1982 Bordeaux ?

So the question (for myself) is whether to try and sell some of the wine. I still have unopened cases of Lafite and Mouton.

Two questions:

1) What would you do with the proceeds from the sale? Spend it all on different wines, or spend it on something else [like the NYSE/NASDAQ]?

2) If you would spend the proceeds from the sale on different wines, then do you enjoy anything other than Bordeaux?

I probably would not use to buy much in the way of reds...as there is very little these days I like (Bordeaux or CA). Most are overripe, too oaky, and/or too alcoholic. I would buy more German Riesling and/or more CA Chardonnays (such as Stony Hill) and/or White Burgundy. Maybe some Red Burgundy, but probably not. Very expensive and I've not had very good luck in the past with my choices.

BTW. Can anyone reccomend some top-flight CA Cabs or Pinots from old vines that are well under 14% alcohol (and picked at 23 Brix or below). I can't seem to find any.

Of course, where would I sell it? EBAY? Years ago I sold odd lots of older wines that I mostly did not like...to Hi Time (in Costa Mesa). Mostly CA Cabs from the off vintages of the 70's and 80's.

I don't like to ship wines and will not buy (or sell) wines that way. Except for the 82's, most of my Bordeaux was acquired via the Chicago Wine Company. I have relatives in Chicagoland and I would have TCWC hold it for pickup. They would it for up to a year (back then). I also had great luck buying from what was The Belair Wine Merchant (on Santa Monica Blvd). The guy would let me pick through many cases to find old wines with high fills (and with visible sediment). But now that's Twenty/Twenty and they are now VERY EXPENSIVE for almost anything. And then there a little Greek Deli at Pico & Normandy. Chris sold me many wonderful wines (66's & 70's) cheaply...until he sold his entire stock (and all the older wines).

Steve,
I see the "Wine Heretic" sig, but the little "ranking" will change based on posts. Rather tongue-in-cheek (I think!) way to mimic the "rankings" of other boards based on # of posts.

I really liked the '68 BV Reserve a few years ago. I have one bottle of the '60, waiting for my 50th.

Hope your '97 isn't corked! I'm running about 30-40% in the problem years, and don't consider myself very sensitive.

The only obviously corked 97 BV I've had was a bottle of the Clone 4. No bouquet and no flavor. I returned it immediately and they refunded my money...saying "That's the way the wine is". Well I'd never had one like that (from BV).

The 97 is the only BV Reserve I worry about...and I'm careful when I open one to give it my best attention. The last bottle was subdued, but had great fruit. But I'll let you know after I open another one (soon).

Thanks Steve & Bill!

You obviously have consensus on the 59 Montrose which I will try to locate and purchase. Hope its not too expensive!

Thanks Steve & Bill!

You obviously have consensus on the 59 Montrose which I will try to locate and purchase. Hope its not too expensive!

As wonderful as the 59 was, the 61 was younger, sweeter, and more concentrated fruit. You have remember I acquired both of these over 20 years ago (from TCWC) and my storage is colder than most, so the 59 aged more slowly there. It probably would not be in such good shape purchased today (from most sources). The 61 is inherently a longer lived wine. Of course, way back when (1985?), the two wines sold for about the same price (about $80 each).

As wonderful as the 59 was, the 61 was younger, sweeter, and more concentrated fruit. You have remember I acquired both of these over 20 years ago (from TCWC) and my storage is colder than most, so the 59 aged more slowly there. It probably would not be in such good shape purchased today (from most sources). The 61 is inherently a longer lived wine. Of course, way back when (1985?), the two wines sold for about the same price (about $80 each).

Thanks for the clarification, Steve, but I guess you didnt get to read that my motivation for looking for a few bottles from 59 is that was the year I was born.

So much as I believe you that the 61 is a better wine than the 59, I cant change my year of birth!

As wonderful as the 59 was, the 61 was younger, sweeter, and more concentrated fruit. You have remember I acquired both of these over 20 years ago (from TCWC) and my storage is colder than most, so the 59 aged more slowly there. It probably would not be in such good shape purchased today (from most sources). The 61 is inherently a longer lived wine. Of course, way back when (1985?), the two wines sold for about the same price (about $80 each).

Thanks for the clarification, Steve, but I guess you didnt get to read that my motivation for looking for a few bottles from 59 is that was the year I was born.

So much as I believe you that the 61 is a better wine than the 59, I cant change my year of birth!

