Posted by Wradical:You said your friend was in the entertainment industry. Does that mean the guitiars were originally business equipment? If so, he either wrote them off or depreciated them.As such, they would have a zero basis, and the sales price, up to the original cost, or depreciation allowed or allowable, would be a §1245 gain, taxed as ordinary income. Any excess would be capital gain taxed at 15% maximum.Bill,Thank you for your insight! I don't know if he wrote any of his guitars off. I do know that he is a member of ASCAP (American Society of Composers, Authors and Publishers) and has earned some income through music. His primary occupation was acting. I will definately encourage him to research this aspect too! Thank you!
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