What will happen to your collection when you die? 4 4

[fifties]

8 hours ago, lou_fine said:

Are you sure this is the way personal income taxes work in the United States?  

If so, it would make no sense for anybody to ever sell off any of their taxable assets such as stock equity investments, property, comics, etc. unless they needed the specific funds to pay for something at a particular point in time.  Everything else would then be simply left to the heirs to sell completely tax free.  

If so, then I am moving down to the States before I die.  

The upgraded cost basis upon death works for real property, but apparently as has been posted, not for personal property.  My bro and I inherited and sold our parents house on the death of our mother in 2010.  They had bought it in the early '80's, and California Real Estate appreciated quite well, in spite of the 2008 recession.  We were not liable for any taxes.  I think we each got a hundred grand or so.

[lou_fine]

11 minutes ago, fifties said:

The upgraded cost basis upon death works for real property, but apparently as has been posted, not for personal property.  My bro and I inherited and sold our parents house on the death of our mother in 2010.  They had bought it in the early '80's, and California Real Estate appreciated quite well, in spite of the 2008 recession.  We were not liable for any taxes.  I think we each got a hundred grand or so.

What part of California is this in since that sure does not sound like what property returns (i.e. $100,000 X 2 = $200,000 gain) should be after a near 30-year holding period.? I thought property brought back in the early 80's for $100K would now be selling for multi-million dollars figures by now for what would amount to healthy 7-figure gains.  

I totally understand that you and your brother would not be liable for any taxes if you sold the property upon inheritance since it would not have had time to make much gains.  The question is, did your parents have to pay any estate or "death" taxes on the capital gain upon the transfer of the property into both you and your brother's name?  

Edited January 4, 2020 by lou_fine

[jimbo_7071]

I have always taken it for granted that I'll hold onto my collection until I die, but the one thing that would make me sell it would be failing eyesight. If my eyesight deteriorated to the point that I couldn't enjoy looking at my comics, there wouldn't be any point to hanging on to them. 

Edited January 4, 2020 by jimbo_7071

[Hamlet]

I’m planning on building my coffin out of longboxes of drek.

[lou_fine]

9 hours ago, Joe Ankenbauer said:

However, if I hold onto my collection until I pass away, that is quite advantageous regarding taxes. My heirs would be given a new "cost basis," which is the value of my collection at the time of my death. They could then sell the collection and keep all the proceeds, because if they sell it soon after my death, there would be little time for my collection to appreciate.

 

5 hours ago, GreatCaesarsGhost said:

I will now have to consider leaving my collection to my heirs. I think the 28% bite gets avoided when the collection goes thru inheritance, as discussed above

I guess it must be a slow week as per usual during this time of year, so I decided to Google the impact of taxes on collectibles upon death in the USA and Canada.  

From what I can ascertain, the difference is like night and day between the 2 countries.  Looks like the Canadian government and financial institutions all trumpet the fact that Canada no longer has any estate or inheritance taxes, unlike the poor Americans who have estate taxes that start at 18% before being maxed out at 40%.  Typical spin from the Canadian government because they fail to mention that the poor unlucky Americans apparently have a lifetime exemption of $11.2M dollars for estate taxes, while those lucky Canadians don't need an exemption because they don't have any estate taxes to worry about.  Of course, lying Justin forgets to point out that upon your death, all of your assets are deemed to have been disposed of at fair market value and you are then liable for any capital gains taxes due, which in most cases would be a huge amount.        

So, not sure if this I am reading this right or not..........let's say a person dies and have total capital gains of $6M (say $3M for real estate, $2M for equity investments, and $1 M for collectibles.  Just a simple example since I would be nowhere close to any of these numbers here.   Now, if you were a poor unlucky American citizen, this means you would have $0 taxes owing for both your capital gains and your estate taxes bcause you did not surpass the $11.2M lifetime exemption.  Now, if you are a lucky Canadian, you indeed don't have to pay any estate taxes at all, but would have the privilege of paying personal income taxes on 50% of your capital gains.  In other words, no estate taxes, but the lucky Canucklehead would get to hand over $1,494,000 (i.e. $6M capital gain X 50% taxable capital gains rate X (33% max federal tax + max 16.8% provincial tax)) to the tax department upon their death.     

