Capital Gains on muscle car (state of PA)

[mockingbird812]

Trying to help a friend out. Friend bought a nice muscle car brand new in 1970 and sold it in 2007 for a sizeable appreciation. Initially my friend was told by her accountant that a Capital Gains of 15% was owed, but more recently friend was told 28% because "the car is an antique". Does this make sense?

Appreciate any guidance. Thanks!

[iluv69s]

Did she take into consideration all the expense of storing and maintaining the vehicle for all these years?...i know the minimum for any body shop has to be 25 bucks a day for outside storage...

I believe if you did the calculation, she may have been able to do better by just putting the money in a CD..??? (depending on the car she bought)

I would think you can write off the expenses...but I'm no accountant??? Just my guess...

[YENKO DEUCE REGISTRY]

The question is about the tax rate, 15% vs. 28% on a long term capital asset, not really on how to calculate the gain itself. BTW, if you claim 'storage' fees as an expense, be sure you can back it up with receipts.

I have not looked at a schedule D in a while, I'll check it out - but it sounds 'unique' to me. However, never underestimate the IRS!

[chads454Ls6]

It should be 15% capital gains if you have owned the car longer than a year. It is 25% if you own less than a year.
Unless some new tax law has changed this,that is what it has been. Maybe Marlin can chime in as he is a numbers cruncher.

[YENKO DEUCE REGISTRY]

The short vs. long term break is indeed 1 year, keep in mind that if you keep the car exactly 1 year that is still considered 'short' - so sell the day after you've owned it a year!

[Johnny Horsepower]

[ QUOTE ]
Trying to help a friend out. Friend bought a nice muscle car brand new in 1970 and sold it in 2007 for a sizeable appreciation. Initially my friend was told by her accountant that a Capital Gains of 15% was owed, but more recently friend was told 28% because "the car is an antique". Does this make sense?

Appreciate any guidance. Thanks!

[/ QUOTE ]

great topic! looking foward to the info thats unearthed!

[mockingbird812]

Thanks for info so far guys. Any ideas what the relevance in referring to the car as "antique" by the accountant?

[nuch_ss396]

I believe muscle car investments took the place of real estate
investments. If you purchase & keep a house more than two
years, you don't have to pay capital gains tax on it.
Automobiles should be exactly the same situation. Leave it
to the bleep-ing government to find a way to take more
money out of our pockets.

Now this is going to move into a politically toned topic soon.
Nuch

[chads454Ls6]

No idea. I have claimed every penny I have ever made,as painful as that was,and my Cpa has always filed it between 15-25% depending on how long i owned the car so like I said unless they have changed something,that is how i have paid in the past.

[YENKO DEUCE REGISTRY]

[ QUOTE ]
I believe muscle car investments took the place of real estate
investments. If you purchase & keep a house more than two
years, you don't have to pay capital gains tax on it.
Automobiles should be exactly the same situation. Leave it
to the bleep-ing government to find a way to take more
money out of our pockets.

Now this is going to move into a politically toned topic soon.
Nuch

[/ QUOTE ]

Please disregard the tax information contained in the post quoted from above.

Tax info can be difficult enough without including real estate tax considerations into the equation. Let's stick to cars as capital assets, and what the applicable rate would be.

Back on topic, the 28% statement in the first post rings of Partnership Interest accounting which has a 28% rate gain for 'collectibles'. I'll look it up this afternoon, but I believe the 15% rate is the one to use.