Q Does the new tax law reduce the maximum tax rate for gains from sales of artwork? C.C., Scottsdale, Ariz.
A. No. A higher maximum federal income tax rate of 28% applies to long-term gains from the sale of collectibles like artwork (as opposed to the usual 15% maximum rate on long-term gains from sales of other capital assets (20% for single filers with income above $400,000 and joint filers with income above $450,000). The new tax law did not change the maximum 28% rate on collectibles gains.
Tip: As with sales of other assets, timing can be critical. Depending on your situation, you might move up sales into 2013 at year-end or postpone sales to defer taxable gains to 2014.