Discussion:Sale of Gifted Gold Jewellery
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Discussion Forum Index --> Advanced Tax Questions --> Sale of Gifted Gold Jewellery
Discussion Forum Index --> Tax Questions --> Sale of Gifted Gold Jewellery
Krishsvasan (talk|edits) said: | 1 July 2009 |
| Hi, I wanted to find out the tax consequences on the sale of gifted gold jewellery. The jewellery was gifted to my client from her mother who in turn got it from her parents.
The cost of the jewellery is hence not available as the gift happened several years ago. I do understand that there will be capital gains on the sale of personal property but how do we compute the cost in this case. The parents and grandparents who gifted the jewellery do not reside in the US and are not subject to US taxation. The client is a US citizen who files US taxes every year though she is temporarily residing out of the country. Are there any other tax consequences besides paying the capital gains on the sale? | |
RoyDaleOne (talk|edits) said: | 1 July 2009 |
| See Form 3520 instructions. | |
| 5 August 2009 | |
| Determining the basis of the property sold is not necessarily a simple matter. The general principle is that the basis of property received as a gift is the lesser of the giver's basis or fair market value on the date of the gift.
In the case you describe, if there were 2 gifts preceding the sale you're concerned with, the gain on that sale is determined by the basis of the original giver. However, if any party acquired the property by inheritance (often the property owners aren't that specific or even clear) the basis is the fair market value on the date of death of the decedent. -- Larry Hess, CPA ~ Albuquerque, NM | |
| 5 August 2009 | |
| Jewellery (jewelery) is the former a gift by Borat in Kasistan? | |
RoyDaleOne (talk|edits) said: | 6 August 2009 |
| GIFTS IN EXCESS OF $10,000 PER YEAR.
Persons (other than charities) that receive foreign gifts during the tax year totaling more than $10,000 aince 1996 must provide information to the IRS. IRC Sec. 6039F. If the donee fails to provide the proper information, the IRS may determine the tax consequences of the transfer, subject to judicial review under the "arbitrary and capricious" standard (which provides a high degree of deference to the determination), and may impose a penalty of 5% of the gift amount for each month the information is not furnished. The penalty cannot exceed 25% of the gift amount. There is a good cause exception to these penalties. The reporting is on Form 3520, so check the Form that was filed. Exceptions to this comment noted. Some places say $100,000 some places $10,000 as the filing requirement. | |
| 7 August 2009 | |
| You don't indicate how much jewelry is involved here. It is probably not worth nearly what your client probably thinks it is which is good news from a tax perspective. Ordinar used jewelry--estate jewelry in the trade--has very little value beyond its value as scrap metal. The value an appraiser would give it for insurance purposes and what you could sell it for on eBay are so different you would think they came from different planets. Weigh the stuff and check what gold prices were on the appropriate dates and add a bit of a premium to that. | |
| 7 August 2009 | |
| unless it was Jackie O's gold jewelry. Huge premium to the scap metal value. | |