I feel so privileged and lucky now!!!  

[Mr. Lodge]

Not a tax attorney and not sure about Canada, but I think there would be no US capital gains tax on a decedent’s final income tax return as there was no sale. if FV of total estate assets does not exceed the approx 11M exemption amount, there would also be no estate tax. All inherited property (including collectibles) would get a stepped up basis (to FV) for the beneficiaries such that those collectibles could then be sold and only taxed on subsequent appreciation. Not sure about how various state tax treatment could differ.  
 

[lou_fine]

7 hours ago, HRCostigan said:

Maximum rate of 28%.  Will match your marginal rate if lower, as I understand it.

https://www.irs.gov/taxtopics/tc409

Boy, don't you love the internet and their conflicting information:

https://www.investopedia.com/articles/personal-finance/061715/how-are-collectibles-taxed.asp

This link here seems to imply that gains from your collectibles would be taxed at the maximum 28% rate, regardless of what your marginal tax rate is.  

I actually believe the first interpretation is correct here, but again, I am definitely no tax expert here especially when it comes to a foreign country.  

[lou_fine]

20 minutes ago, Mr. Lodge said:

Not a tax attorney and not sure about Canada, but I think there would be no US capital gains tax on a decedent’s final income tax return as there was no sale. if FV of total estate assets does not exceed the approx 11M exemption amount, there would also be no estate tax. All inherited property (including collectibles) would get a stepped up basis (to FV) for the beneficiaries such that those collectibles could then be sold and only taxed on subsequent appreciation. Not sure about how various state tax treatment could differ.  
 

Hey Mr. Lodge, according to the comics and the TV show, you would certainly know about money matters.   

From what I am reading on the internet at least, it sounds like your take on this whole tax situation is about right. 

The only question which I have is how can a Canadian citizen hop down across the border and become a honest taxpaying American citizen just before they get get booted up to that big comic shop in the sky?    

[fifties]

13 hours ago, lou_fine said:

What part of California is this in since that sure does not sound like what property returns (i.e. $100,000 X 2 = $200,000 gain) should be after a near 30-year holding period.? I thought property brought back in the early 80's for $100K would now be selling for multi-million dollars figures by now for what would amount to healthy 7-figure gains.  

I totally understand that you and your brother would not be liable for any taxes if you sold the property upon inheritance since it would not have had time to make much gains.  The question is, did your parents have to pay any estate or "death" taxes on the capital gain upon the transfer of the property into both you and your brother's name?  

You're asking me to remember an occurrence that took place 10 years ago, when I have trouble remembering what I had for breakfast yesterday, LOL!  Our folks' assets were held in a living trust.  IDK if that matters, tax-wise, but the property did not have to go through probate.  I do remember that when my wife died 3 years ago, I simply had to produce her Death Ctf in order to have lenders, etc., on our collection of SFR's change title holdings into my name alone.  In California, property held as "Joint Tenants" automatically transfers upon the death of any owner.  AFAIK, my mother, the last survivor, did not have to pay any estate or inheritance tax.  I believe that threshold is at or above at least one million.

AFA appreciation in Southern California (they lived in Camarillo, Ventura County), SoCal took a helluva whack in the 2008-2012 period, and keep in mind that appreciation since the depth of that, 2012, has brought values back to at or above what they were in 2006.  So comparison to the then value in 2010 is really meaningless.  I don't remember exactly what they paid, nor exactly what we sold for, but I believe it was somewhere around $225,000 or so, and then there were commissions and closing costs deducted.

[AnkurJ]

I told the wife to send everything to Heritage if something happens to me. As of now I have one kid who already has a collecting bug and also loves to read. Hopefully that continues to flourish. 

[Cat-Man_America]

I'm too old to think about joining any underground movement.  

