Monday, December 15, 2008

Tax Issues for Collectibles

Greg Rohan, president of Heritage Auction Galleries, in Dallas, is quoted in the Wall Street Journal as saying, "With collectibles like coins and stamps, the top tax bracket for long-term capital gains is 28% -- a higher rate than the 15% on long-term capital gains on securities."

According to Rohan, despite the different tax rates, you may be able to offset stock-market losses this year with gains from the sale of collectibles. But you have to be careful to order your losses and gains as specified by tax rules.

His advice: Seek help from a tax adviser to get it right.

As regards stamps specifically, Michael DuBasso, director of the nonprofit American Philatelic Foundation in Los Angeles is quoted as saying, "There are generally two categories of stamp collections: "youth-formed," or shoe-box, collections, which generally have little value, and leather-bound albums assembled by serious collectors, whose value depends on the rarity of the stamps."

He goes on to say, "If you have a shoebox collection, take it to a local dealer; 99.9% of the time they're going to say there's nothing here. In that case, give it to someone who's interested in stamp collecting."

However, Dubasso says if you are a collector with high-quality stamps worth $1,000 or more consider an in-depth appraisal which can help you figure out the best way to sell it.

You also may want to consider donating it. See IRS publications 526 on charitable contributions and 561 on valuing donated property, available at irs.gov.

To read the entire article, click here.
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posted by Don Schilling at 12:01 AM