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Coin inheritance taxable?

 
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Canada
870 Posts
 Posted 01/15/2018  11:56 pm  Show Profile   Bookmark this reply Add purelywasted to your friends list Get a Link to this Reply

Quote:

Quote:
Quote:
also note he said he was gifted these, so there was no sale, no money passing hands, therefore no tax either.



Exactly, you hit the nail on the head. No one besides you seem to grasp this simple concept.


and you would both be making a good point, except


Quote:
If one inherits a large coin collection and it is sold


the OP is asking what happens if you sell it after inheriting the collection. Depending on value of coins/sets and number of buyers, taxes can be very relevant, which is what everyone is trying to elaborate on.
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 Posted 01/16/2018  12:19 am  Show Profile   Bookmark this reply Add CC-Ottawa to your friends list Get a Link to this Reply

Quote:


Quote:
also note he said he was gifted these, so there was no sale, no money passing hands, therefore no tax either.

Exactly, you hit the nail on the head. No one besides you seem to grasp this simple concept.


Virtually everyone that commented previously said the same thing, though some added information related to any subsequent or potential sale by the OP.


Quote:
If he gave them to you before he passed then I would say they were a gift and not an inheritance.



Quote:
I believe there are no tax consequences from the gift on your side.



Quote:
As others have pointed out, you described an inter-vivos gift not an inheritance.


That said, CRA would likely consider that there was a deemed sale at FMV when the gift was made and any capital gain earned between that date and the date of any subsequent sale could attract a tax obligation depending on the unique details of the OP's situation.

Edited by CC-Ottawa
01/16/2018 12:30 am
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Canada
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 Posted 01/16/2018  12:22 am  Show Profile   Check Wade's eBay Listings Bookmark this reply Add Wade to your friends list Get a Link to this Reply

Quote:
Best thing to do is call CRA and ask them.


Best thing to do is get paid in cash and keep quiet.

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United States
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 Posted 01/16/2018  12:33 am  Show Profile   Bookmark this reply Add Illegaltender to your friends list Get a Link to this Reply
It wouldn't really bother me to not pay taxes on something like that, and i'd consider you pretty safe if you're worried about getting caught.
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 Posted 01/16/2018  11:05 am  Show Profile   Check SPP-Ottawa's eBay Listings Bookmark this reply Add SPP-Ottawa to your friends list Get a Link to this Reply

Quote:
Best thing to do is get paid in cash and keep quiet.


Soooo... several members of the Ottawa Numismatic Society work for CRA, and also lurk in this forum...

I get it. We all get it. Nobody likes taxes. But maybe you should not offer that advice so openly...
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 Posted 01/16/2018  12:10 pm  Show Profile   Bookmark this reply Add Hounddog Bill to your friends list Get a Link to this Reply
There is no inheritance tax in Canada.

Cheers, Bill
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 Posted 01/16/2018  6:00 pm  Show Profile   Bookmark this reply Add MoneyPenney to your friends list Get a Link to this Reply

Quote:
the OP is asking what happens if you sell it after inheriting the collection. Depending on value of coins/sets and number of buyers, taxes can be very relevant, which is what everyone is trying to elaborate on.


From Tax Tips.ca:


Quote:
Are Gifts or Inheritances Taxable?

There is no "gift tax" in Canada. Any resident of Canada who receives a gift or inheritance of any amount from almost any source (except from an employer) will not have to include this in their income. However, if capital property (real estate, other than a principal residence, or investments) is given as a gift, the person who has given the gift will be deemed to have sold the capital property at fair market value, and will have to pay tax on any resulting capital gain. The fair market value is deemed to be the "cost" to the person to whom the shares were given. If money or capital property is given or loaned to a spouse or a related minor child, attribution rules will apply.


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 Posted 01/16/2018  9:03 pm  Show Profile   Bookmark this reply Add purelywasted to your friends list Get a Link to this Reply
Am I misreading this

Step 1: OP - Inherits the collection of coins
Step 2: OP - Decides to sell the collection of coins

Therefore,

Step 1: $0 taxes owed due (no inheritance tax in canada)
Step 2: Taxes may be owed depending on value/type/nature of transaction/.

Just because you inherited something, does not necessarily mean you can then sell the asset tax free at a later date, you might be responsible for the gain in value from the time you acquire the asset to the time you sell it.

My understanding is that a potential taxable situation occurs when you sell the asset, as coins are considered Listed Personal Property (LPP) by Revenue Canada. How the OP acquired the assets is irrelevant, the only thing that is relevant from the time of acquisition is the value of the asset. Which is what will determine if you are going to recognize a gain/loss on the LPP.

For example, assume the assets had a value of $5000 at time of inheritance, OP does not owe any taxes. OP then goes to sell the assets, if the sale price is greater than the original value, the OP might have a taxable situation (depends on nature of transaction(s)). If the sale is for less than $5000, the OP might have a loss they can use against other LPP income.

