Capital gains rate on collectibles - is it flat 28% or does it scale like regular investments?

So just to make sure I understand - if I'm in the 24% tax bracket and I sell a collectible coin I've owned for 2 years, I'd pay 24% on the profit? And what about state taxes, are those additional?

Yes, if you're in the 24% marginal tax bracket and sell a collectible you've owned for over a year, you'd pay 24% on the profit (since that's below the 28% cap). State taxes are indeed additional and vary by state. Most states will tax capital gains as regular income at your state income tax rate. Some states have no income tax, while others might have their own special rates for capital gains. You'll need to check your specific state's rules or consult with a tax professional familiar with your state's tax code.

Does it handle other weird tax situations too? I have some crypto mining income plus I sold an NFT last year and I have no idea how any of that gets taxed.

How accurate is this compared to like TurboTax or something? I'm always skeptical of tax tools I haven't heard of before. Did your numbers match what you eventually filed?

Yes, it definitely handles crypto situations too! It was actually created partly because of how complicated crypto taxes have become. It clearly explains how mining income is treated differently from capital gains on selling crypto or NFTs. The accuracy was spot-on. I actually compared the results with TurboTax and they matched perfectly. The difference was that taxr.ai explained WHY things were taxed the way they were, which TurboTax didn't do clearly. I ended up using both - taxr.ai to understand my situation and TurboTax to file. The numbers were identical but I actually understood what was happening with my taxes for once.

How does this even work? The IRS phone system is so broken - are you saying this actually gets you past the "all our representatives are busy" message?

Sounds like a scam honestly. Why would I pay a third party to call the IRS when I can just keep calling them myself? Not to mention giving my personal info to some random company.

It basically uses an automated system that continually calls the IRS and navigates through their phone tree until it actually gets through to a representative. Then it calls you and connects you. It saved me literally hours of holding time. I totally get the skepticism - I felt the same way at first. But it's not asking for any sensitive personal info - you're still the one talking directly to the IRS agent. Think of it like having someone wait in line for you. The service just gets you connected to the IRS, and then you handle the actual conversation yourself. I was able to get my collectibles question answered in a single day instead of wasting multiple afternoons on hold.

What about things like baseball cards or Pokémon cards? Are those considered collectibles too for tax purposes?

Yes, baseball cards, Pokémon cards, comic books, and similar items would all be considered collectibles for tax purposes. Basically any physical item that people collect and that potentially appreciates in value would fall under the collectible capital gains rules. The IRS doesn't provide an exhaustive list of everything that counts as a collectible, but the general rule is that tangible personal property held for investment rather than personal use will be treated as a collectible. So your collection of rare Pokémon cards would definitely qualify if you're selling them for a profit.

When you inherit collectibles, you get what's called a "stepped-up basis" - meaning your cost basis is the fair market value of the items at the time of the person's death, not what they originally paid. This can be a huge tax advantage! If you sell them right away for approximately what they were worth when you inherited them, you might have little to no capital gains to pay taxes on. The challenge is properly documenting that value - getting an appraisal at the time of inheritance is ideal.

This is really helpful info about the hobby vs. investment classification! I hadn't thought about that distinction. Since I just bought a few vintage comics as a one-time thing and don't plan to make it a regular buying/selling activity, I should be okay with capital gains treatment, right? Also, when you mention adding restoration costs to the cost basis - does that include things like getting them professionally graded by CGC or CBCS? Those grading fees can be pretty expensive but if they increase the value significantly, it would be great to know I can include those costs.

Yes, if you're just making a one-time purchase and sale of a few comics, that should clearly fall under capital gains treatment rather than business income. The IRS generally looks at factors like frequency of transactions, time spent, and intent to make a profit from regular trading activity. And absolutely yes, professional grading costs from CGC, CBCS, or other reputable grading services can be added to your cost basis! These are considered costs that improve or preserve the value of your collectible. So if you paid $500 for a comic and then spent $100 to get it graded, your basis would be $600. If you later sell it for $1,000, you'd only pay capital gains tax on $400 instead of $500. Just make sure to keep all your receipts and documentation - the grading invoices, shipping costs to and from the grading company, any insurance costs, etc. The IRS likes to see clear records for collectible transactions since the values can be subjective.

Thanks for sharing your experience with the baseball cards! That's really reassuring to hear from someone who's actually been through this process. I'm definitely planning to hold onto the comics for more than a year - that short-term vs long-term distinction is huge when you're looking at potentially paying your full marginal rate without any cap. Your point about keeping detailed records is well taken. I've already started a spreadsheet tracking what I paid for each comic, but I hadn't thought about including storage costs. Are things like acid-free bags, backing boards, and storage boxes deductible as part of the basis? Or is that getting too granular? Also, did you find any particular challenges when it came to proving the fair market value at the time of sale, especially for more obscure collectibles that don't have as clear of a market price?

Storage costs like acid-free bags, backing boards, and storage boxes are generally considered personal expenses rather than improvements to the collectibles themselves, so they typically can't be added to your cost basis. The IRS usually only allows costs that directly improve or preserve the specific item's condition or value - like professional grading, authentication, or restoration services. For proving fair market value, I found that graded comics are much easier since you can reference recent sales of the same issue in the same grade on platforms like eBay sold listings, Heritage Auctions, or GoCollect. For ungraded comics, it gets trickier - I ended up getting a professional appraisal for my higher-value cards to avoid any issues with the IRS. One tip: if you're dealing with key issues or high-value comics, consider getting them graded before selling even if you bought them raw. Not only does it typically increase the sale price, but it also gives you a clear, objective condition assessment that makes determining fair market value much easier for tax purposes.

This is such great strategic advice about timing the sales! I never thought about how my overall income in a given year could affect the tax rate on collectibles. That 4% difference you saved really shows how much planning ahead can matter. Your point about keeping detailed records of research and education is smart too. Even if you can't deduct those expenses, showing that you're approaching collecting systematically rather than just casually buying things you like could definitely help if the IRS ever questions whether it's investment activity versus a hobby. Question for you - when you say "bunching sales," do you mean literally waiting until January of the following year, or is there more nuance to the timing? I'm wondering if there are other factors like estimated tax payments that might complicate the strategy of shifting income between tax years.