Lucky you. I was born in 1954 (a rather poor year nearly everywhere). That's why I ended up buying/drinking some 53's and 55's.

One of the popular wine journals at the time was published by Robert Finnegan who disliked the vintage and blasted Parker who loved the vintage. The rest is history...

I didn't realize Finigan had done those things, I wasn't reading him during the 1982 Bordeaux publicity (but before and after).

Below is something I posted online on the wine newsgroup in 1983, before those events. (Original remains public.) At the time and for years before, Finigan was maybe the dominant US newsletter wine critic. Parker was much less established nationally and I didn't mention him. Vintage, the advertising-free wine magazine, ceased in 83. The one well-established newsletter I mistakenly omitted was the California Grapevine (20 years later I apologized online for that to Bob Foster). Remarkably it was still publishing when I last checked, the longest-running US wine newsletter.

Essentially the same set of newsletters was profiled in the newsletters chapter of the massive 1984 UC-Press Book of California Wine. That chapter treated newsletters with good California coverage (precipitating lively discussion of the chapter in the newsletters themselves). It too omitted Parker. Who was being criticized online in the 1980s somewhat by readers, for overlooking California wines, focusing on French. Some of those postings remain public and others, though not public, are archived.


Excerpt from net.wines, 7 Oct 1983:

For CURRENT information on available wines -- prices, characteristics, and trends -- nothing beats the serious (i.e., advertisement-free, subscription only) wine magazines. I am aware of four major ones: Finigan's Private Guide to Wines (rather circumspect and button-down in style); Vintage Magazine; The Underground Wineletter (out of southern California, and a bit more free-wheeling); and Connoisseurs' Guide to California Wine. All of these present tasting notes based on blind tastings, conducted far more professionally (and usually by more-educated palates) than wine reviews that typically appear in local papers, state fairs, etc. Connoisseurs' Guide surveys California wines exclusively, but exhaustively; typically it will provide details and tasting notes on, say, ALL 180 Pinot Noirs currently available from California wineries. Each of these magazines costs around US $25 a year. -- Max Hauser

I have found the 1970 Latour fantastic, but otherwise I'm unimpressed by the vintage. The 1970 Mouton is plagued by extreme bottle variation, and even when 'on' is mediocre in my opinion. Or perhaps I've never had a good bottle of it.

Matt, I have had quite decent bottles of 70 Mouton, but I agree it is hit and miss.

There are other wondeful 1970s though. See my notes at

http://www.wineloverspage.com/user_subm ... /1801.html
http://www.wineloverspage.com/user_subm ... /1813.html
http://www.wineloverspage.com/user_subm ... /1820.html

Bear in mind that with other than perfect cellaring, you won't get the same results as my 10 year old notes indicate, but there are still quite a few very pleasurable 1970s. If you need specific ones, I can check my more recent notes for them.

Nice. Wish I was there...I've not had most of these wines, but have purchased and drunk the Latour (on 3 occasions, with 3 bottles left), the Haut Brion (once, and found it to be very similar to your description), and the La Mission (once, which was one of the better bottles). But of those wines reviewed my favorite is the Palmer, which I feel is the very best Palmer I've had (including the 61 & 66). Of course I only tasted the 61. I opened two of the 66's (that I purchased). The first time I tasted the 70, it was either an off bottle and/or was in shock (for being opened too soon after moving it). But the last two times is showed wonderful weight and depth with that opulent/extended Palmer bouquet. Quite nice with near perfect balance. Long finish, very fine grain tannins. I have 2 bottles left. Latour is also quite nice (and even more concentrated), but not actually at peak yet. I've had both within the past 3 years and the Palmer is classier and ready to drink (though it will hold). Of course, my storage is cold (49-50) and Latour fills are still mid-neck. The 70 Latour rates only (in my book) behind the 61 and 66. Not bad company. But I've never tasted anything older than 55 (which was in poor condition).

I've had many of the other 70's (including Mouton, Lafite, and Leoville)...but not for quite some time. Though they were not bad, I never felt they were great (with Lafite being the best). But I bought the wines Broadbent liked the best and so far they have done well.

And BTW. The only reason I bought a bottle of the Haut Brion, is that I got it cheap ($40 in 1981). I drank in the early 90's.

One of the popular wine journals at the time was published by Robert Finnegan who disliked the vintage and blasted Parker who loved the vintage. The rest is history...

