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Posted by noble_farnsworth on May 3, 2007, 2:23 pm
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More than 15 years ago, I was given some old rare books by
someone who is now deceased. I've decided to sell the
books, and will probably net $8K-$10K, perhaps more. The
agent (a reputable firm) selling the books has made a point
of saying they do not report sales to the IRS.
What are the tax consequences? I have no paperwork
associated with the gift, and no idea what their value was
at the time I received them.
Are the net proceeds considered a long term capital gain? I
suppose I could not include it on my return, then if the IRS
discovers the sale I could play dumb, which in this instance
would not be far from the truth. I would like to know the
correct way to treat this, however.
Thanks in advance for comments.
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Posted by Bill on May 5, 2007, 6:17 am
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noble_farnsworth@yahoo.com posted:
> More than 15 years ago, I was given some old
> rare books by someone who is now deceased.
> I've decided to sell the books, and will
> probably net $8K-$10K, perhaps more. The
> agent (a reputable firm) selling the books has
> made a point of saying they do not report
> sales to the IRS.
> What are the tax consequences? I have no
> paperwork associated with the gift, and no
> idea what their value was at the time I
> received them.
Lucky you. And what a nice gift that was!
The purist answer would, of course, be that you might
consult the "reputable firm" for a professional opinion on
the value of such items at the time of the gift, and use
that for your cost basis when you report the proceeds on
Schedule D, as an "LT" gain.
> Are the net proceeds considered a long term
> capital gain? I suppose I could not include it
> on my return, then if the IRS discovers the
> sale I could play dumb, which in this instance
> would not be far from the truth. I would like to
> know the correct way to treat this, however.
I will watch the professional's responses to this with great
interest. One can take the philosophical position that a
gift is a gift ... and the disposal of personal property is
not normally a taxable event. There is not a _normal_
expectation that items in one's possession will at some time
become highly valued. However, that has certainly been the
case with many people who have "discovered" that the old
item in the attic, inherited from Aunt Susie, turns out to
be worth six figures or more -- when they take it to the
Antiques Road Show.
I don't have any idea -- in my own amateurish "semi-pro"
status -- of what on earth the practice is with those
situations.
So I'll join you in awaiting expert analysis. Meanwhile, I
want to thank you for posting a most _interesting_ question.
Bill
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<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
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Posted by Seth on May 7, 2007, 1:10 pm
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> I will watch the professional's responses to this with great
> interest. One can take the philosophical position that a
> gift is a gift ... and the disposal of personal property is
> not normally a taxable event.
It is a taxable event. However, a loss cannot be taken; and
personal property generally sells for less than cost.
Seth
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
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Posted by Bill on May 8, 2007, 12:52 am
Please log in for more thread options sethb@panix.com (Seth) posted:
>> I will watch the professional's responses to
>> this with great interest. One can take the
>> philosophical position that a gift is a gift ...
>> and the disposal of personal property is not
>> normally a taxable event.
> It is a taxable event. However, a loss cannot
> be taken; and personal property generally
> sells for less than cost.
Thanks, Seth, for that helpful clarification. The
distinction is important, and I appreciate it.
Bill
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ------------------------------------------------------- >>
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Posted by Paul Thomas, CPA on May 5, 2007, 6:36 am
Please log in for more thread options > More than 15 years ago, I was given some old rare books by
> someone who is now deceased. I've decided to sell the
> books, and will probably net $8K-$10K, perhaps more. The
> agent (a reputable firm) selling the books has made a point
> of saying they do not report sales to the IRS.
>
> What are the tax consequences? I have no paperwork
> associated with the gift, and no idea what their value was
> at the time I received them.
Gifts carry the cost basis if the person who gave them to
you, so their value when given to you is not at issue.
> Are the net proceeds considered a long term capital gain?
Yes. But these are collectibles, which get taxed at no more
than 28%, not teh 15% attached to long-term gains of a stock
perhaps.
> I suppose I could not include it on my return, then if the IRS
> discovers the sale I could play dumb, which in this instance
> would not be far from the truth. I would like to know the
> correct way to treat this, however.
Schedule D.
Do you have any clue as to how the books were acquired by
the person who gave them to you?
If he purchased them, what did they retail for back then?
It'd be tough to prove one way or the other, but if you have
something, it's a starting point that's better than nothing.
--
Paul A. Thomas, CPA
Athens, Georgia
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ------------------------------------------------------- >>
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