The term "collectibles" encompasses every-thing from gems to antiques to ancient coins to dolls to even Beanie Babies.
The cost basis of an item classified as a "collectible" is generally your purchase cost, unless it was an inheritance or gift. If you inherited it or received it as a gift, follow the same rules as you would for a stock.
Depreciation adjustments are not allowed to the cost basis for collectibles.
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Collectibles generally cannot be held inside IRAs, except that the following are allowed:
1. U.S. gold or silver bullion coins minted since October 1986
2. platinum coins
3. platinum bullion
4. palladium bullion
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The main difference in the taxation of collectibles is that the maximum long-term capital gain rate applies (currently 28%), rather than the more favorable long term capital gain rate available for other investment securities.
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Never invest in anything that eats or needs painting.
--Billy Rose
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