Les Jones: Tax Question (Paging SayUncle)

April 18, 2004

News > Tax Question (Paging SayUncle)

Jack Bog analyzed Bush and Cheney's tax returns. Now he has an analysis of Kerry's tax return.

One item on Kerry's return is from the sale of a piece of art. It was originally purchased in 1996 for $1 million, and sold in 2003 for $1.35 million. Kerry owned half of it. From the analysis:

Kerry's accountants miscalculated the tax on the gain on the sale of the painting. It should have been taxed at 28 percent, instead of the 20 percent rate that they used. Kerry has already filed an amended return and paid another $11,577 in tax to clean up this blooper, for a revised federal tax bill (before foreign tax credit) of $102,236.

The capital gains tax is 15%, right? Someone tell me why the profits from the sale should be taxed at 28%. I'm not arguing with it. I just want to know what type of income this falls under, and/or what are the rules concerning taxes on capital gains.

Posted by lesjones

Comments

It used to be simple -- capital gain or not. Now it's more complicated -- there are different kinds of capital gain, some more favorable than others. I think Kerry's art falls into the category of "colletibles," which gets less advantageous tax treatment than, say, stocks.

Posted by: Jack Bog at April 18, 2004

Er, that's "collectibles."

Posted by: Jack Bog at April 18, 2004

Last time i did serious taxes was in about 1998 and if i recall it was 28% max. But it has become rather complicated to keep accountants in business i guess.

And the good ol' IRS offers guidance here:

http://www.irs.gov/newsroom/article/0,,id=106799,00.html

I'm more a systems/finance guy and not a tax guy mostly because taxes depress me.

Posted by: SayUncle at April 19, 2004

Ah, I figured someone would know. Thanks.

Uncle: Sorry about that. All you accountants look the same to me.

Posted by: Les Jones at April 19, 2004