Discussion:Found gold coins in primary residence
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| So that week I went down to Radio Shack and bought a metal detector. I was so excited when I was scanning over some interior walls and the thing beeped and lit up and the needle jumped. So I pried off the boards from the wall, certain to find the lost Broly treasure. | So that week I went down to Radio Shack and bought a metal detector. I was so excited when I was scanning over some interior walls and the thing beeped and lit up and the needle jumped. So I pried off the boards from the wall, certain to find the lost Broly treasure. | ||
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| To my dismay, all I found was some foil lined insulation. I would have to continue to do taxes if I expected to pay my bills that month.}} | To my dismay, all I found was some foil lined insulation. I would have to continue to do taxes if I expected to pay my bills that month.}} | ||
| - | {{ForumReplyPost|UserID=PVCC-CCIFP|Date=2009-11-07|Text=[http://www.pocketchangelottery.com/article200.htm]This article (written in 1997) suggests that at the time the numismatic value of even common year Saint-Gaudens was in the 2-2.5 times value of the gold range, and that phase III Coronet Double Eagles, depending on their condition were selling for 1.5 times gold value. I don't know how these ratio's have held up as the price of gold has skyrocketed. }} | + | {{ForumReplyPost|UserID=PVCC-CCIFP|Date=2009-11-07|Text=[http://www.pocketchangelottery.com/article200.htm]This article (written in 1997) suggests that at the time the numismatic value of even common year Saint-Gaudens was in the 2-2.5 times value of the gold range, and that phase III Coronet Double Eagles, depending on their condition were selling for 1.5 times gold value. I don't know how these ratios have held up as the price of gold has skyrocketed. }} |
Revision as of 17:37, 7 November 2009
Discussion Forum Index --> Basic Tax Questions --> Found gold coins in primary residence
Discussion Forum Index --> Tax Questions --> Found gold coins in primary residence
Wjalverson (talk|edits) said: | 6 November 2009 |
| A client found approximately 600 US gold coins dated from the early 1900s. Each coin is currently worth, by weight, approximately $250. The coins were hidden behind a cabinet in the client's primary residence that was purchased 6 years ago. The coins were uncovered during a kitchen remodeling. Under Reg 1.61-14 my client is required to include this treasure trove in her gross income.
My questions: a) Is it reasonable to allocate a portion of the basis of the residence to the coins? If yes, how would it be calculated? b) Are 100% of the value of the coins recognized currently, or only recognized when sold? c) If the answer to b) is recognized currently, could the face value ($20) of each coin be used as the value since the current value based upon weight would not be recognized until sold? I've done a bit of research herein and through Checkpoint, but I'm unable to come up with more definitive answers. Thank you | |
| 6 November 2009 | |
| Does your client now have "undisputed possession"? What if seller now remembers he stuck 600 "cold coins" (sic)behind the kitchen sink cupboard and knocks on your door asking if he can look behind the cupboard for the pocket change he hid there for a rainy day. Does he have a valid claim? Does your state have an "unclaimed property" statute that could result in your client having an obligation to turn the coins over to the state? (Bummer, client was complaining about paying 1/3rd of her finding to the government, when she might have to turn it all over!)
Absent that, I will wait to see if you can find support to allocated a portion of the purchase price of the house to the coins. Can you hold a straight face while you make that argument to the IRS? | |
| 6 November 2009 | |
| (a) If your client didn't know that the coins were hidden in the residence at the time of purchase, then I don’t see how you could allocate any of the basis of the residence to the coins. The purchase price was for the residence, not for the coins and the residence.
(b) Assuming that your client has "undisputed possession" of the coins, they are income when found. See Cesarini v. United States, 428 F.2d 812 (6th Cir. 1970) (currency found in piano is income when found). (c) The income is the FMV of the coins, not their face value. See Rev. Rul. 53-61, 1953-1 C.B. 17 (“The finder of a ‘treasure-trove’ is in receipt of taxable income, to the extent of its value in U.S. currency, for the taxable year in which it is reduced to undisputed possession.”) [emphasis added] | |
Wjalverson (talk|edits) said: | 6 November 2009 |
| For the sake of my questions let us assume undisputed possession. The items in question were uncovered on property in undisputed possession of my client, therefore, the coins are as well. Anyway, the coins where hidden close to 100 years ago and the house has changed hands several times since then. I do not think any court would question my client's undisputed possession. | |
| 6 November 2009 | |
| He needs to stake his claim. Otherwise, his home is open season to prospectors for any other coins he might find.
