By Mike DiSabatino on Friday, 02 November 2012
Category: Weekly Tips

People Do the Craziest Things

 

People Do the Craziest Things
When tax laws are certain to change



Don Larsen, former New York Yankee baseball pitcher, suddenly decides to sell the uniform he wore when he pitched a perfect game during the 1956 World Series.
Former NCAA basketball coach Bob Knight decides to sell all his basketball championship rings.
Also up for auction:
  • Ozzie Smith, famed St. Louis Cardinal shortstop, Gold Glove awards
  • Pete Rose’s signed agreement banning him from baseball in 1989
  • Former boxing champion Evander Holyfield’s championship belts

What is happening

  1. Collectibles tax rates could be going up substantially in 2013 because the 28% tax rate on gains from the sale of these collectibles could be as high as 33-39.6%.
  2. Investment sales, like collectibles, could impact your Alternative Minimum Tax (AMT) exposure, effectively raising taxes on your other income in 2013.
  3. In addition, there could be an additional 3.8% tax on their memorabilia sales in 2013 because of a new Medicare surtax beginning in 2013 on investment earnings over $200,000 single and, with a marriage penalty, $250,000 for married couples filing joint tax returns.
  4. Even non-collectible investment tax rates are scheduled to rise. Long-term capital gains tax rates could go from 15% to 20% or higher.

Some tips