When it comes to planning your wealth, it's important to understand the definition of collectibles according to the Internal Revenue Service (IRS). Collectibles are defined as any rug or antique, any metal or gem (with limited exceptions), any stamp or coin (with limited exceptions), any alcoholic beverage, or any other tangible personal property determined by the IRS to be collectible under Section 408 (m) of the IRC. It's also important to consider non-tax consequences when dealing with collectibles. These items may have more sentimental value to family members than other types of property.
For example, an antique violin may have been played by a family member for many years, or precious gems may have been a special gift from a great-grandfather. Tax advisors should be sensitive to the emotional nature of getting rid of family items and address the arrangement of collectibles early on. When it comes to specific items that are considered collectibles, they include rugs and antiques, metals and gems (with certain exceptions), stamps and coins (with certain exceptions), and alcoholic beverages. Any other tangible personal property that is determined by the IRS to be collectible under Section 408 (m) of the IRC is also included in this definition.
It's important to remember that collectibles can have a significant impact on your wealth planning. Therefore, it's essential to understand the IRS definition of collectibles and consider all aspects when making decisions about these items.