I didn't realize Finigan had done those things, I wasn't reading him during the 1982 Bordeaux publicity (but before and after).

Oh, yes--I remember the controversy well. It happened when I was starting out in exploring the world of wine.

Dissing the 1982 vintage was more or less the end of Mr. Finnegan's reputation as a wine guru. There were too many wet-behind-the-ears critics (including the esteemed Mr. Parker) shouting the praises of 1982 Bordeaux for a seasoned voice, expressing rational caution, to win out. The Parker faction won out, at least in the 1980s and 90s. My own experience, and the tasting notes that started off this discussion, seem to indicate that some unsavory chickens may be coming home to roost.

I highly advise anyone who thinks 1982 is the greatest ever Bordeaux vintage to read the story of Abe's sardines in the book "Anatomy of the Wine Trade: Abe's Sardines and Other Stories" by Simon Loftus and Jancis Robinson.

The anecdote of Abe's Sardines, IMO, summarizes the 1982 vintage very aptly. The Bordelais, who have always been masters of vintage hype, latched onto young, starry-eyed Robert Parker and rode him for all he was worth, and then some. Having nailed his underpants to the mast, Parker couldn't back off from his ill-advised effusive praise even if he wanted to.

A member of the wine trade whose palate and opinions I have nothing but utmost respect for offered this very non-politically correct evaluation of the 1982 Bordeaux vintage: they're like the easygoing high school girl with the big bust, but if you marry her, you find out that by age 30 her tits are hanging around her waist, and she's got a moustache.

That certainly describes my flirtation with the 1982 Mouton-Rothschild.

I had a lot of fun with other 1982s before their tits sagged.

The 1982 Pichon-Lalande is, in my experience, a great wine, and not just a cheap young whore.

A few things are absolutely certain:

The Bordelais REALLY, REALLY were desperately in need of a great vintage in 1982. Aside from 1961, the 1960s, 1970s, and--it seemed at the time--1980s, offered some spectacularly crappy vintages. 1963, 1965--arguably one of the WORST vintages of all time, along with 1968. 1971-1974 weren't actually poisonous. 1979, 1980, 1981 were mediocre. Bordeaux REALLY NEEDED 1982 to be great. Then came 1982--the vintage so ripe they didn't know how to deal with it. Then along came Robert Parker--the lover of overripe wines, and just pleased as pink that he finally had barrel tasting access to these great estates. So at the same time the experienced Bordeaux experts were saying, 'Hey--I've never seen anything like this before. Looks good over the short term, but let's be careful out there", you had Parker and his US Yuppie lemmings (and I was in that crowd at that time) handing out 90+ and 100 point scores as if they were candy.

I've since tasted great 1929s, 1961s, and 1970s from Bordeaux. In vertical tasting with 1982s.

GUYS--THE 1982 EMPEROR AIN'T GOT NO CLOTHES ON.

Sorry to point out Abe's Sardines for what they are, but they smell, no matter how highly praised by some critics.

As always, there are a few exceptions, but in general the 1982 Bordeaux vintage is past its prime and going downhill fast. This was NOT a great vintage. It was a very fine vintage of wines extremely enjoyable over the near and mid-term, but in general, this vintage's days have come and gone.

1982 is perhaps the best vintage of Californicated wines that Bordeaux has yet produced. And yes, I mean that entirely pejoratively.

California used to ape Bordeaux. Since 1982 Bordeaux is apeing California. Perhaps this is an effect of global warming. But California does the cheap whoring much better--and much cheaper. Bordeaux should have stuck to its forte--real elegance.

These days Bordeaux is both cheap and expensive at the same time, if you get my meaning.

BAH.

-Paul W.

One of the popular wine journals at the time was published by Robert Finnegan who disliked the vintage and blasted Parker who loved the vintage. The rest is history...

I didn't realize Finigan had done those things, I wasn't reading him during the 1982 Bordeaux publicity (but before and after).

Oh, yes--I remember the controversy well. It happened when I was starting out in exploring the world of wine.

Dissing the 1982 vintage was more or less the end of Mr. Finnegan's reputation as a wine guru. There were too many wet-behind-the-ears critics (including the esteemed Mr. Parker) shouting the praises of 1982 Bordeaux for a seasoned voice, expressing rational caution, to win out. The Parker faction won out, at least in the 1980s and 90s. My own experience, and the tasting notes that started off this discussion, seem to indicate that some unsavory chickens may be coming home to roost.

