Selling a card you inherited - Income tax

[swarmee]

AFAIK (not a lawyer or accountant)

If you inherited this year and sold this year, then the your cost basis would be equal (effectively) to your sale value, and you would not show a profit and therefore wouldn't owe tax.

If you inherited 10 years ago when a T206 Ty Cobb was $500 and sold it now for $10,000, you would owe tax on a profit of $9,500.

[trambo]

Should be no tax provided it's worth the same or less at the date of sale as it was on the date of transfer. If it's a $50k sale and it was transferred to the person at $45k, there would be tax on a $5k gain (not $5k in tax).

[Exhibitman]

THIS IS NOT LEGAL ADVICE; DO NOT RELY ON IT!!!!!

To prove valuation and the stepped-up basis, you may have to get an appraisal. If a decedent’s estate contains assets that have marked artistic or intrinsic value that totals more than $3,000, Regs. Sec. 20.2031-6(b) requires the appraisal of an expert, executed under oath, to be filed with the estate tax return. There is no requirement for a qualified appraisal (one that meets the requirements for certain charitable contributions). So you can get an experienced dealer or auctioneer to appraise the card and issue a FMV opinion. The IRS can contest it and you can slug it out in court with experts on each side (lawyers call this a "whore fight" BTW, because when you hire an expert they are inherently favorable to you or you do not let them testify). Now, if the estate closed without declaring the item on a return and you basically were handed it, there may be a problem that requires a lawyer and CPA to sort it out.