My grandmother died 28 years ago and left me two oil painting that are worth a great deal of money. An art Gallerie want to sell the painting for me and i would get 75% of the sale of the painting. will i have to report the earning i made on the sale of the painting and will i have to pay taxes. if i have to pay what is the percent i would have to pay?
2007-05-16 16:24:06 · 5 answers · asked by josie 4 in Business & Finance ➔ Taxes ➔ United States
I didn't know what the painting were worth until know. I had them for 28 years.And know i found out there worth a great deal of money.
2007-05-16 16:44:10 · update #1
You will pay capital gains tax on the increase in value from the time you inherited the paintings. It is very important that you get an expert opinion in writing on the value of these paintings at the time you inherited them. If they have a well-known provenance, a good appraiser can provide that for you.
Since these are classified as "collectible" the capital gains tax you will pay is 28% of the gain.
Shop around for the best deal you can find for commission on the sale of the paintings. The 25% commission (or whatever you pay) will reduce the amount realized from the sale. In other words, you will not pay tax on the commission you pay.
2007-05-16 17:01:11 · answer #1 · answered by ninasgramma 7 · 0⤊ 0⤋
You need to know what the value was when your grandmother died. You will have to pay taxes on your gain above that amount. Art is not subject to the 15% capital gains rate for federal taxes. Collectibles are subject to a tax rate of 28%.
FYI, "know" means "to perceive or understand as fact or truth; to apprehend clearly and with certainty"
"now" means "at the present time or moment"
2007-05-17 07:50:43 · answer #2 · answered by garyg7 7 · 0⤊ 0⤋
It does matter that you inherited it, but only if you know the Value of the paintings on the day your grandmother passed. This is because your basis in the painting is the value of the painting when it was passed to you. Let me use an example to clarify - if the painting was worth $1000 when you inherited it and you sell it for $10,000, than you will only be taxed on the $9000 gain. Your tax rate will be 15% of the gain.
2007-05-16 16:36:21 · answer #3 · answered by Gooch 2 · 1⤊ 2⤋
Yes, any gain would be taxable. The taxable gain is the appreciation from when your grandmother died until you sold it - I hope you have information from the estate, and that they were appraised at that time.
Maximum capital gains tax rate on collectibles is 28% - it's not like stocks where the max is 15%.
2007-05-17 03:08:37 · answer #4 · answered by Judy 7 · 0⤊ 1⤋
Yes, you would pay income taxes on your portion of the sales proceeds. It doesn't matter that you inherited it. All that counts is that you are selling it.
2007-05-16 16:29:34 · answer #5 · answered by Anonymous · 0⤊ 3⤋