Quote:
Originally Posted by Baseball Rarities
I am not an accountant, but this is not how it has been explained to me. AFAIK, the sale of baseball cards falls under "collectibles" which are all taxed as short term capital gains (ordinary income) - 28% -, no matter the holding period.
Please verify all of this with your CPA.
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As a tax person I can tell you for certain that the short-term gains are taxed at the same marginal rate as your other ordinary income--wages, rental, interest, etc. That type of income caps out at 39.6%, the max for anyone. This is the same treatment as for capital gains from non-collectibles.
Long-term gains on collectibles are also taxed at the same marginal rate as ordinary income
except that the rate is capped at 28%. If you're single, and your only income for the year is a net of $60,000 from selling cards held long-term, then the first $9325 of taxable income is taxed at 10%, the next $28625 is taxed at 15%, and anything over that is at 25%.
If your net income from cards were $260,000, then the amount at 25% would be $54950. The rest would be at 28%, even though the 28% bracket for ordinary income ends at $191650.