capital gain rate on an antique owned for thirty years.?

Question

my mother recently sold an antique table she owned for thirty years. she has her receipt for the purchase in 1975 when she paid 5400.00.... she sold it in 2006 for 17000.00 my question is does she have to file a return. the proceeds were her only income besides her social security and everyone i ask i get different answers regarding what the tax rate will be in such a case.

Answer 1

Since she'd have $11,600 capital gain, she'd have to file. That isn't enough though to make any of her social security taxable. Maximum capital gains rate for collectibles is 28%, but she won't be anywhere near that. Her income probably has her in a 10% bracket, and her tax on this sale would more likely total a couple hundred dollars by the time her exemption and std deduction are subtracted.

Answer 2

You have a capital gain to report on Schedule D; however, it's not subject to the lower tax rates like selling a stock that's been held for 30 years. It would be taxed at the maximum 28% capital gain rate Code Sec. 1(h)(4)(A)(i). She'll need to file the return because it would otherwise appear that she has $17,000 in income. The filing of Schedule D will show that she has "basis" in the antique and her actual profit on the sale is less than $17,000.

Answer 3

I can certainly understand that you receive different answers from everyone you ask. There is special tax rules concerning capital gains on collectables. I am not certain I understand it completely. You might want to consult a tax professional. But here is my understanding. You use the Schedule D worksheet. It is almost beyond comprehension. But the bottom line is that you calculate your taxes base on two methods. 1. as the capital gains rate and 2. as the regular rate and take the lesser of the two. Now there is a special capital gains rate that applies to collectables of 28% which applies to your mother, but in any case the tax would be no more than her regular tax rate, which for a single person in that tax bracket would be about 10%. Now I do not know what her social security income amounts to, but there is a limit of earnings beyond which she might have to pay taxes on her social security because of the gain on the collectable sale.

Answer 4

Technically, yes. She would complete Schedule D along with her 1040.

Answer 5

Check it out on irs.gov. I don't think so. There's no paper trail, so to speak, like a miscellaneous 1099. Just a guess--I'm not a cpa.