The value of your old Ferrari surpassed your means...

Collectibles, including cars, are taxed at 28%. There is no long-term 15% rate at this time.

 

Wow, long time we have not seen tspringer! Welcome back...

 

If you say you saw it, I guess I believe you. Maybe it was like the mythical "$200 Porsche" but it was in NO way representative of Lusso prices. I was in the market for a Daytona or possibly a Lusso at that time, and I spent quite a bit of time looking at various cars, and I can tell you that I never found a running/driving Lusso for under $100k.

There were running/driving, and even fairly decent, Daytonas available for under $100k, though, but even those were not down that low.

Just to give you an idea, I just looked at the October 2001 issue of Ferrari Market Letter. It's true that FML's asking prices are probably a bit on the high side, but this should give you a flavor:

s/n 4297 $129,900
s/n 4441 £125,000
s/n 5359 $169,900
s/n 5397 $175,000
s/n 5729 £175,000

From the next (Oct 21) issue, as the Oct 6 archive didn't seem to have V8 classifieds entered yet, some 308GTS QVs:

s/n 50325 $39,500
s/n 52337 $34,500
s/n 52837 $38,500
s/n 57661 $35,000
s/n 57973 $39,000

Worth about the same? Draw your own conclusions.

 

Thanks for the replies.

 

Cars are not taxed at the 28% rate. They are taxed at the 15% capital gains tax rate.

There was an article last year in SCM about this. In the article they talked about collector cars being taxed as collectibles at the 28% rate. This was one persons opinion. Subsequently, more research was done and lots of folks chimed in and a retraction was printed as it was determined that in fact the IRS accepts the 15% rate as it is impossible to prove that someone purchased a car purely as a collectible and not as a long term capital investment (like real estate) or for its utility use (transportation). As the "use" argument is subjective, the IRS simply goes with the 15% rate. That is my understanding and I did TONS of checking on this before I sold my car earlier this year.


As to avoiding the capital gains..... here is a good idea on it:

Sell your car for cash. Not in an effort to hide the transaction, but simply because you can afford to sell it for a tiny number and possibly avoid or defer taxes. For example, lets say you have a Daytona and you wish to sell it for $300K. Instead, sell it for only $15,000 but demand payment in "US Legal Tender Currency to consist of 300 $50 US Coins". What your looking for is payment in US legal tender $50 GOLD coins. Currently, these coins bring somewhere around $1K each on the open market. But their legal tender face value is $50. So you can sell your car for $15K.

Now down the road when you wish to liquidate the gold position.... you may have some tax issues.


Hey Tex! I have been lurking.... but busy messing about buying real estate.





Terry

 

Looking to offset the car gains ;-)

 

Does that really work? It seems a bit sketchy to me, but what do I know?

Where's Dr. Who when we need him?

 

Dunno whether it would work relative to a car.

But... there was a recent legal case in Las Vegas where a defendant was found Not Guilty in a Federal tax evasion case where the defendant was self employed and payed themselves in gold coins claiming as income the face value only of the coins. So in effect their business purchased the gold coins at actual value and then used them to pay the individuals payroll at legal tender face value. The IRS said they were guilty of tax evasion because they claimed their income was $X (being the legal tender face value) when their actual income was the total of the market value of the gold. The jury ruled that since the gold coins in fact had a US Govt. legal tender face value as specified on the individual coins, "legal tender for all debts public and private" that the coins could in fact be used for exactly that. In other words... Not Guilty.

Keep in mind.... the jury did not say the defendants did not owe any taxes. They only ruled that no tax evasion had been proven since their pay was in fact as reported relative to the legal tender value of the method of payment. The IRS could of course bring another case for taxes due if/when the gold itself is sold. Still, a very interesting can of worms!




Terry

 

Interesting, but none of my coins have "legal tender for all debts public and private" stamped on them, it seems to only be printed on my cash.....

 

The Coinage Act of 1965, Pub.L. 89-81, 79 Stat. 254, enacted 1965-07-23, eliminated silver from the circulating dimes and quarter dollars of the United States, and diminished the silver content of the half dollar from 90% to 40%. This act was in response to coin shortages caused by the rising price of silver.

In addition to the above provisions, for which it is best known, the act:

* Allowed the Secretary of the Treasury to continue to strike 90% silver coins for up to five years, until the Secretary determined there was an adequate supply of clad coins. This authority was exercised, through 1966, though the coins were dated 1964.

