Scottsdale BJ auction

[William F.]

Saw a tv program previewing upcoming Scottsdale Barrett Jackson auction. Had an interview with our own Roy Sinor describing the 3 Corvettes, including the red '67 L88 he's running through the auction . Guess there's a time to sell everything (except your dog and maybe wife)??? Thoughts?

[Michael J.]

Re: Scottsdale BJ auction

Did he talk about any of the '63 Z06 tankers?

[Kenneth B.]

Re: Scottsdale BJ auction

Saw a tv program previewing upcoming Scottsdale Barrett Jackson auction. Had an interview with our own Roy Sinor describing the 3 Corvettes, including the red '67 L88 he's running through the auction . Guess there's a time to sell everything (except your dog and maybe wife)??? Thoughts?

You are right Bill. A lot of us are going to have to make that decision in the coming years. If they end up in a estate God knows what they will bring. My kids/grandkids know nothing about Corvettes money wise. When is the time to empty the car toy box don't know. I always said everything is for sale at the right money except the wife & kids & sometimes maybe even the wife. LOL

[William F.]

Re: Scottsdale BJ auction

Michael, don't remember about a tanker-'67 L88 and LT1 and another shark, I think. What's story on the tankers in question?
Ken, don't sell a good dog.
This web ste is still messed up-spells like itwants toa ou ca e and oesther funny tings.

[Duke W.]

Re: Scottsdale BJ auction

The trouble with selling a collector car during your lifetime is the capital gains tax you may have to pay - 28 percent federal plus state tax, if applicable. In California all capital gains are subject to tax at ordinary income rates, which could be up to 13.9 percent. The federal rate is for "collectibles", which would include a vintage car. The 15 percent federal rate on long term gains only applies to financial assets and real property.

Then there's the issue of determining the actual gain, which is the sale price minus the basis. The basis is what you have in the car. If you bought the car a long time ago and then put a lot of money into restoring it, I hope you kept all the receipts, but even then, it could be an accounting nightmare.

If you let your estate handle it, the car benefits from a stepped up basis, which is the value on the date of death or six months later.

So, I think it's best to hang on and make sure your executor (or successor trustee in the case of a living trust, which I highly recommend to avoid probate court and lawyer fees) understands how to go about selling the car assuming none of your heirs are interested in retaining it.

A friend of a friend recently sold a '66 Ferrari 330GTC that he has owned for a long time for several hundred thousand dollars. I don't know how he's going to handle the tax situation and don't plan on asking.

I wonder if the big auction houses are required to report sales to the IRS like your stock or mutual fund house is required to do whenever you sell an asset. Then, if you don't account for it on Schedule D you'll definitely be hearing from the IRS.

Duke

[Michael J.]

Re: Scottsdale BJ auction

Michael, don't remember about a tanker-'67 L88 and LT1 and another shark, I think. What's story on the tankers in question?

Not sure there is a story, but these Z06 tankers have become the new L88s it seems. Astronomical prices, and you always wonder if they are real or not. There are two up on Mecum Kissimmee, just wondering if BJ has any too.

[Roy S.]

[Dick W.]

Re: Scottsdale BJ auction

The trouble with selling a collector car during your lifetime is the capital gains tax you may have to pay - 28 percent federal plus state tax, if applicable. In California all capital gains are subject to tax at ordinary income rates, which could be up to 13.9 percent. The federal rate is for "collectibles", which would include a vintage car. The 15 percent federal rate on long term gains only applies to financial assets and real property.

Then there's the issue of determining the actual gain, which is the sale price minus the basis. The basis is what you have in the car. If you bought the car a long time ago and then put a lot of money into restoring it, I hope you kept all the receipts, but even then, it could be an accounting nightmare.

If you let your estate handle it, the car benefits from a stepped up basis, which is the value on the date of death or six months later.

So, I think it's best to hang on and make sure your executor (or successor trustee in the case of a living trust, which I highly recommend to avoid probate court and lawyer fees) understands how to go about selling the car assuming none of your heirs are interested in retaining it.

A friend of a friend recently sold a '66 Ferrari 330GTC that he has owned for a long time for several hundred thousand dollars. I don't know how he's going to handle the tax situation and don't plan on asking.

I wonder if the big auction houses are required to report sales to the IRS like your stock or mutual fund house is required to do whenever you sell an asset. Then, if you don't account for it on Schedule D you'll definitely be hearing from the IRS.