Stake around the outside perimeter of the house*, post your claim, and start tearing the plaster down. It's probably time to go with some of the Chinese sheetrock any way. It's good luck. .*Come to think of it, I'd go ahead and stake around the property lines. It would be fascinating to see who the past owners were. Could be outlaws or family of outlaws. Also, don't forget the numismatic value of the coins could far exceed the bullion value. So, don't let him get taken. Also, warning, buy the book (learn) BEFORE you talk to a dealer/appraiser. Have some idea of what you own. Get them looked at by a reputable dealer after he's been educated himself. Finally, have your client checked out on the QT. It could be he's robbed a stage, coin shop, or a Brinks truck, and he's trying to launder the coins. Find out what he's been doing, and go down to the post office and look at the pictures. Check Interpol. You definitely want a statement in the file from the contractor. If you can pin something on him, you might be able to jump his claim, and get a reward. | |
| 6 November 2009 | |
| What do you bet the coins were hoarded in 1932 when the government ordered all gold coins to be turned in? | |
| 6 November 2009 | |
| Could very well be NMex. I sure would like to know when they were put there.
What state is this in? I would like to look at the title to that house. You know, the old bank robbers would hole up with their relatives out West there. If this man is not tearing the house apart, and having his kids dig up the back yard, I'd naturally be suspicious. Get a Red Book, and take a good look at those coins to see what they are. Don't flood the market, auction them off a few at a time if you sell them. He might try to find a dog that sniffs out gold, saves on the plaster. | |
| 6 November 2009 | |
| Wjalverson is from Missouri ... it's Jesse James. The real one ... not the phony guy that builds motorcycles. | |
| 6 November 2009 | |
| I think the Barrows and Dillinger worked that area too. Remember, the banks still kept coin back in those days. This man could have a historial claim, and turn this into a TV special to boot. I don't think it would be Ma Barker, they finally cornered her in Florida, with her boys.
This was back before the Federales finally monetized us by seizing the gold. That confounded Roosevelt, and to think, he was a Dutchman. | |
| 6 November 2009 | |
| True, but you can't go by just that. A one ounce coin may not contain one ounce of pure gold. Then again, not all coins are stuck to one ounce. Then again, a coin's collectible value may far exceed it's bullion value. | |
| 7 November 2009 | |
| collectible value of the coins may be multiples of the gold content value | |
| 7 November 2009 | |
| Since I can't say it correctly out loud, I'll take the opportunity to type it: numismatic value. | |
PVCC-CCIFP (talk|edits) said: | 2009-11-07 |
| wjalverson: If your coin's date from the period 1900-1907 they are most likely Coronet Double Eagles, which according to this link[1] weigh 33.463 grams or approximately 1.17 oz, if they are from 1907 to later, they are Saint-Gaudens Double Eagles which according to this link [2] weigh the same as the Coronet. Both are composed of 10% copper and 90% gold. Given the above information, from where did you get your valuation. If by some chance your client has 1907 high relief Saint-Gaudens-Double-Eagles look out nelly, because they are among the most collectible US coins period. The sites to which I linked list some of the specific highly collectible years of issue. As Blrgcpa pointed out, gold in the last few days reached an all time high, so establishing when exactly the treasure trove was uncovered would be important to accurately protecting your client from excess income. | |
| 7 November 2009 | |
| From now on, when you buy a house, make sure you add this line to the Items purchased at the end of the contract: window treatments, scrubs (shubbery), and all gold hid in the walls, along with whatever mineral rights and erl that can be found about the hereditaments and real property (including rings, necklaces, tiaras, crowns and scepters, orbs of state, and valuable objets d' art).
This way, you are protected against the treasure trove tom foolery. | |
| 7 November 2009 | |
| Crow, when I first began my practice 21 years ago, I rented this old 1870 house in Cherokee county that everyone considered 'haunted' (The Broly house on Hwy 205). Then as clients began to come in, many would tell me the stories about the 2 Broly sisters who lived there (the family graveyard is across Bells Ferry in a subdivision now), who used to be the money lenders. The house was built after the time of the famed Georgia gold rush in Dahlonaga, but near enough to the mountains to make it plausable that there was gold in the area. The stories continued that the sisters hid their money in the house, and eveyone asked whether I had found any.
So that week I went down to Radio Shack and bought a metal detector. I was so excited when I was scanning over some interior walls and the thing beeped and lit up and the needle jumped. So I pried off the boards from the wall, certain to find the lost Broly treasure. To my dismay, all I found was some foil lined insulation. I would have to continue to do taxes if I expected to pay my bills that month. | |
PVCC-CCIFP (talk|edits) said: | 2009-11-07 |
| [3]This article (written in 1997) suggests that at the time the numismatic value of even common year Saint-Gaudens was in the 2-2.5 times value of the gold range, and that phase III Coronet Double Eagles, depending on their condition were selling for 1.5 times gold value. I don't know how these ratios have held up as the price of gold has skyrocketed. | |