I highly advise anyone who thinks 1982 is the greatest ever Bordeaux vintage to read the story of Abe's sardines in the book "Anatomy of the Wine Trade: Abe's Sardines and Other Stories" by Simon Loftus and Jancis Robinson.

The anecdote of Abe's Sardines, IMO, summarizes the 1982 vintage very aptly. The Bordelais, who have always been masters of vintage hype, latched onto young, starry-eyed Robert Parker and rode him for all he was worth, and then some. Having nailed his underpants to the mast, Parker couldn't back off from his ill-advised effusive praise even if he wanted to.

A member of the wine trade whose palate and opinions I have nothing but utmost respect for offered this very non-politically correct evaluation of the 1982 Bordeaux vintage: they're like the easygoing high school girl with the big bust, but if you marry her, you find out that by age 30 her tits are hanging around her waist, and she's got a moustache.

That certainly describes my flirtation with the 1982 Mouton-Rothschild.

I had a lot of fun with other 1982s before their tits sagged.

The 1982 Pichon-Lalande is, in my experience, a great wine, and not just a cheap young whore.

A few things are absolutely certain:

The Bordelais REALLY, REALLY were desperately in need of a great vintage in 1982. Aside from 1961, the 1960s, 1970s, and--it seemed at the time--1980s, offered some spectacularly crappy vintages. 1963, 1965--arguably one of the WORST vintages of all time, along with 1968. 1971-1974 weren't actually poisonous. 1979, 1980, 1981 were mediocre. Bordeaux REALLY NEEDED 1982 to be great. Then came 1982--the vintage so ripe they didn't know how to deal with it. Then along came Robert Parker--the lover of overripe wines, and just pleased as pink that he finally had barrel tasting access to these great estates. So at the same time the experienced Bordeaux experts were saying, 'Hey--I've never seen anything like this before. Looks good over the short term, but let's be careful out there", you had Parker and his US Yuppie lemmings (and I was in that crowd at that time) handing out 90+ and 100 point scores as if they were candy.

I've since tasted great 1929s, 1961s, and 1970s from Bordeaux. In vertical tasting with 1982s.

GUYS--THE 1982 EMPEROR AIN'T GOT NO CLOTHES ON.

Sorry to point out Abe's Sardines for what they are, but they smell, no matter how highly praised by some critics.

As always, there are a few exceptions, but in general the 1982 Bordeaux vintage is past its prime and going downhill fast. This was NOT a great vintage. It was a very fine vintage of wines extremely enjoyable over the near and mid-term, but in general, this vintage's days have come and gone.

1982 is perhaps the best vintage of Californicated wines that Bordeaux has yet produced. And yes, I mean that entirely pejoratively.

California used to ape Bordeaux. Since 1982 Bordeaux is apeing California. Perhaps this is an effect of global warming. But California does the cheap whoring much better--and much cheaper. Bordeaux should have stuck to its forte--real elegance.

These days Bordeaux is both cheap and expensive at the same time, if you get my meaning.

BAH.

-Paul W.

You could very well be right. And so far, the wines are following my most negative projections (based on first tasting them in 1985). But considering how long they held (after being opened on Friday) and how much fruit these over-the-hill wines showed...I have elements of doubt. Even now, the Ausone (though not as good as it was on Monday) showed pretty well last night. The main flaw is not the lack of fruit. All 10 wines had lots of fruit. But they also had even more oak...sitting heavy on top. But then, that's Parker's other great love. OAK. Mountains of TOASTY OAK.

But I'm going to see what I could get for 1/2 or perhaps even 2/3 of what I have. But assuming I can a good price, what would I buy? Overripeness, alcohol, and oak are nearly omni-present (thanks to Parker & Company). Even newer Ports are being over-oaked. Only German and Alsace seem to be immune.

Recently opened/tasted the 2005 J.J. Prum Graacher Auslese. Really nice. Better even than the 90! Perhaps I'll stock on 2005 Germans...

[David M. Bueker]

Steve,

1954 was good for one thing - I've had a couple of really nice 1954 Colheita Ports.

As for stocking up on 2005 Germans - too late as I bought all of htem.

As for stocking up on 2005 Germans - too late as I bought all of htem.

So THAT'S where they all got to!

At least they went to a good cause.

Regards,

-Paul W.

$42 for Lafite

I still have unopened cases of Lafite and Mouton.

