"Collectibles" Held Long-Term and Sold at a Gain Are Subject

question 90

Essay

"Collectibles" held long-term and sold at a gain are subject to maximum tax rate of 28%.An individual taxpayer recently sold a baseball card for $400.The card had been held for several years and $40 was originally paid for it.The card depicts a famous baseball player (who hit 73 home runs in a recent season) when he was a rookie in the major leagues.Explain why the baseball card is or is not a collectible.

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Definitions:

Withdrawals

Money taken out from a bank account or the act of removing assets from a business by the owner for personal use.

Premium for Admission

An additional charge over the regular price for entry into an organization, service, or area typically offering greater benefits.

Bonus

A bonus is a form of additional compensation paid to an employee above their normal wage, often as a reward for reaching specific performance targets or for exceptional work.

Capital Accounts

Accounts on a company's balance sheet representing the original investment plus retained earnings and adjustments.