For those that claim the sale of sportscards on their return
gosteelers
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'From Heritage Auctions'
Many of our clients have recently inquired about whether their stock losses could be used to offset gains on collectibles. I wanted to provide you with information recently given to us by our CPAs because I think you may find it particularly relevant and valuable as this fiscal year ends.
Generally, losses taken in the stock market this year can indeed be offset by gains from the sale of collectible assets (including jewelry, coins and fine art). Please note that we are not in the business of giving tax advice and you should consult with your own tax advisor before taking any actions, but if you have collectibles, jewelry or art with a low or below-current-market cost basis and have owned them for at least 12 months prior to the sale date, you may be able to use your stock market losses to offset your tax gains on those sales, as follows:
Capital gains on collectibles owned for at least one year are federally taxed at 28%, and are allowed to be offset by stock losses, but you have to follow very specific netting procedures. The basic capital gain netting procedures provide that within a given tax grouping such as those subject to 28%, 25%, 15% tax rates, gains and losses are netted in order to arrive with a net gain or loss for the grouping. Then the following netting and ordering rules apply:
Short term capital losses are applied first to offset short term capital gains that would be taxed at ordinary income tax rates. Then any overall net short term loss is used to offset any net long term capital gains from the 28% group. Any remaining short term losses are then used to reduce gains for other tax groups.
Net long term losses in the 28% group (includes collectibles) is used first to reduce gain from the 25% group, then to reduce the 15% group. A net loss from the 15% group (generally long term stock losses) is used first to reduce net short term gain, then net gain from the 28% group, and then to reduce gain from the 25% group.
Net losses carried forward into future years may be applied to reduce future gains on the same basis.
Thus, by auctioning a portion of your collection or a family heirloom with low cost basis, you can take advantage of losses recognized on sales of stock to limit your tax exposure from any gains on those objects, while you free-up additional capital and hopefully make room for more collectibles.
And best of all, you may even be able to use stock losses that are normally subject to just 15% tax savings to offset collectibles gains that would normally be subject to 28% gains!
Many of our clients have recently inquired about whether their stock losses could be used to offset gains on collectibles. I wanted to provide you with information recently given to us by our CPAs because I think you may find it particularly relevant and valuable as this fiscal year ends.
Generally, losses taken in the stock market this year can indeed be offset by gains from the sale of collectible assets (including jewelry, coins and fine art). Please note that we are not in the business of giving tax advice and you should consult with your own tax advisor before taking any actions, but if you have collectibles, jewelry or art with a low or below-current-market cost basis and have owned them for at least 12 months prior to the sale date, you may be able to use your stock market losses to offset your tax gains on those sales, as follows:
Capital gains on collectibles owned for at least one year are federally taxed at 28%, and are allowed to be offset by stock losses, but you have to follow very specific netting procedures. The basic capital gain netting procedures provide that within a given tax grouping such as those subject to 28%, 25%, 15% tax rates, gains and losses are netted in order to arrive with a net gain or loss for the grouping. Then the following netting and ordering rules apply:
Short term capital losses are applied first to offset short term capital gains that would be taxed at ordinary income tax rates. Then any overall net short term loss is used to offset any net long term capital gains from the 28% group. Any remaining short term losses are then used to reduce gains for other tax groups.
Net long term losses in the 28% group (includes collectibles) is used first to reduce gain from the 25% group, then to reduce the 15% group. A net loss from the 15% group (generally long term stock losses) is used first to reduce net short term gain, then net gain from the 28% group, and then to reduce gain from the 25% group.
Net losses carried forward into future years may be applied to reduce future gains on the same basis.
Thus, by auctioning a portion of your collection or a family heirloom with low cost basis, you can take advantage of losses recognized on sales of stock to limit your tax exposure from any gains on those objects, while you free-up additional capital and hopefully make room for more collectibles.
And best of all, you may even be able to use stock losses that are normally subject to just 15% tax savings to offset collectibles gains that would normally be subject to 28% gains!