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 Posted 01/16/2018  9:13 pm  Show Profile   Bookmark this reply Add Coinfrog to your friends list Get a Link to this Reply
Step 3: Sell the stuff, keep your mouth shut, and move on.
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 Posted 01/16/2018  9:46 pm  Show Profile   Bookmark this reply Add Smallcentguy to your friends list Get a Link to this Reply
Chances are the coins are worth no more now than at the time they were gifted. So probably no tax should be paid by the current owner as there is probably no gain, although he should properly go through the exercise of trying to find out if there was a gain or not.

The former owner might have had a gain or a loss at the time of the gift, but that taxable event was 10 years ago and the individual is dead. So CRA is quite unlikely to pursue it. Regardless the current owner has no need to report it or worry about whether that event was correctly reported or not.
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 Posted 01/17/2018  06:43 am  Show Profile   Bookmark this reply Add okiecoiner to your friends list Get a Link to this Reply
I don't think that revenue Canada gives a hoot about inherited coins. To prove what they were worth, you'd have to look in some kind of coin guide. Guides are usually list prices 100% or more than what you can actually sell a coin for. If you use an auction or eBay, then you have to subtract another 20-30% off what it sold for and that you are able to put in your pocket.
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 Posted 01/17/2018  08:56 am  Show Profile   Bookmark this reply Add john100 to your friends list Get a Link to this Reply
Best example, let's say you took a flyer on 1000 Amazon stock 10 years ago, and today it's worth a small fortune, there are probate rules that apply or else everyone would just gift their estates away with no taxes. Trudeau did grant family trusts for the super wealthy many years ago to avoid this tax, but that's another story. The OP collection could include key dates, like 21 5 cents or 50 cents pieces which are hard to sell without records, call a good accountant for up to date advice on this situation.
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 Posted 01/17/2018  12:04 pm  Show Profile   Bookmark this reply Add doubleeagle59 to your friends list Get a Link to this Reply
You can debate both sides of this case, but all I know for sure, is if you are audited, the CRA will tell YOU if it is taxable or not and my guess is, they will judge it to be taxable in some way or another.

CRA = guilty until proven innocent.
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 Posted 01/17/2018  3:31 pm  Show Profile   Bookmark this reply Add wildflowerAB to your friends list Get a Link to this Reply
To the OP, my opinion, it depends if you reference to your "large" collection in terms of value or by quantity.

The information on the link below might be helpful. Private coin collections, when one doesn't make it a business of buying and selling coin, are considered Listed Personal Property.
http://blog.taxresource.ca/is-there...al-property/
"When a gain is realized form the sale of personal use property the Income Tax Act provides that the proceeds of the sale are deemed to be the greater of $1,000 or the amount of the actual proceeds. Similarly the adjusted cost base is deemed to be the greater of $1,000 and the actual proceeds of disposition. These rules effectively ensure that larger gains are taxes and small transactions are excluded from taxation..."

My understanding is if a coin from a private collection is sold for greater than $1000, only then are the proceeds taxable as capable gains (at 50% of the profit less $1000 adjusted cost base).

But you'd want to seek professional advise from a tax specialist.

While I've never sold any of my collection my situation might be similar to the OPs. The collection given to me from my father was quite large in quantity, not individual value. My personal but unprofessional opinion based on that, given my research and a discussion with an accountant a few years back, this is an example when disposing of a typical private collection. 100 various circulated coins are sold for between $5 to $10 dollars each. I file my tax return and the adjusted cost base listing each one totals 100 x $1000 or $100,000.00. My sale proceeds were $700, but I declare a gain of $100,000 which equals zero. Knowing that, do I really want waste time to list the details of 100 coins, since if I'm ever audited my $700 sale proceeds are not taxable? Probably not but because what's the point, it just seems silly. (The only reason I might is if I had Capital Gains in future or preceding years, then I'd certainly seek out a tax specialist)

Again, this is only my opinion but CRA implications for the majority of private collections, are nothing to sweat over.

Adding another reference:
http://www.taxplanningguide.ca/tax-...al-property/
Edited by wildflowerAB
01/17/2018 4:09 pm
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 Posted 01/17/2018  4:08 pm  Show Profile   Check SPP-Ottawa's eBay Listings Bookmark this reply Add SPP-Ottawa to your friends list Get a Link to this Reply

Quote:
I don't think that revenue Canada gives a hoot about inherited coins.


They would, if they were bitcoins!!
"Research is what I am doing, when I don't know what I am doing" --Wernher von Braun

Content of this post is licensed under a Creative Commons Attribution-NonCommercial 3.0 Unported License. See: http://creativecommons.org/licenses...0/deed.en_US

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