Hello gabeholio-ga,
According to Internal Revenue Service publication 544, gain from the
sale of personal property, such as jewelry, is a capital gain.
Internal Revenue Service
Publication 544 (2005), Sales and Other Dispositions of Assets
http://www.irs.gov/publications/p544/index.html
Internal Revenue Service
Publication 544 (2005), Sales and Other Dispositions of Assets
2. Ordinary or Capital Gain or Loss
http://www.irs.gov/publications/p544/ch02.html#d0e3943
?Capital Assets
Almost everything you own and use for personal purposes or investment
is a capital asset. For exceptions, see Noncapital Assets, later.
The following items are examples of capital assets.
Stocks and bonds.
A home owned and occupied by you and your family.
Timber grown on your home property or investment property, even if you
make casual sales of the timber.
Household furnishings.
A car used for pleasure or commuting.
Coin or stamp collections.
Gems and jewelry.
Gold, silver, and other metals.
Personal-use property. Property held for personal use is a capital
asset. Gain from a sale or exchange of that property is a capital
gain. Loss from the sale or exchange of that property is not
deductible. You can deduct a loss relating to personal-use property
only if it results from a casualty or theft.?
Capital gains are reported on form 1040, schedule D.
Internal Revenue Service
Publication 544 (2005), Sales and Other Dispositions of Assets
4. Reporting Gains and Losses
http://www.irs.gov/publications/p544/ch04.html#d0e6439
?Personal-use property. Report gain on the sale or exchange of
property held for personal use (such as your home) on Schedule D. Loss
from the sale or exchange of property held for personal use is not
deductible. But if you had a loss from the sale or exchange of real
estate held for personal use for which you received a Form 1099-S,
report the transaction on Schedule D, even though the loss is not
deductible. Complete columns (a) through (e) and enter -0- in column
(f).
Long and Short Term
Where you report a capital gain or loss depends on how long you own
the asset before you sell or exchange it. The time you own an asset
before disposing of it is the holding period.
If you hold a capital asset 1 year or less, the gain or loss from its
disposition is short term. Report it in Part I of Schedule D. If you
hold a capital asset longer than 1 year, the gain or loss from its
disposition is long term. Report it in Part II of Schedule D (Form
1040).?
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?Inherited property. If you inherit property, you are considered to
have held the property longer than 1 year, regardless of how long you
actually held it.?
Internal Revenue Service
Schedule D
Capital Gains and Losses
http://www.irs.gov/pub/irs-pdf/f1040sd.pdf
Information on how to report your capital gains can be found in the
instructions for Schedule D.
Internal Revenue Service
2005 Instructions for Schedule D
Capital Gains and Losses
http://www.irs.gov/pub/irs-pdf/i1040sd.pdf
?In general, the cost or other basis is the cost of the property plus
purchase commissions and improvements, minus depreciation, and
amortization, and depletion. If you inherited the property, got it as
a gift, or received it in a tax-free exchange, involuntary conversion,
or ?wash sale? of stock, you may not be able to use the actual cost as
the basis. If you do not use the actual cost, attach an explanation of
your basis.?
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?The basis of property acquired by gift is generally the basis of the
property in the hands of the donor. The basis of property acquired
from a decedent is generally the fair market value at the date of
death. See Pub. 551 for details.?
According to this information, your capital gains tax appears to
depend only on the sale price, how long you have held the asset, and
the cost basis. The fair market value only appears to be used when it
is necessary to determine the cost basis when the asset was acquired
from someone who has died. In that case, the fair market value at the
date of death is used as the cost basis.
California capital gains and losses are reported on form 540, schedule
D, only if there is a difference between California and federal
capital gains and losses.
California Franchise Tax Board
Form 540 Schedule D
California Capital Gain or Loss Adjustment
http://www.ftb.ca.gov/forms/05_forms/05_540d.pdf
California Franchise Tax Board
Instructions for California Schedule D (540)
California Capital Gain or Loss Adjustment
http://www.ftb.ca.gov/forms/05_forms/05_540dins.pdf
?Use California Schedule D (540) only if there is a difference between
your California and federal capital gains and losses.?
I hope you have found this information helpful. If you have any
questions, please let me know by using the request for clarification
feature, prior to rating the answer.
Googlenut
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