Collecting can be an enjoyable hobby, but it also can be financially lucrative if you buy and sell collectibles in the marketplace.
Are you a collector of trading cards, rare coins or antique toys? Some collectibles, such as fine wines and classic cars, typically appreciate over time. Collectors frequently realized thousands or even millions in gains from selling their prized possessions.
Collectibles are considered alternative investments by the IRS and include things like art, stamps & coins, cards & comics, rare items, antiques, and so on. If collectibles are sold at a gain, by a high-income individual, the gains will be subject to a long-term capital gains tax rate of 28%, if disposed of after more than one year of ownership. In addition, taxpayers may be subject to the 3.8% net investment income tax and state taxes.
The Challenge: How to maximize you net return on the sale of a collectible/hobby with all the benefits of an installment sale and the security of cash.
The Solution: The Pass Capital Gain Deferral Solution will let you defer the capital gains on the sale of a collectible. You may defer all a portion of the capital gains on your capital gains.