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So you want to be in show biz?

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in Small Business Tax

Q. I’m thinking about investing in some show business memorabilia. If I later sell this property, will my gain be taxed at the rate for long-term capital gain? S.J., Los Angeles

A. It depends. If you sell the items less than a year after acquiring them, you’ll be subject to tax at your ordinary-income rate, which could be as high as 35 percent. If you sell the items after holding on to them for more than a year, you’re eligible for taxadvantaged long-term capital gains rates. But, instead of the usual 15 percent capital gains rate, the maximum tax rate on collectibles is 28 percent. Note: For these purposes, collectibles include works of art; antiques; precious metals or gems; coins or stamps; alcoholic beverages and other tangible personal property that the IRS has specified.

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