One of the most common questions that we receive is whether the coins should be valued for purposes of the donation - at the market price that would be paid for the coins if they were purchased by a dealer who is buying for resale; .Q - if the coins should be valued at the price that would be paid for them by a collector who was buying for his own collection,
I am an Attorney-at-Law and I have looked into this question. A while ago, the United States Court of Appeals considered the question of a man who had donated a collection of books to a charitable organization. The court studied this problem in detail and saId
“*** We hold that where a deductible charitable contribution is made in property other than money, the allowable deduction is the fair market value computed on the r an ultimate consumer wou1d and that what might be paid by a dealer buying to resell is a proper consideration.” ( v. Tax Commissioner 1967, United States Court of Appeals for the 6th Circuit, 3 F.2d 476, 6 USTC 9126, emphasis added.)
The same rule has been followed by the United States Tax Court. (See Richard Bamsde] v. Commissioner 1976, T.C. Mem, Dec. l976-1O
The above court decision indicates that a taxpayer is entitled to deduct on his federal income tax return the price the coins would have had if they had been sold to a consumer (a collector) by a dealer,
As we all know, the retail prices charged for coins are very high at this time. Thus, a person who donates such coins to The Numismatic Institute may be entitled to substantial tax deductions.
General information about charitable deductions can be found in many pamphlets issued by the federal tax department and by many private companies. For technical reasons, for most collectors, the coins should be owned for at least one year before making the donation to The Institute.