I graduated Law Schoo as a Tax Attorney (but I dont work as one) and spent a little while working for the IRS so I have a little insight into this. Steve is right about the "Stepped Up Basis". If your grandfather paid $1 for a 1933 Goudey Baseball card and he sells it the day before he dies for $1000, he has taxable income of $999. If he dies and you inherit it and the Fair Market Value (stepped up basis) is $1000 and then you sell it for $1000, your taxable income on the transaction is Zero. It is like you paid what the fair market value is.
How you handle the income part is tricky and professionals will disagree. There are several different options all of which are completely legal and this is where you need to consult a CPA.
If you are selling inherited Sports Collectibles and they are not worth huge amounts of money, you are going to owe very little in taxes if anything is the basic answer.
Rhys Yeakley
Non-Bar-Certified Tax Attorney
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