Rev. Rul. 58-197

The Internal Revenue Service has been asked whether the sale of a decedent's jewelry collection by an executor of the estate is subject to the retailers excise tax.

A valuable jewelry collection is included in a decedent's estate. The decedent was never engaged in the business of buying and selling jewelry but acquired this jewelry collection for her personal use. The executor, who is not engaged in the business of selling jewelry, sold this collection in liquidating the estate.

Section 4001 of the Interal Revenue Code of 1954 imposes a tax upon the price for which jewelry and related items are sold at retail.

It is held that, under the circumstances described above, since neither the decedent nor the executor was engaged in the business of selling jewelry at retail, the sale of the jewelry collection for the purpose of liquidating the estate is in the nature of a private sale and, therefore, is not subject to the tax imposed by section 4001 of the Code. However, under the provisions of section 4002 of the Code, if the jewelry collection had been sold by an auctioner or other agent in the course of his business on behalf of the executor of the decedent's estate, the sale would be a sale at retail and, therefore, would be subject to the tax.