Whose tax relief plan are you for?

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Posted By: Bob Casmer

I haven't seen the actual wording of Mastro's ad about the potential tax advantages of selling your appreciated collectibles through them but, they're definitely off base. From a tax standpoint, if your portfolio is way down because of the current market you have "realized" losses from your capital asset holdings. If you sell those stocks and other capital assets below your cost or other basis, you now have "recognized" losses from their sale. To be deductible on your tax return capital items must be sold and the losses must actually be "realized". Even then, if the losses result from the sale of capital items held more than one year, resulting in long term capital losses (LTCL), you can only deduct them to the extent you also have capital gains, including gains from the sale of collectibles. If your total LTCLs exceed your total capital gains, the government lets you deduct up to $3,000 of those excess LTCLs against all your other income on your tax return each year. Anything over that gets carried over to future years. So even if you do have "recognized" capital losses this year. You can wait till future years to sell your collectibles, when realized prices may be better, and still be able to offset any of those those carryover LTCLs dollar for dollar against your collectibles gains. What Mastro is making it sound like is that you have to sell your collectibles this year to take advantage of any losses you may have already recognized.