On June 30, Harrison Ford, the famed actor who played Indiana Jones, will put on his famous hat for the last time. Fans all over the world are looking forward to this last adventure, so let's go on our own journey to figure out the secrets of hard prize.
How Is Treasure Taxed?
Treasure often has an air of mystery and allure, just like the valuable items that Indiana Jones tried to protect. From ancient artifacts to lost gold, treasures fascinate us and, in some cases, make us wonder how they should be taxed. But how does wealth fit into the tax code?
Treasures are charged in different ways based on where they come from and how they were obtained. Let's look at two of the most popular kinds.
Archaeological Treasures
As Indiana Jones often encountered, treasures unearthed through archaeological excavations may be subject to specific rules and regulations. In the U.S., such treasures generally fall under the Archaeological Resources Protection Act and are considered cultural heritage. Strict laws protect artifacts and sites on state, federal, and Native American lands.
Under this act, items like the Ark of the Covenant are protected as cultural property once they have been found during official digs. Most of the time, the person who found historical items at an archaeological site does not keep ownership of them. Instead, they are given to the state or other government agency.
In The Last Crusade, for example, a young Indiana Jones finds the Cross of Coronado at a dig site in Utah. According to the Archaeological Resources Protection Act, it would belong to the U.S. government or local officials. Dr. Jones would not have to pay taxes on the item because he would no longer own it.
Archaeological treasures are protected by laws, and they are often thought of as cultural items of great value. Most of the time, the government or other approved groups own and care for these treasures, so they are not taxed.
Found Treasures
Finding a treasure while discovering a forgotten cave or a secret spot can be exciting—until you remember that you'll have to pay taxes on it. Treasures found in any form are usually treated as cash and taxed as such. The amount of tax that needs to be paid is based on how much the prize was worth when it was found.
Consider the California couple who, in 2013, found an amazing find on their property: 1,400 gold coins from the 1800s. In 2013, these unusual coins were worth nearly $10 million, which was a lot more than they were worth when they were first made.
People who find riches are required by the IRS to report the value of those treasures as taxable income. In the case of the California couple, they would have had to figure out what the coins were worth when they found them and include that amount on their yearly tax return. This means that they would have had to pay income taxes on the $10 million of wealth they found in 2013. Since the highest federal and California state income tax rates are 39.6% and 13.3%, respectively, the couple may have had to pay nearly $5 million in taxes.
Taxed and Treasured
Indiana Jones tried to save historical items, but taxes can be complicated when it comes to wealth. The tax handling can be very different for things like historical treasures found during official digs and things found by accident in forgotten parts of the world. When it comes to taxes on treasures, you need to be careful, just like Indiana Jones did when he was looking for old items.
