How to Gift or Sell Your Collection

It's All Trew: Calling it quits? When disposing of a collection, take care to protect your investment.


| May 2007



Investments.jpg

For many collectors, there comes a time when a collection must be laid to rest in one form or another. If you suddenly find yourself with the need to dispose of a collection, be patient; don't get in a hurry. And don't allow anyone to force you into a quick sale. Collections sold in haste or "lump lot" are usually discounted from 25 to 75 percent. Do not give away or sell any part of the collection unless all interested parties agree in writing. Keep a log of everything you do during the process.

If a detailed inventory and evaluation total don't exist, make one immediately. You must know what you have and what it is worth. If a collector who is familiar with market values is not available to help, consult a local auctioneer. Do not allow anyone access to the collection unless you are present. The mysterious disappearance of one or two choice items could reduce the collection's value by 50 percent or more. Trust everyone, but tempt no one!

Determine beyond doubt whether you'll be responsible for taxes, fees, liens or probate requirements that must be paid or met before disposing of the collection. Keep good records. Documentation may prove helpful should you later have to explain your actions to the IRS or a probate judge.

Once you've compiled a detailed inventory complete with values, and resolved all questions pertaining to legal and tax requirements, there are several ways to dispose of a collection. As a rule of thumb, the less work you do in the process, the less you will make. For example, advertising can generate much higher prices, but that process requires an investment of time and money.

Making a Gift

You may decide to give your collection to a close friend or family member. Be sure the gift is agreeable to all parties and well documented. Decisions made during periods of emotional stress or grief may be cause for regret later, particularly by younger members of your family.

Museum Donations

Donating a collection to a museum can perpetuate the life and value of a collection as it is protected, preserved and displayed. However, be aware that museums are not obligated to keep or display donated items permanently. Make sure the entity you deal with is a 501c, tax exempt, non-profit group and ask to see official documentation. Gifts to a legal nonprofit entity can produce a tax deduction in the amount of the total collection's value. Usually any valuation less than $1,500 is accepted. This tax deduction may qualify as an asset in estate settlement. Be sure the tax identification number, name and address of the receiving entity is on the deduction form.