[porcupine48]

On 1/2/2020 at 5:55 PM, D84 said:

When I feel my time is coming to an end, I will go a comic store and find that one kid looking at the vintage books in wonder.  That kid will get my collection for free.

That's pretty amazing.

I've spoken to my spouse to make sure my family gets NOTHING-when I was ill,certain members already started squabbling over my comics and records-what they were taking.Made me go so far as to get some legal advice here on how to try and protect her from the vultures.I've made a list of my more expensive albums,singles,toys ect and the plan is for her to piece it out,semi-retire,make a small living off the proceeds.Not that she'll be a millionaire,but -thirty years so far of amassing and never releasing it should bring in a few bucks for a few years.I did very well buying when things were very cheap.

[comicnoir]

On 1/4/2020 at 1:31 AM, lou_fine said:

 

I guess it must be a slow week as per usual during this time of year, so I decided to Google the impact of taxes on collectibles upon death in the USA and Canada.  

From what I can ascertain, the difference is like night and day between the 2 countries.  Looks like the Canadian government and financial institutions all trumpet the fact that Canada no longer has any estate or inheritance taxes, unlike the poor Americans who have estate taxes that start at 18% before being maxed out at 40%.  Typical spin from the Canadian government because they fail to mention that the poor unlucky Americans apparently have a lifetime exemption of $11.2M dollars for estate taxes, while those lucky Canadians don't need an exemption because they don't have any estate taxes to worry about.  Of course, lying Justin forgets to point out that upon your death, all of your assets are deemed to have been disposed of at fair market value and you are then liable for any capital gains taxes due, which in most cases would be a huge amount.        

So, not sure if this I am reading this right or not..........let's say a person dies and have total capital gains of $6M (say $3M for real estate, $2M for equity investments, and $1 M for collectibles.  Just a simple example since I would be nowhere close to any of these numbers here.   Now, if you were a poor unlucky American citizen, this means you would have $0 taxes owing for both your capital gains and your estate taxes bcause you did not surpass the $11.2M lifetime exemption.  Now, if you are a lucky Canadian, you indeed don't have to pay any estate taxes at all, but would have the privilege of paying personal income taxes on 50% of your capital gains.  In other words, no estate taxes, but the lucky Canucklehead would get to hand over $1,494,000 (i.e. $6M capital gain X 50% taxable capital gains rate X (33% max federal tax + max 16.8% provincial tax)) to the tax department upon their death.     

I feel so privileged and lucky now!!!  

Capital gains only applies to secondary properties, not to primary residences.

[fifties]

11 hours ago, comicnoir said:

Capital gains only applies to secondary properties, not to primary residences.

I believe you're wrong on that.  There's a threshold dollar limit as to what escapes taxation, and above that would be considered capital gains income, subject to the tax man.

[comicnoir]

52 minutes ago, fifties said:

I believe you're wrong on that.  There's a threshold dollar limit as to what escapes taxation, and above that would be considered capital gains income, subject to the tax man.

I'm talking about in Canada, where I live.

[lou_fine]

14 hours ago, comicnoir said:

Capital gains only applies to secondary properties, not to primary residences.

Exactly right as I am sure that everybody north of the border are well aware that your principal residence that you live in is tax free when you sell it.  

Of course, unlike south of the border where it is taxable, you are not allow to write off the interest payments on your principal home for tax purposes. 

The numbers which I was using for my example was just random numbers made up for ease of explanation. 

[N e r V]

On topic I’ll sell mine off into charity if possible with a few select items going to family/friends.

I’m betting on global warming though to take everything out before me...

[fifties]

4 hours ago, N e r V said:

 

I’m betting on global warming though to take everything out before me...

According to Nostradamus, that'll occur in May, 3797, but it won't be any "warming", and nothing will be left.

[Ricksneatstuff]

My wife will get a nice interest free advance from Heritage and hopefully be pretty well set after final settlement. 

 

[N e r V]

36 minutes ago, Ricksneatstuff said:

My wife will get a nice interest free advance from Heritage and hopefully be pretty well set after final settlement. 

 

Rest in “Peanuts” Mr. Akers...