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.
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
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.
Never invest in anything that eats or needs painting.