18 Things Worth Knowing about the Business of Antiques and Collectibles
In case you didn’t know:
* There are more than 41,500 antiques shops/dealers in the U.S.A.. according to the “2008 Business Reference Guide.”
* Many antique shops have sold for 20% of annual sales plus inventory at cost. This is a rule of thumb and not applicable to all antiques shops.
* Most antiques shops are started by collectors.
* U.S. Custom laws define an antique as 100 years old at the date of purchase.
* Many antiques shops really do not sell antiques. Does that make them used-furniture stores?
* An insurance premium paid by an antiques shop is a deductible expense.
* Insurance premiums paid by a collector may be deductible as an investment expense subject to the 2%-reduction rule.
* Insurance premiums paid by a collector may not be added to basis in order to reduce gain on sale or offset insurance proceeds (Midwest floods).
* A buyer’s fee for purchase of an antique is added to the cost of the antique.
* The IRS taxes the gain on the sale of antiques held for one year or more at 28%.
* The IRS taxes the gain on the sale of stocks held for one year or more at 15%.
* Many occasional antiques sellers’ tax bracket is less than 28%.
* Shop layout and good inventory display will help with antiques sales.
* Tasteful signage will bring customers to your antiques shop.
* A “welcome” to each customer who enters your antiques shop will be remembered.
* A “thank you” to each customer who leaves your antiques shop will be remembered.
* Too much attention given a customer may sour a possible sale.
* Too little attention will drive a customer to another antiques shop.
—Jim Sturgill is a director of WorthPoint and founding partner of Sturgill & Associates LLP, a DC and Baltimore area CPA firm.
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