Quote:
Originally Posted by Exhibitman
I'm tempted to sell some of my cards too, Peter, but when I factor in the cost of sale and the taxes that temptation fades away. Between 10%-20% of market to the auctioneer, 28% of the profit (and a sale of a highly appreciated asset would be nearly all profit) to the IRS if a capital gain or my marginal Federal tax rate if via a business, and my marginal tax rate to the state, a $50K profit becomes a $25K-$30K profit. Nice, but annoying. Hold until after I retire, and the picture changes. Hold until I die and my kid gets a stepped-up to FMV basis and she can sell it and pay nothing in taxes.
If I want to buy one again, the picture is even worse. I need a 50% drop in value to get back in at no extra cost. How often has that been the case over the last 40 years? Now, i guess I could invest the profit but making up a 50% hit like that is a very ambitious plan.
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Can you or others explain the FMV basis? Or direct me to a website?
I though the act of inheriting someone was tax free, but if you sell it down the road, you would have to pay taxes on that sale?