Tax Expert Question

[raulus]

First question:

With respect to the cards sold, are you:

1) an investor
2) a hobbyist or personal collector
3) a dealer

How you respond will affect how the gains (and losses) are treated.

[raulus]

And if you just want an answer about whether collectibles gains qualify for the 0% tax rate, the answer is they don't.

"Capital Gains Tax on Collectibles
But while long-term capital gains on most types of assets are taxed at either 15% or 20% (or 0% for taxpayers in the 10% or 15% ordinary-income tax bracket), capital gains on collectibles are taxed at 28% (or your ordinary-income rate, if lower)."

https://www.hallkistler.com/hk-news/...-collectibles/

If you want to become a codehead, I encourage you to dig into IRC Section 1(h), and 1(h)(4) in particular (collectibles 28% rate), contrasted with 1(h)(1), which is the general capital gains treatment.

The crux of the matter is that collectibles are subject to their own tax rate, and don't qualify for the general capital gains tax rate.

[insidethewrapper]

A personal collector, not a dealer or investor. Just collect for the fun of it. I noticed that coin collections, art etc can be treated as long term capital gains, why not sports collectibles ?

[raulus]

Originally Posted by insidethewrapper

A personal collector, not a dealer or investor. Just collect for the fun of it. I noticed that coin collections, art etc can be treated as long term capital gains, why not sports collectibles ?

If you believe the IRS, then coins and art are also subject to the same 28% rate.

https://www.irs.gov/taxtopics/tc409

[Peter_Spaeth]

Originally Posted by raulus

And if you just want an answer about whether collectibles gains qualify for the 0% tax rate, the answer is they don't.

"Capital Gains Tax on Collectibles
But while long-term capital gains on most types of assets are taxed at either 15% or 20% (or 0% for taxpayers in the 10% or 15% ordinary-income tax bracket), capital gains on collectibles are taxed at 28% (or your ordinary-income rate, if lower)."

https://www.hallkistler.com/hk-news/...-collectibles/

If you want to become a codehead, I encourage you to dig into IRC Section 1(h), and 1(h)(4) in particular (collectibles 28% rate), contrasted with 1(h)(1), which is the general capital gains treatment.

The crux of the matter is that collectibles are subject to their own tax rate, and don't qualify for the general capital gains tax rate.

The IRS and Congress didn't get the memo that cards are now "assets."