Meet with family to decide who gets ‘special’ items | NevadaAppeal.com

Meet with family to decide who gets ‘special’ items

John R. Bullis

First make a list of your collections of special items. It could be antique furniture, old guns, special china or silverware, dolls, sculptures, old cars, baseball cards, etc.

Then consider meeting with the family before you decide which items will go to which family members (or friends). Maybe a beneficiary will prefer receiving cash instead of a collectible item.

Then think about which person will be the best choice for particular items. Which one will pass on to the grandchildren and future generations?

Build a file of information on your collectibles that may include some photographs as well as the history of the item. If you have a favorite appraiser, indicate that contact information in the file. You might mention how to get insurance and how to maintain or even sell an item. If you can, include information on your cost (tax basis) in the item. That will be important to the beneficiary if they decide to sell it in the future.

Some items are quite valuable, but look like just an old table that might be sold in a garage sale for a small fraction of it’s real value. If you have a good idea of the current value, include that in the file.

Then, consider making gifts of some of those items. You can give up to $14,000 of gifts in a calendar year and not be required to file U.S. Gift Tax Return, form 709.

If the total gifts are more than $14,000 to an individual, the gift tax return should be filed, including an appraisal to show the current value. You will still not be required to pay the gift tax if your total “large” (taxable) gifts are less than $5,340,000. The taxable gift just reduces the amount you can leave at death without a death tax.

For example, suppose you give $114,000 total gifts in 2014 to an individual. The $14,000 Annual Gift Tax Exclusion would be claimed on form 709 and the taxable gift would be $100,000. The form would not require a check to IRS, but your death tax exclusion would be reduced to $5,240,000.

Giving items now will help be sure the valuable items will be preserved and treasured. We suggest you also do a letter with the gift. That could be a “love” letter where you write how much you love them, how proud of them you are, etc. Some folks will treasure that “love” letter as much as the item. We don’t normally write that kind of letter to our loved ones.

You might look at whether the total value of the individual items of a collection compares to the value of the entire collection. Maybe the collection is more valuable if it is kept intact (think of stamp collections for example).

Did you hear? “Don’t be afraid to take a big step if one is indicated. You can’t cross a chasm in two small jumps.” — David Lloyd George British Prim Minister (1863-1945).