Tax and Estate Planning for Avid Collectors
Your collection may grow organically, or perhaps you have a specific plan for making acquisitions. Between seeking out items, researching them and connecting with others who share your interest, you’ve likely spent a great deal of time—and probably money—on your collection over the years.
Whether you do it for investment purposes or just for fun, you may have picked out some items that have appreciated in value over time. It’s exciting when that happens, but it can also leave you with a large, unexpected tax bill.
As a result, we believe it’s important to know how to plan for the taxes related to your collection, especially when it comes to your estate plan. From our experience, collectors should understand both capital gains tax and estate tax.
Capital gains tax on collectibles
Let’s say that you picked up an antique roadster a decade or two ago. You love that roadster, and it’s been a joy to drive. It’s also worth a lot more today than when you purchased it. So, if you sell it, you will owe capital gains tax on the profits.
In 2025, the long-term capital gains tax rate on collectibles remains at 28% under federal law. This rate is higher than the long-term capital gains rates on most other investments, such as stocks, which are typically 15% or 20%, depending on your income level.1
If, on the other hand, you’re in a position where some pieces of your collection have decreased in value and will be sold at a capital loss, you can use the losses from the sale of your collection to offset an equal amount of capital gains tax. The key here is that the collectible must be an investment, as opposed to personal use property.
Additionally, you may deduct up to $3,000 of excess capital losses against your ordinary income.2 In this regard, capital losses in your collection are no different from capital losses in your investment portfolio.
Estate tax and your collection
The majority of assets held directly in your name, including your collection, will form part of your taxable estate upon your death. This means that your heirs will inherit your collection with a stepped-up cost basis. If you decide to gift your collection during your lifetime, the cost basis will carry over to the recipient.3
Your estate will owe federal estate tax if its net value exceeds the estate tax exemption in effect at the time of your death. As of 2025, the exemption is $13.61 million per individual.4 However, be aware that the estate tax exemption will revert to pre-2018 levels (roughly $5 million, adjusted for inflation) unless Congress acts and declares otherwise.
Whether or not you have an estate tax issue today, you might in the future as you add to your collection or as the law continues to evolve. This is where annual gifting and other estate planning strategies may be effective in managing tax liabilities.
If you do end up having a taxable estate at your death, then your heirs may need liquidity to pay for any taxes owed on the value of your collection. Estate taxes must be paid within nine months of death, with a maximum possible extension of six months.5 Proper planning now may ensure that your heirs are prepared for this and can avoid any fire sales.
Every collector and their family will have their own income and estate tax planning scenario based on the size and value of their collection, as well as their overall estate. We recommend discussing your collection with your Corient Wealth Advisor and tax professionals to help find the best possible strategy for you and your family.
1 https://www.irs.gov/taxtopics/tc409
2 https://www.irs.gov/taxtopics/tc409
3 https://www.investopedia.com/terms/s/stepupinbasis.asp
4 https://www.irs.gov/businesses/small-businesses-self-employed/estate-tax
5 https://www.irs.gov/businesses/small-businesses-self-employed/frequently-asked-questions-on-estate-taxes#:~:text=If%20the%20estate%20representative%20did,extension%20of%20time%20to%20elect
ABOUT THE AUTHOR
Matt Mignon
Matt is an Associate Partner, Wealth Advisor in our Morristown, NJ, office. He is responsible for managing client relationships and advising families and individuals on financial planning, tax planning and investment management. Matt is a CERTIFIED FINANCIAL PLANNER® professional and Certified Investment Management Analyst® (CIMA). He served on legacy firm RegentAtlantic’s Financial Planning Committee and Neighborhood Nonprofits Group. He also serves on the Morris Museum Board of Trustees. Matt has developed a specialty service to support all aspects of our clients’ collections—from building and cataloging to estate planning and inheriting. Matt graduated from Colby College with a BA in Economics and a concentration in financial markets. Matt also holds a certificate in Financial Planning from Northwestern University.
CONTENT DISCLOSURE
This information is for educational purposes and is not intended to provide, and should not be relied upon for, accounting, legal, tax, insurance, or investment advice. This does not constitute an offer to provide any services, nor a solicitation to purchase securities. The contents are not intended to be advice tailored to any particular person or situation. We believe the information provided is accurate and reliable, but do not warrant it as to completeness or accuracy. This information may include opinions or forecasts, including investment strategies and economic and market conditions; however, there is no guarantee that such opinions or forecasts will prove to be correct, and they also may change without notice. We encourage you to speak with a qualified professional regarding your scenario and the then-current applicable laws and rules.
Different types of investments involve degrees of risk, including the loss of principal. The future performance of any investment or wealth management strategy, including those recommended by us, may not be profitable or suitable or prove successful. Past performance is not indicative of future results. One cannot invest directly in an index or benchmark, and those do not reflect the deduction of various fees that would diminish results. Any index or benchmark performance figures are for comparison purposes only, and client account holdings will not directly correspond to any such data.
Advisory services are offered through Corient Private Wealth LLC and its affiliates, each being a registered investment adviser (“RIA”) regulated by the U.S. Securities and Exchange Commission (“SEC”). The advisory services are only offered in jurisdictions where the RIA is appropriately registered. The use of the term “registered” does not imply any particular level of skill or training and does not imply any approval by the SEC. For a complete discussion of the scope of advisory services offered, fees, and other disclosures, please review the RIA’s Disclosure Brochure (Form ADV Part 2A) and Form CRS, available upon request from the RIA and online at https://adviserinfo.sec.gov/. We also encourage you to review the RIA’s Privacy Policy and Code of Ethics, which are available upon request.
Our clients must, in writing, advise us of personal, financial, or investment objective changes and any restrictions desired on our services so that we may re-evaluate any previous recommendations and adjust our advisory services as needed. For current clients, please advise us immediately if you are not receiving monthly account statements from your custodian. We encourage you to compare your custodial statements to any information we provide to you.
Family office services, such as tax preparation and bill pay services, are exclusively provided by Corient Family Office Services, LLC (“Family Office Services”), an affiliate of CI Financial Corp. and the RIAs. Family Office Services is not a registered investment adviser or accounting firm and does not offer or provide investment or accounting advice or services.
4461513 – May 2025
