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Collectibles are defined (in this section in regard to retirement plans, but this section is referred to when discussing the 28% capital gain in the tax code also) in IRC Sec. 408(m)(2).
Here is a reference, look at page 14: http://www.irs.gov/pub/irs-tege/irc408.pdf
Obviously, this is a very short and non-inclusive list, however, I would advise my clients that most if not all antiques, including cars are considered collectibles for the purpose of the 28% max. capital gain tax. My reasoning is that any tangible item that has the potential to be sought after by a collector(s) would be considered a "collectible" item. Whether or not the car is used for pleasure or actually driven does not take away from the fact that it is still deemed a collectible.
Yes, I suppose that taXXXXX XXXXXterally, any asset could be a collectible if owned by someome who collects things. However, when I use the term "collector", I am referring to a person who deals in items such as antiques, and the term antique is the key word here.
The online access to Tax court decisions is down right now, and I can find no other case law on this particular situation. The words "any antique" in the Section of the code I referred you to is definitive and straightforward. You stated that the car is an antique, and as such, it fits the definition of IRC as a collectible.
I will also refer this question to the other tax experts for additional opinions/insights/feedback.
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Secion 408(m) of the Internal Revenue Code provides the following definitoin of a collectable. Admittedly it pertains to a particular section on what constitutes an investment for investment accounts. However, the definitions used by the IRS hold ture throughout.
From the IRS Code section on capital gains and losses, for collectable, for defination, the code refers to secion 408(m)
5) Collectibles gain and loss For purposes of this subsection- (A) In general The terms "collectibles gain" and "collectibles loss" mean gain or loss (respectively) from the sale or exchange of a collectible (as defined in section 408 (m) without regard to paragraph (3) thereof) which is a capital asset held for more than 1 year but only to the extent such gain is taken into account in computing gross income and such loss is taken into account in computing taxable income.
(2) Collectible defined For purposes of this subsection, the term "collectible" means - (A) any work of art, (B) any rug or antique, (C) any metal or gem, (D) any stamp or coin, (E) any alcoholic beverage, or (F) any other tangible personal property specified by the Secretary for purposes of this subsection. (3) Exception for certain coins and bullion For purposes of this subsection, the term "collectible" shall not include - (A) any coin which is - (i) a gold coin described in paragraph (7), (8), (9), or (10) of section 5112(a) of title 31, United States Code, (ii) a silver coin described in section 5112(e) of title 31, United States Code, (iii) a platinum coin described in section 5112(k) of title 31, United States Code, or (iv) a coin issued under the laws of any State, or (B) any gold, silver, platinum, or palladium bullion of a fineness equal to or exceeding the minimum fineness that a contract market (as described in section 7 of the Commodity Exchange Act, 7 U.S.C. 7) (!3) requires for metals which may be delivered in satisfaction of a regulated futures contract
REFERENCE: Section 408 (m)
The antique would be determined in the state in which it is registered. It may vary by state. However, most states have a 50 year limit while some others have 30 year for antique and 20 year for classic.
The antique license operation limitations approximate, very closely, the limitation described in the IRS Publications about what constitutes a collectible.
If the car is eligible for antiques plates in your state, and it is registered as such, then it is an antique.
A previous expert had commented on use as part of the conition of being a collectable, anticque or an auto not generaly subject to capital gains tax.
In every state, the DMV's allow auto owners to register your cars with special registratioins related to use and age. In nearly every state you can register a car as an anticque which is a limited use auto registration. However, state to state, it varies and some allow a condiin called classic, which is a 20 year car and considererd a collectable if you are using it in car shows, etc.
For Oklahoma cars that are at least 25 years old qualify as a classic or anticque auto.