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<< <i>I need another beer after reading this post. >>
Think I might need one (at least) before I read it.
Dodgers collection scans | Brett Butler registry | 1978 Dodgers - straight 9s, homie
Steve
- Jed Clampett
You can deduct losses on stock against your capital gains.
If such losses exceed those gains, you can deduct up to $3,000 per-year of that loss against other income.
Any amount you cannot deduct because of this limitation can be deducted in later years, until the loss amount
is exhausted.
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The sundry charities are pitching folks with GAINS in 2008. Just like Heritage is conducting
a marketing program that targets folks with losses.
In some cases
An agressive strategy might be to donate a substantial collection to a non-profit organization.
The "appraised" FMV of such a collection could be substantially more than the auction realization.
Tax deductions thus rendered apply to adjusted gross income, NOT just capital gains.
Fair Market Value can be a fungible concept in the donation game.
Scroll About Half Way Down The White Area To Learn About FMV
With any donation over $5,000, you will need expert tax advice.
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General Info About Gifting Instead Of Selling........
Your gift of cash or property must meet certain criteria in order to be tax-deductible.
You must actually donate cash or property. A pledge or promise to donate is not deductible until you actually pay.
You must contribute to a qualified tax-exempt organization. Charities will let you know if they have received their 501(c)(3) tax-exempt status. Some organizations are not required to obtain 501(c)(3) status from the IRS. These include churches and other religious organizations.
You must be able to itemize. Giving to charity is a great tax planning strategy, but it only works for people who are eligible to itemize their deductions.
You must meet record keeping requirements. This includes saving canceled checks, acknowledgment letters from the charity, and appraisals for donated property.
Keeping Records of Your Charity
Taxpayers are required to keep excellent records of their charitable contributions. Under the Pension Protection Act of 2006, you must keep written records of all cash donations. Donations of $250 or more will not be allowed as a tax deduction unless you have supporting documentation. Your records must indicate the name of the charitable organization, the date of your contribution, and the amount your contribution. This new record keeping requirement took effect beginning with the 2007 tax year.
Non-Cash Contributions of Property
Contributions of property (other than cash) are subject to strict record keeping and substantiation rules. You must be able to substantiate the fair market value of the goods or property you donated, plus keep any written acknowledgments you receive from the charity.
Fair Market Value of Contributed Property
You must make an assessment of the fair market value of the property you contribute.
Non-Cash Contributions Totalling More Than $500
You must attach IRS Form 8283 if your total non-cash contributions exceeds $500.
Car Contributions: Must Have Written Acknowledgement
If you contribute a car, truck, boat, airplane, or other vehicle, and the vehicle is worth more than $500, you must received a written acknowledgement from the non-profit before you can claim a tax deduction.
Non-Cash Contributions over $5,000: Must Have Written Appraisal
If you contribute property worth more than $5,000, you must obtain a written appraisal of the property's fair market value.
Limits on the Charitable Contribution Deduction
Your charitable contribution tax deduction may be limited. There are limits specific to charitable contributions, and there are general limits on itemized deductions.
50%, 30%, and 20% Limits on Charitable Contributions
Generally, you can deduct cash contributions in full up to 50% of your adjusted gross income.
Generally, you can deduct property contributions in full up to 30% of your adjusted gross income.
Generally, you can deduct contributions of appreciated capital gains assets in full up to 20% of your adjusted gross income.
Charitable contributions in excess of these limits can be carried over to the following tax year. The excess contributions can be carried over for a maximum of five years.
Not Tax Deductible
Contributions are not tax deductible if given to any of the following:
Political parties, political campaigns, or political action committees.
Contributions given to individual people.
Fees or dues paid to professional associations.
Contributions to labor unions, chambers of commerce, or business associations.
Contributions to for-profit schools and hospitals.
Contributions to foreign governments.
Fines or penalties paid to local or state governments.
The value of your time for services rendered to a non-profit.