Giving the Collection Away
Read this chapter if you want to consider giving your stamps to a friend, a relative, other stamp collectors or a charity. In some cases, you can get significant tax breaks by donating a collection to a charity. If you are in a high tax bracket, be sure to read this chapter.
Here are some options you have:
1. Give the collection to the person you know wants it. Most collections pass to the children along with everything else in the estate. One of the children may want to continue the collection. Fine, that’s an excellent option. (Don’t fight over it, either!).
2. Give some things to a friend of the collector. Tom and Harry may have been stamp collecting friends for years. Tom’s collection (along with everything else) went to the kids. Harry might really like to have the collection or some items that he’d had his eye on for years. While you probably should not give away material that has significant value, you might want to give Harry some material anyway.
3. Give some things to a stamp club. Stamp clubs are usually quite happy to get any kind of philatelic material. They will spend many happy hours sorting through boxes. Stamp clubs frequently sponsor youth clubs to get younger people involved with the hobby. Again, you probably do not want to give away items of significant value.
4. Give some things to a school. Many teachers use stamps as teaching tools. They are always in search of stamps and stamp supplies. Linn’s Stamp News also has frequent columns called “Donations Sought.”
5. Give modern (1950 and after) MNH stamps for Christmas presents. Everyone sends mail! If you have lots of sheets, coils and booklets of USA MNH, they make great presents. It conserves your cash and gets rid of some of your excess stamps. Be nice to the recipient, however. If the current first-class-letter rate is 44 cents, try to give them combinations of stamps that equal 44 cents. Many people will not appreciate having to paste multiple stamps on an envelope. (However, if you paste the stamps on business-size envelopes for them, they’ll likely be happy to use them!
6. Give some or all of the collection to a registered charity. There are many seeking donations in Linn’s. Here are a couple of long established groups:
Stamps for the Wounded
P.O. Box 1125
Falls Church VA 22041-0125
Stamps for the Wounded seeks stamps for use by collectors in veterans
hospitals. It encourages stamp collecting as a means of providing goals and
Leon Myers Stamp Center
129 S. 144th St.
P.O. Box 1
Boys Town NE 68010
Boys Town provides homes for homeless and abused children. They also provide support to troubled individuals calling in on their nationwide toll-free hotline. Boys Town has a collection and gets its kids involved in the hobby. It also sells philatelic material at stamp shows to raise money for its activities.
Both organizations will send additional information if you write. I am sure a #10 SASE would be appreciated.
If you do not want a tax deduction, just pack the stuff up and mail it off. Include a note that you are not planning on taking a tax deduction. However, you should also tell them if you would or would not like an acknowledgment.
A charity will be happy to receive any kind of philatelic material or numismatic material. They will be particularly interested in receiving mounted collections (both U.S. and foreign) and U.S. mint stamps in sheets, booklets, coils and blocks. They may not actively seek bulk type material such as boxes of common stamps or sheets of CTOs; however, they will take them if you send them!
Fair Market Value
When determining the value of material you are donating to charity, the IRS requires you to determine fair market value (FMV). FMV is the price you might expect to pay to purchase the same material from a dealer. It can be established or estimated by using a recognized catalog such as Scott. Other sources might include auction realizations and formal appraisals.
If you have stamps in an album that are in reasonably good condition, you can probably claim that FMV is equal to full SCV. SCV is what a dealer would normally charge. You should make some sort of a list of the stamps you have. You can make a list of the Scott numbers and show the appropriate price depending on whether your stamp is mint or used. You might also photocopy the catalog pages and circle the prices of the stamps you have.
Note that claiming full SCV is dependent on identifying the stamps. If you have a box of unidentified, common, used, loose stamps, you need to realize that their FMV is probably around 1/4 to 1/2 cent each. This is because a dealer frequently sells packets of common stamps for these prices.
Stamps with a SCV of 21 cents or more are fairly safe. (An exception is discussed in the next paragraph.) Fair market value would be the Scott price. The danger is in stamps with a SCV of 20 cents or less since this is an artificial price. (Scott lists 20 cents as the minimum price a dealer would charge for any stamp -- even the most common one.) The IRS will probably not like your claiming a $2,000 deduction for a box of 10,000 common, used stamps.
One exception to the above paragraph may be common MNH USA stamps. A 25 cent stamp from a few years ago may have a SCV of 50 cents. The IRS will definitely not object to a 25 cent deduction. They may object to a 50 cent deduction especially if you have a large number of these stamps.
Remember: if your donation is a very large one, you would do well to consult a tax advisor. Since you are probably dealing with inheritance taxes already, the person who is assisting you with these can also help with a tax deduction for a donation of philatelic material.