Duke

Duke, IRS did require1099's to be issue in certain instances, some auctionhouses took this to be required on all sales over $5,000.00 some left the reporting up to the seller. I believe this requirement went away a year or so ago. If one thinks that IRS has a deaf ear when it comes to these very visible auctions, they are badly fooled. You might get away with making a few unreported dollars on a $20,000 sales, but when you start getting into the high five figure and up cars you are getting into a very risky arena if you do not report capital gains. The key to managing your liability is to fully document your cost basis. I am not a tax advisor, not attempting to give tax advice, and did not stay at a Holiday Inn last night. Always seek professional tax advice. It has amazed me as to what you can include in your cost basis.

Like Roy, I have considered my self lucky to have to pay these taxes

[Michael J.]

Re: Scottsdale BJ auction

Wishing each and everyone of you a Safe, Healthy, Happy, Very Merry Christmas and Prosperous New Year

for those offended by that statement please accept my apology and -I Wish each of you a Happy Holiday

Roy Sinor and Family

+1, and to you as well Roy! Cheers!

[Duke W.]

Re: Scottsdale BJ auction

Duke, IRS did require1099's to be issue in certain instances, some auctionhouses took this to be required on all sales over $5,000.00 some left the reporting up to the seller. I believe this requirement went away a year or so ago. If one thinks that IRS has a deaf ear when it comes to these very visible auctions, they are badly fooled. You might get away with making a few unreported dollars on a $20,000 sales, but when you start getting into the high five figure and up cars you are getting into a very risky arena if you do not report capital gains. The key to managing your liability is to fully document your cost basis. I am not a tax advisor, not attempting to give tax advice, and did not stay at a Holiday Inn last night. Always seek professional tax advice. It has amazed me as to what you can include in your cost basis.

Like Roy, I have considered my self lucky to have to pay these taxes

I have to admit: I HATE paying taxes, but there are plenty of legal ways around them. The charitable deduction works great. It can be used to lower your marginal tax bracket and can also protect modest capital gains to the point where the federal tax rate is zero, and I'm not talking about a direct contribution of appreciated assets.

I've never sold anything that resulted in a multi-hundred thousand dollar capital gain. That's a tough problem and is why I will likely never sell my house that I've owned for 39 years in my lifetime because I don't want to pay $100K in capital gains taxes.

But even if I have to move to a "home" someday, I have a plan.

Duke

[Joe R.]

Re: Scottsdale BJ auction

Duke,

There is a exemption for the sale of a primary residence $250,000.00 for single filers and $500,000.00 for married. This is a lifetime exemption which means that you can sell one primary residence, purchase another, sell it and you are still exempt from Federal Tax on gains.

JR

[Duke W.]

Re: Scottsdale BJ auction

I've been doing my taxes since I was 15. Trust me, I know the tax code as it relates to my situation better than any tax accountant could ever figure out.

The $250K per person exemption from capital gains on the sale of a personal residence dates to circa 1996, and it "renews" every two years. So you can sell and then buy a new primary residence every two years and exclude $250K/single, $500K/married. That's one reason for the real estate bubble. The tax code encourages people to flip houses frequently and discriminates against people who have owned a home for decades.

As I said, I've owned my house for 39 years. It's currently worth about $750K. My basis is a little over $50K. Since I'm not married my cap gains exclusion is $250K. You can do the math.

Last year I paid $59 in federal income tax on an income that was a decent multiple of average US family income, and it included a respectable five figure long term capital gain that I paid zero tax on. Of course, I had a large charitable deduction - the maximum 50 percent of AGI in the form of gift annuity contracts with the three universities that awarded me degrees.

There's more about this story here:

http://www.supportuw.org/news-post/gift-annuities-a-sound-vehicle/

Ah, yes. It is better to give than receive. This year's GA contracts started last Saturday.

Merry Christmas, everyone!

Duke

[Jim S.]

Re: Scottsdale BJ auction

The trouble with selling a collector car during your lifetime is the capital gains tax you may have to pay - 28 percent federal plus state tax, if applicable. In California all capital gains are subject to tax at ordinary income rates, which could be up to 13.9 percent. The federal rate is for "collectibles", which would include a vintage car. The 15 percent federal rate on long term gains only applies to financial assets and real property.

Duke

I am not a tax attorney, I am simply attaching an article that appeared in Sports Car Market written by John Draneas. This article was dated in March of 2008.

http://photos.zweezy.com/img_6a54cb04207c496ea9613ebe39340154.jpg

[Michael J.]

Re: Scottsdale BJ auction

I have to admit: I HATE paying taxes,
Duke

+1, it might be different IF I felt my taxes were used according to my own personal priorities and wishes. That is why I like charitable contributions, too bad the deductions for them from your tax bill is so paltry.

[Duke W.]

Re: Scottsdale BJ auction

It appears that it comes down to whether or not a vintage Corvette is considered an "antique".

Does anyone have any direct experience with the capital gains rate on vintage cars?

Duke