I met with my new accountant today…my old one of almost 20 years retired. Mike is likely mid/late 30’s if I were to guess.
The topic of taxes for the sale of collectibles, art, etc came up…I guess I brought it up. And it certainly seems to me that there are a lot of gray areas in tax “law?”
I brought up the concept of “collector” vs “investor” as a way to possible get a break on losses terming myself an investor. We discusses length of ownership…rationale for the initial purchase.
Mike gave me an example of a guy with a muscle car purchased new for 3-4K in 1970 or so. The car was purchased as a car…as transportation…not as an investment. It just turned out the car turned out to be aq helluva investment…recently sold for 80K…NO TAXES WERE PAID.
A family heirloom…handed down generation to generation…never intended to be sold…but eventually sold I’d assume NO TAXES WERE PAID as when someone inherits something the value on the day of the inheritance is the cost basis?
An older gentleman who bought packs of bb cards in the 40’s-50’s…like
Ted Z!!!!! A time when these cards had no value and could not possibly have been purchased as an “investment”…just a fun hobby that turned out to be a good investment. This to me is one of the grey areas? Are these taxable?
For sure the Plank card that Ted bought in later years would be taxable as at this point in time this card had significant value?
I hope Ted doesn’t mind me using his name here!!!!!
Or someone like me…been collecting cards since the mid 70’s. We did not consult price guides after opening packs to see how much money we had made…or lost. But this did start happening in the following 10 years.
Someone like me will be paying taxes on all of my card sales because in my lifetime…bb cards have had value…therefore whether I am/was/is a collector vs investor…I’m paying!!!!! It’s the differentiation between collector vs investor which still irks me. It seems the IRS is judging me based on assumptions?
So nothing revolutionary…I thought the car story was interesting.
Turns out Mike is a collector too…still has his childhood collection…is a big jersey collector.
I like Mike!
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