New tax rule on collector cars

[drhodgie]

Does any one know of new tax rules regarding vintage collector cars. A radio talk show I was listen to mentioned that it was not a good change for collectors. I haven't been able to find anything on the web so I thought I would throw it out there to the forum. Thanks

 

[Ohmess]

Where do you live? Tax rules vary greatly from location to location.

 

[adawil2002]

In Maine excise tax is based on the MSRP when the car was new and after many years plateaus to a reasonable number.

 

[jmackro]

I suspect they were discussing tax-free exchanges, or what are called 1031 exchanges. Real estate still qualifies for 1031 treatment, but not cars.

A little web searching turned up this pertinent quote on the irs.gov site:
Effective Jan. 1, 2018, exchanges of personal or intangible property such as machinery, equipment, vehicles, artwork, collectibles, patents, and other intellectual property generally do not qualify for nonrecognition of gain or loss as like-kind exchanges.
see: https://www.irs.gov/newsroom/like-kind-exchanges-now-limited-to-real-property

 

[craterface]

What Jay said. This was discussed in a recent issue of Sports Car Market in their legal column.

 

[Arde]

1031 exchanges are used to avoid capital gains on real estate sales, but capital gains are not enforced AFAIK in car sales...
Maybe the discussion was about enforcing capital gain taxes on the only cars that go up in value, classics.

I suspect they were discussing tax-free exchanges, or what are called 1031 exchanges. Real estate still qualifies for 1031 treatment, but not cars.

A little web searching turned up this pertinent quote on the irs.gov site:
Effective Jan. 1, 2018, exchanges of personal or intangible property such as machinery, equipment, vehicles, artwork, collectibles, patents, and other intellectual property generally do not qualify for nonrecognition of gain or loss as like-kind exchanges.
see: https://www.irs.gov/newsroom/like-kind-exchanges-now-limited-to-real-property