Sale of antique firearm

[Budmeister]

Client sold at auction a  firearm purchased 20 or so years ago. It has grown in value and now faces the gain as a tax issue. Using proseries and if I record the sale on Sch D using code 'C' 'colloctible' -it places the gain all as ordinary income. Searched around because it follows the rules as a long term gain. Not sure a firearm is a 'collectible'  Using code 'C' instead of code'E' long term gain the tax is more than doubled.

Am I wrong to think this is a long term gain?  

[Just-Lisa-Now-]

Hes had it 20 years, its long term for sure.  Whetther that particular gun meets the criteria to be considered a "collectible" Im not sure.

[sjrcpa]

Gain on collectibles is taxed at a maximum rate of 28%. That's probably his ordinary income tax rate, too.

You're looking at it wrong. 

[Budmeister]

Yes you are correct-  but is it a 'collectible'?  If I code it as such proseries auto puts it as ordinary income.

If it is a gain on an asset he has, using codes D-E- F then he can take advatage of the gain tax rates

What makes this particular item a collectible/

Joe

[BobKamman · Accepted solution]

All's I know is what AI tells me.  But this isn't from Bluey, so not CPA-marketed.

Key IRS Tax Classifications

• Antique Firearms: Generally, firearms manufactured in or before 1898 that do not use conventional center-fire or rim-fire fixed ammunition (or for which such ammunition is no longer available) are considered antiques. These are taxed as collectibles.
• Curio and Relic (C&R) Firearms: The ATF defines these as firearms of special interest to collectors, often those 50 years or older. However, the IRS doesnot automatically classify C&R firearms as collectibles; unless they meet the "antique" definition, they are often treated as standard capital assets or hobby items.
• Other Firearms: Standard modern firearms held for personal use or as a hobby are usually not considered collectibles by the IRS.