Net capital gains from selling collectibles (such as coins or art) are taxed at a maximum 28% rate.schedule D and 8949 do not segregate amounts from collectibles and other things. Everything is added together. How does irs figure 28% on coins and something less on everything else?

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Wayneballard

Question

Tax on coins

Forum|Forum|2 years ago
January 29, 2024
1 reply
0 views

Net capital gains from selling collectibles (such as coins or art) are taxed at a maximum 28% rate.
schedule D and 8949 do not segregate amounts from collectibles and other things. Everything is added together. How does irs figure 28% on coins and something less on everything else?

Not A Product Question

rjs

Employee

Form 8949 actually does segregate sales of collectibles. The sale of collectibles is identified on Form 8949 by putting adjustment code C in column (f) for the sale.

The sales of collectibles are totaled on the 28% Rate Gain Worksheet, and the result of that worksheet goes to Schedule D line 18. The Schedule D line 18 amount goes to the Schedule D Tax Worksheet. The calculation of the tax for the return is done on the Schedule D Tax Worksheet, which applies the appropriate percentage to each type of income.

WayneballardAuthor

My understanding is collectibles are taxed at 28% regardless of your income level. My income level being very low, schedule D tax worksheet taxes my collectibles as ordinary income 11.87% in my case. I like that, but is my understanding incorrect?

Opus 17

Employee

Collectibles are taxed as ordinary income, with a maximum of 28%. Your ordinary income tax rate is either 10%, 12%, 22%, 24%, or higher depending on your tax bracket. If your "blended rate" (which is not a real thing, just the average of all your taxes against all your income) is 11.something%, then most of your income is being taxed in the 12% bracket.