Quote:
Originally Posted by Fred
So, bottom line with the FMV at death - When (not IF) someone who has a large collection dies, then it's possible the cards can be sold at the current market value at the time of the collectors death without tax implications assuming the following is correct:
There is a federal threshold level at which an inheritance tax is not charged.
IF the total inheritance valuation (including the card collection at the FMV at time of death) is below the federal threshold, then no taxes would be due on the sale of the collection. However, if the collection is held for a year and the FMV increase by 10%, then the heirs would be liable to pay taxes on the 10% gain.
Is that correct?
I'm not a tax expert, so I'm just making assumptions and guessing here.
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Maybe said another way:
If your heirs sell at your death, then there should be no tax, because their basis was stepped up to FMV at your demise, and FMV should equal the sales price.
If your heirs wait to sell, then they may owe tax, depending on how much the collection has appreciated, if at all.