What is happening

1. Collectibles tax rates could be going up substantially in 2013 because the 28% tax rate on gains from the sale of these collectibles could be as high as 33-39.6%.
2. Investment sales, like collectibles, could impact your Alternative Minimum Tax (AMT) exposure, effectively raising taxes on your other income in 2013.
3. In addition, there could be an additional 3.8% tax on their memorabilia sales in 2013 because of a new Medicare surtax beginning in 2013 on investment earnings over $200,000 single and, with a marriage penalty, $250,000 for married couples filing joint tax returns.
4. Even non-collectible investment tax rates are scheduled to rise. Long-term capital gains tax rates could go from 15% to 20% or higher.

Some tips

• Review your investment portfolio for possible tax efficient transactions.  This could mean selling a valuable collectible or other long-term gain investments.
• Consider making tax projections if the sale of investments might expose your income to the two Medicare surtax provisions (.9% of wages and 3.8% of investment income).
• Conversely, if you are an avid collector look for deals in December as other collectors sell their memorabilia to take advantage of the lower tax rates in 2012!