Unfortunately, many of the buyers and consignors at these events are unaware of the opportunity afforded to defer Capital Gains on these sales (potentially permanently) through a simple, secure Section 1031 Exchange. When you think of the impact of a 28% tax rate on gains for collectibles, there is a lot of money leaving the vintage automobile space during the course of that week. Reinvesting that money into additional vintage automobiles not only supports secure, hard asset investment strategies (especially during a time of projected inflation), but also has the potential to insulate family wealth for successive generations.
To provide a little more insight on how these transactions work, we have written up a 1031 exchange case study for vintage automobile collectors that is modeled on a series of transactions we'll be handling at one of the sales in Pebble this year.
I will be on the 18th fairway with you, if you happen to make the trip, but please give me a call in advance to discuss your individual circumstances to determine how to structure your 1031 Exchange.