Planning Briefs
Tax Rules For Collectible Donations
Published Tuesday, January 17, 2017 at: 7:00 AM EST
Do you collect art, jewelry, coins, or stamps? Or maybe your passion is action figures or sports memorabilia. Whatever the focus, your collection could be valuable—and donating all or part of it to a museum or another nonprofit organization could earn you a substantial tax deduction. If you play your cards right, you may be able to write off the full value of your donation immediately.
The basic rule is that you can deduct the fair market value (FMV) of a collectible item you give to charity if selling it would have produced a long-term capital gain. Therefore, if you've owned the property for more than one year, the amount you deduct can include the item's appreciation in value since you acquired it. And you never will be taxed on that gain.
On the other hand, for a collectible you've owned for a year or less, your deduction is limited to your "basis" in the property (usually, your initial cost). These are essentially the same rules that apply to donations of securities.
© 2024 Advisor Products Inc. All Rights Reserved.
More articles
- 5 'Other' Retirement Saving Ideas
- New Opportunity For Stand-Alone HRAs
- Online Survey Shows Split In Funding Home Down Payment
- IRS Applies IRA Rollover Limit To Coverdell ESAs
- Swap Munis To Your Tax Advantage
- This Type Of Trust Is A Failure
- What Are The Main Items On Trump's Tax Reform Agenda?
- Set Aside The Funds You Might Need For A Rainy Day
- Why Would You Take Your RMDs Sooner?
- Tax Rewards For Charitable Trusts
- Retiring Abroad? Be Ready To Take The Bad With The Good
- Tune Into The Tax Break For NUA
- Tax Rewards For Year-End Generosity
- Easier Rules On IRA Rollover Waivers
- What Would You Do For A Bigger Salary Or More Benefits?