ANA, ANS and Smithsonian. >>

I believe there are definitely tax benefits for donating coins to tax exempt organizations. The tricky part is valuing the donation. A good person to talk with on this subject is Steve Roach at Heritage.

droopyd · March 5, 2008 2:01PM

There's an ongoing scandal here in LA concerning people receiving inflated appraisals for tax donation purposes of artwork to museums.

This tax deduction is still available and can be aggressively pursued. However, this past year, only 7 returns claiming deduction of artwork were audited out of thousands filed -- expect tighter scrutiny of this deduction in the future.

COALPORTER · March 5, 2008 2:09PM

I'm NOT an expert, but you might want to study
the "art in public places" rule. I think you can buy
art and put it on public display and take some type
of "right-off" without really donating it- you still are
the owner.

BECOKA · March 5, 2008 4:11PM

You are probably OK if you print out a current gray sheet or alternate price guide of the time of donation. Keep this with your tax documents incase you get audited.

astrorat · March 5, 2008 9:11PM

For donating coins to the ANA, contact Robin Sisler (Collection Manager; sisler@money.org) before sending coins to ensure that they are needed. The ANA often receives "surprise" donations of, well...um...junk, that actually costs the Association more in processing that the coins/tokens/metals/paper notes are worth and they are not needed for the collection. Dealers often use the ANA as their dumping ground for junk. I mean...how many bags of "rare" wheat cents or half-filled Whitman folders can the ANA swallow?

Alternatively, consider donating the more "commmon" stuff to the ANA Education Department so it can be used to support educational programming and YN activities. Still, contact Jane Colvard (Educational Programming Manager; colvard@money.org) in advance to discuss you donation.

IRS regulations require that donations in excess of $500 (I am fairy sure that is the amount) have an independent written appraisal. I am not sure if a pricing guide can be used due to the issue of grading. The ANA or any other recipient cannot provide the appraisal due to IRS regulations. They will simply acknowledge your donation but not validate the dollar amount. That issue is between you and the IRS. All this fun is due to the...let's use the term "optimistic" valuation placed on donations by some of our more "popular" numismatists who have donated "highly valuable" items to the ANA (and I am sure it happens all over the museum world).

Lane

BillJones · March 5, 2008 10:09PM

The general rules for donations are you are allowed to deduct the market value of the asset donated from your income tax, regardless of what you paid for it. This is one of the few, perhaps the only area of the tax code where you might be able to deduct more than your cost basis (actual amount) from your adjusted gross income. BUT if the value of the asset has dropped to below what you paid, you can only deduct that. You can’t deduct the higher number.

The tricks are (1) you have to have an appraisal that the IRS will accept, and (2) the institution must accept (sign off on) the item at the stated value.

This is presented as only a starting point to ask questions of a professional tax account or attorney. I studied this stuff in college, but I’m only a layman.

UtahCoin · March 5, 2008 10:16PM

Just for information, and I'll bet if he were audited, he'd be in trouble.....

A local attorney (obviously not a very smart one) bought about $25,000 worth of junk coins off the TV shows (yes, Chambers & co). This included gold and platinum plated Statehood Quarters. He started to wise up about his "investments" and brought it to me. I appraised it at about $12,000 RETAIL. He then decided to donate it to the local Boy Scout Council and deducted an amount equal to his purchase price.....

Don't know if this would fly with the IRS, but he did it.

BillJones · March 5, 2008 10:25PM

DO NOT TRUST THE OPINIONS OF "LOCAL ATTORNIES" WHEN IT COMES TO TAX ISSUES!!!!

My father and my family learned that lesson the hard way. It has cost us more than $180,000 in extra taxes that we would have have had to have paid because of the advice of a Bozo attorney who did not know what he was talking about.

Longacre · March 5, 2008 10:29PM

<< DO NOT TRUST THE OPINIONS OF "LOCAL ATTORNIES" WHEN IT COMES TO TAX ISSUES!!!!

My father and my family learned that lesson the hard way. It has cost us more than $180,000 in extra taxes that we would have have had to have paid because of the advice of a Bozo attorney who did not know what he was talking about. >>

A good tax lawyer is worth his weight in gold (coins).

BillJones · March 5, 2008 10:30PM

My father's theory was that the best lawyer was the cheapest lawyer. He and my family paid for that opinion in spades and hard earned money.

Longacre · March 5, 2008 10:35PM

<< My father's theory was that the best lawyer was the cheapest lawyer. He and my family paid for that opinion in spades and hard earned money. >>

Let's see-- I weigh 163 lbs. and gold is around $950/oz..... I will take that fee as my retainer.

UtahCoin · March 5, 2008 10:38PM

<< 

<< My father's theory was that the best lawyer was the cheapest lawyer. He and my family paid for that opinion in spades and hard earned money. >>

Let's see-- I weigh 163 lbs. and gold is around $950/oz..... I will take that fee as my retainer.

>>

My calculator doesn't have that many digits....

oreville · March 5, 2008 10:46PM

Go to IRS form 8283 and read the instructions. They are helpful.

Go to IRS website www.irs.gov.

Generally CPA's are better in filling out the actual tax forms than tax attorneys but tax attorneys can research the tax laws as well as CPA's.

Plus tax attorneys have more time than CPA's to fully answer the questions before April 15th.

Q for Tax Experts: Donating Coins to Museums...

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