Have a Tax Question? Ask a Tax Expert
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Do you know what tax bracket you are in, not counting any gain you may have on the sale of the painting.
Are you typing something to me?
Did you inherit the painting as a result of your father's death?
You will have to estimate the painting's fair market value at the date of your father's death and that will become your tax basis (cost) for purposes of determining your capital gain on the sale.
do you have an answer?
Note that you are dealing with a collectible, so the tax rate on the gain will be the same as the highest tax rate you pay on your other income, not the capital gains rate;
that means you will pay at the percentage rate of 10, 15, 25, or 28, depending upon what tax bracket you fall into. Since you said your rate was 20%, you must have combined something as there is no 20% tax bracket. You are likely in the 25% tax brackett.
The highest tax bracket you are in means the rate that your last $1. of income is taxed at.
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you mean i have to pay 78000*25%
No. Only the on the difference between the fair market value when your Dad died and the $78,000. sales proceeds.