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Author Topic: RM23U0A160712 Superbird 440-4 4spd EB5 on eBay 9-17-18  (Read 2076 times)
Birdflu
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« Reply #50 on: September 30, 2018, 03:03:52 PM »

WOW again!  Shocked
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fastmark
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« Reply #51 on: October 01, 2018, 04:42:47 AM »

It is also a short term gain. So no Long Term basis for Capital Gains.


And you can no longer do a 1031 exchange.   That tax loophole formerly applicable to collector cars was done away with the recent "tax cut" reform.

Was is or was a 1031 exchange?
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Aero426
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« Reply #52 on: October 01, 2018, 08:12:28 AM »

It is also a short term gain. So no Long Term basis for Capital Gains.


And you can no longer do a 1031 exchange.   That tax loophole formerly applicable to collector cars was done away with the recent "tax cut" reform.

Was is or was a 1031 exchange?

It is called a like/kind exchange.  It kicks the tax liability can down the road.     Say that you bought a car in 1986 for $5000 and sell it for $100,000 today.     Your net taxable profit is $95,000 as a long term capital gain.     The 1031 exchange allowed you to defer that taxable amount as long as you bought another car or qualifying item within a specified time period.     Both sides of the transaction have to be handled by a qualified agent.    At some point in the future, tax would come due when you sold the last item and did not perform another 1031 exchange.     

Regarding the initial $5000 investment,  your restoration costs could not be added.    But things like repairs and selling costs (transportation to auction, lodging)  could be added.     If you lost money on the transaction, that can not be deducted.   

The 1031 exchange applied to things like real estate and certain collectible items, like cars.    The recent tax reform has eliminated the provision for collectibles in the law.   



 
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