* Forbade the minting of silver dollars for five years.

* Made all coins and currency of the United States (including certain bank issues) a legal tender. This has been taken to reverse the demonetisation of the Trade Dollar.

* Gave the Secretary broad discretion to enter into contracts to assure an adequate supply of clad coins, without regard to public procurement laws.

* Established a Joint Commission to make recommendations regarding coin and currency.

http://en.wikipedia.org/wiki/Coinage_Act_of_1965

 

http://www.hagerty.com/NewsManager/templates/template_prot.aspx?articleid=638&zoneid=2

 

I stand corrected (I hope).

 

Anyone have the text of the SCM letter "correction" to 15%? I found the original 28% article in the Oct 2007 issue.

 

I am in the process of selling my pf coupe. My accountant said it was standard capital gain same as real estate. If you have big losses in something else like real estate your tax on the gain can be less than 15%, IIRC. The losses can be brought forward three years if you cannot absorb them all in one year, IIRC.

Selling a car overseas and diverting the money to an offshore account sounds illegal to me. You may not stand a big chance to get caught but for me it would not be worth the risk to try.

Tom W

 

Not to argue, but 2001 was well over 3 or 4 years ago, and the market was still dropping. You can question me all you like, I know what I was looking at. I spent over 24 hours going back onto ebay looking at that car, calculating, sitting there repeatedly hitting the "buy it now" button and then chickening out before I hit confirm. If I hadnt had two kids in college I would have owned that car. But even then you still wouldnt believe it, so whatever. Dont matter, it was probably like that holey Daytona, and would have vaporised like Dracula in the sun if you started rubbing on the paint.

 

Here is a thread from 2004 on inexpensive Lussos, for reference:


http://www.ferrarichat.com/forum/showthread.php?t=26126&highlight=cheap+lusso

 

Because you obviously feel I am being less than honest and for whatever reason are trying to prove me wrong, and because you cant seem to calculate what year it was three years ago, I have nothing left to add to this particular part of the discussion.

 

I paid $27000 for my 330gt series1 in 2004 as a non runner and brought it back to the uk any idea of value now it runs great but is still very tatty.

 

Hi Art,

I don't think Don is saying you are less then honest at all, or even trying to say you were wrong about your memory, but around this time on ebay there were quite a few spectral cars that were priced too good to be true. And if it makes you feel better, though you may have seen a Lusso on ebay for $35,000 it is highly unlikely that there would be that car at the end of your driveway if you pushed the buy it now button, (unless of course it was a really a 280Z under that body).

I walked into Gullwing Motors around then as well and they had a 330GTC in a reddish orange for $59,000. Oh man I thought, problem was Gullwing Motors sells cars that though they look ok are either pulled out of a field or are glorified barn finds so I just didn't trust the car though it looked fine. Well that car and a 330GT with the interior and grill stacked in the cabin they also had were both sold to Heritage Classics. They cleaned the GTC, sold it for $79,000 and sold the 330GT to Tom Shaughnessy to sell the engine off and part out the car. Ah well.

All the best, Yale

 

I am familiar with that case. Here it is:

http://www.lvrj.com/news/9893062.html

They were not found not guilty. The jury hung on the charges. Specifically:

"Cohan was upbeat although his client, Kahre, was not acquitted of any of his 109 charges. Rather, the jury hung on all of Kahre's counts. "

The case will be retried when the government refiles charges.

There was not just one defendant. Before trial, 5 defendants had pleaded guilty. So, there have been convictions in that case.

As you said, they will owe the taxes:

"He conceded at trial that his client may owe federal taxes for her mistakes."

If you Google search on the Kahre case, various groups advocating not paying taxes in various ways view this as some sort of victory. It was not.

He owed taxes and didn't pay them. He will end up paying the taxes and fines. And he will be retried along with his girlfriend, mother, sister and brother and employees who he involved in this scheme. If found guilty, they will serve up to 5 years in prison on each count charged.

 

Thats what I thought too. I went to the Aston Martin dealership of New England the other day to check out a Vantage. "wanna see something cool?" the sales man asks. He brings me out back to their parking garage. There was a MB Gullwing, original Shelby Cobra, 275 GTB and a Lusso. I couldn't believe it when I saw it!!