Many collectibles are more sought after, and more valuable, than ever. But that value has tax consequences when collectibles are sold at a profit, donated to charity or transferred to the next generation.
The IRS views most collectibles as capital assets. As a result, any gain on the sale of a collectible that you’ve had for more than one year generally is treated as a long-term capital gain.
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).
Read this article to learn more about the tax impact of collectibles.