From 24/7 Wall St. · Gerelyn Terzo · · 1m 40s
Dinosaur Auction Tax Puzzle
A Montana rancher's $6-9m dinosaur sale could trigger Social Security tax penalties without counting against his earnings test.
In brief
A Montana rancher's $6-9m dinosaur sale could trigger Social Security tax penalties without counting against his earnings test. A 64-year-old Montana rancher may face Social Security tax penalties if his dinosaur fossil sale counts as income rather than capital gains. Originally reported by 24/7 Wall St..
Dinosaur Skeleton Up for Auction
A nearly 20-foot predator nicknamed Jodi for the rancher who discovered it in Montana goes up for sale at Sotheby's New York on October 27 with an estimated price tag of $6 million to $9…
Retired Rancher Faces Tax Puzzle
A 64-year-old Montana landowner who started Social Security early and then finds a skeleton weathering out of a hillside his family has owned for decades suddenly faces a tax puzzle that could reshape his Social…
Social Security Earnings Test
Retirees who claim before full retirement age face an earnings test where Social Security withholds $1 for every $2 earned above $24,480 in 2026.
Capital Asset vs. Business Income
A sale of genuine personal property counts as capital gains, not business income, unless the seller runs a fossil business with regular sales.
Tax Implications for Fossil Sale
A single $24,000 Social Security check could become taxable if the fossil sale counts as income, triggering up to 85% of benefits being taxed.
How the Sale Affects Social Security
The IRS may classify the fossil as capital gains, but a single sale does not settle the classification and could still trigger tax penalties.
What Happens Next
The rancher must consult a tax professional to determine if the fossil sale counts as income or capital gains before the auction.
The bottom line
A 64-year-old Montana rancher may face Social Security tax penalties if his dinosaur fossil sale counts as income rather than capital gains.
