From Yahoo Finance: 2025-04-20 08:30:00

Decades ago, Anna inherited valuable art worth $35,000-$60,000. She’s considering selling it to pay her grandchild’s $80,000 tuition. Options include selling the art and paying taxes, gifting the art to her grandchild to sell, or selling the art and paying tuition directly to avoid gift tax.

Anna is in the 12% tax bracket as a retiree.

Gifting over $18,000 in 2024 may incur federal gift taxes, but there’s a lifetime exemption of $13.61 million. Paying tuition directly is tax-exempt.

When selling the art, Anna may face a 28% capital gains tax on collectibles, but her 12% income tax rate could apply.

Consulting a tax or financial advisor is advised due to the complexity of gift tax, capital gains, artwork valuation, and student aid issues.

Advisors typically charge fees based on assets under management, ranging from 0.59% to 1.18%.

Brandon Renfro, CFP®, answers personal finance and tax questions as a SmartAsset columnist. Email [email protected] for advice.



Read more at Yahoo Finance: How Can I Minimize Taxes When Selling Inherited Artwork to Fund My Grandchild’s Tuition?