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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