People Do the Craziest Things
When tax laws are certain to change
|♦||Don Larsen, former New York Yankee baseball pitcher, suddenly decides to sell the uniform he wore when he pitched a perfect game during the 1956 World Series.|
|♦||Former NCAA basketball coach Bob Knight decides to sell all his basketball championship rings.|
|♦||Also up for auction:
What is happening
- Collectibles tax rates could be going up substantially in 2013 because the 28% tax rate on gains from the sale of these collectibles could be as high as 33-39.6%.
- Investment sales, like collectibles, could impact your Alternative Minimum Tax (AMT) exposure, effectively raising taxes on your other income in 2013.
- In addition, there could be an additional 3.8% tax on their memorabilia sales in 2013 because of a new Medicare surtax beginning in 2013 on investment earnings over $200,000 single and, with a marriage penalty, $250,000 for married couples filing joint tax returns.
- Even non-collectible investment tax rates are scheduled to rise. Long-term capital gains tax rates could go from 15% to 20% or higher.
- Review your investment portfolio for possible tax efficient transactions. This could mean selling a valuable collectible or other long-term gain investments.
- Consider making tax projections if the sale of investments might expose your income to the two Medicare surtax provisions (.9% of wages and 3.8% of investment income).
- Conversely, if you are an avid collector look for deals in December as other collectors sell their memorabilia to take advantage of the lower tax rates in 2012!