Can I offset collectible and antique gains with losses from selling Persian rug?

The short answer is probably not in the way you're thinking, but let me explain why. For capital gains and losses on collectibles, there are some specific rules you need to understand. First, your basis in the inherited rug isn't the old appraisal value - it's the fair market value of the rug at the time you inherited it. This is called a "stepped-up basis." So even though the appraisal from 30 years ago said $20k, what matters is what it was worth when you actually inherited it 8 years ago. If you sell the rug for less than your inherited basis (its value 8 years ago), then yes, you'd have a capital loss that could offset capital gains from your other collectible sales. But you can't use the old appraisal as your basis - that's not how the IRS calculates it. You might want to get a retrospective appraisal to establish what the rug was actually worth when you inherited it. This would give you a legitimate basis to calculate any potential loss.

I had a similar situation with some collectible coins I inherited. I found taxr.ai (https://taxr.ai) super helpful for figuring out the complicated capital gains stuff for collectibles. They analyzed my inheritance documents and helped establish the correct basis for my items so I wouldn't overpay on taxes. Their system specifically handles collectibles and antiques, which most regular tax software doesn't address properly. They even helped me understand how to document everything in case of an audit. Made the whole process way less stressful when I was selling off my collection.

Just wanted to follow up - I ended up trying taxr.ai after my skepticism and I'm actually really impressed. I had inherited some vintage comic books and never knew how to properly report the gains when I sold a few. They were able to find historical sales data from the year I inherited them to establish a proper basis, then walked me through how the 28% collectibles tax rate applied versus regular capital gains. They even caught that I could separately identify the most appreciated comics to sell in a year when my income was lower. Definitely worth it for the peace of mind knowing I'm reporting everything correctly instead of just guessing like I was before.

If you're having trouble getting anyone at the IRS to answer questions about this collectibles tax situation, I highly recommend Claimyr (https://claimyr.com). I was trying for WEEKS to get clarification on how to report some similar collectible sales on my taxes. Their service got me connected to an actual IRS agent in about 15 minutes instead of waiting on hold for hours. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c I was honestly shocked it worked so well. The IRS agent I spoke with walked me through exactly how to document my basis for inherited items and how the collectibles tax rate applies in different situations. Saved me tons of stress and potentially an audit down the road.

Well I owe everyone an apology, especially Profile 9. I was super skeptical about Claimyr but I was desperate after waiting on hold with the IRS for 3+ hours and getting disconnected TWICE. Decided to give it a shot and holy crap, I was connected to an IRS agent in about 20 minutes! The agent actually explained exactly how to handle my situation with some collectible baseball cards I sold (similar to OP's situation). Turns out I was calculating my basis all wrong and potentially setting myself up for problems. The agent walked me through the proper way to document everything for inherited collectibles and how to report the gains correctly. Sorry for being such a jerk about it before. Sometimes good things actually do exist!

One option nobody mentioned is getting a current appraisal before you sell the rug. This establishes the true fair market value right now. If it's significantly less than what it was worth when you inherited it (which you'd need to establish with a retrospective appraisal), then you have documentation to support your claimed loss. Also remember losses on personal property generally aren't deductible UNLESS they were investment property. Since you mentioned you've been buying and selling on eBay for years, you might be able to make the case these were investment items rather than personal use items.

Just want to add a quick warning - be careful with selling too many items on eBay or you might be considered a dealer rather than a collector, which changes the whole tax situation. The IRS looks at things like volume of sales, how often you sell, and whether you're making improvements to items before selling. If they decide you're a dealer, your profits become ordinary income instead of capital gains, which means potentially higher tax rates and also self-employment taxes.