I probably would not use to buy much in the way of reds...as there is very little these days I like (Bordeaux or CA). Most are overripe, too oaky, and/or too alcoholic. I would buy more German Riesling and/or more CA Chardonnays (such as Stony Hill) and/or White Burgundy. Maybe some Red Burgundy, but probably not. Very expensive and I've not had very good luck in the past with my choices.

That's exactly what I was thinking - get out of red, and into white, in a big way.

German & Austrian Riesling, Austrian Grüner Veltliner, maybe some Loires & a Sauternes or two - that's where you're gonna find your best drinking.

[Although I'd be very, very careful about large white burgundy purchases - that thread now has sixty PAGES of replies, most of which are exceedingly verbose, dense, dour, and very pessimistic. See also here.]

Anyway, Wine-Searcher Pro indicates that the current market rate for 1982 Lafite is at least $2000 per bottle, and Acker just got $2541 a few weeks ago:

http://www.wine-searcher.com/prof/index.lml

http://www.ackerwines.com/archives/searchform.cfm

New York : 9/28/07
1386 Chateau Lafite Rothschild - Vintage 1982
Pauillac
10 bottles $25,410.00

Now if you're trying to move a pile of expensive wine, and get into something different, and if you intend to do it "by the book", then your biggest problem will be the Capital Gains Tax.

[Me personally - I'd be inclined to tell the IRS to go f*** itself - but I'm well aware that most people won't adopt my point of view.]

Anyway, you indicated that e.g. you purchased Lafite at $42, so if you could get Acker's price of $2541 per bottle, then your Cap Gains on a case would be:

Code: Select all

     Sold: 12 X $2541 = $30492
Purchased: 12 X $42   = $504
-------------------------------
            Difference: $29988
     15% Capital Gains: $4498.20

I.e. you're looking at about $4500 in Cap Gains per case [which, of course, is just insane].

But with that in mind, if you still want to get out of wine, and into cash [and pay the Cap Gains tax along the way], then you'll have to enter into a sale of wine.

Three thoughts there:

1) Paradoxically, your stash is too precious to sell on Wine Commune - with such valuable bottles, the working assumption will be that they're counterfeit, which will drive the price way down. [Also, note that the IRS & the BATF have been monitoring Wine Commune for a few years now, so the loot isn't as clean as it used to be - a $30,000 sale of Lafite would definitely cause the little lights on their monitoring screens to start blinking.]

2) Moving wine is just an INCREDIBLE HASSLE - cataloguing it and packing it up securely so that it won't break is a PITA like you can't imagine [unless you've done it before]. It's possible that for big ticket items like this [i.e. pristine cases of 1982 First Growths], the larger houses [Acker, Zachy's, Sotheby's, Hart Davis Hart, Christie's, etc] might send someone to your home to move it for you, but it is a big, tedious, time-consuming chore, and it is not fun. [Also, note that the "OWC's" - the "Original Wooden Cases" - add value to your stash, so that if some wine movers were to come to your home, and rip open the OWC's, and pack everything into styrofoam, and discard the OWC's, then already you would've lost value before you'd even rounded first base.] The good news, though, is that the weather is finally cooling down, and we are about to enter prime wine-shipping season.

3) Everyone wants a cut of the action: In addition to the IRS wanting the Cap Gains, there will be the cost of transporting the wine, and the auction house will want an insurance fee, and most auction houses will want both a seller's & a buyer's commission [Acker only charges a buyer's commission, but it's largely a cosmetic difference], and then there will be the possibility of NY State sales tax, and NY City sales tax, and blah blah blah yada yada yada almost forever. So remember that any vision of the $30,000 Golden Goose Egg must be tempered by the realization that there is a small army of blood-sucking zombies out there ready & willing to separate you from your wallet.


Now let me make a disclaimer: I AM NOT A CERTIFIED PUBLIC ACCOUNTANT, NOR AM I TAX LAWYER*.

But with that as a proviso, there's a different possibility, which is an old accounting gimmick which is usually called something along the lines of "like-kind trade of assets".

The basic idea behind "like-kind" is that the government can only tax you if you convert a piece of capital into US currency - if the capital isn't converted into the intermediate commodity of US currency, then, from the point of view of tax law, no commerce has taken place, and there is no commercial transaction which can be taxed.

There are some gotchas here, though - for instance, apparently you can't make a "like-kind" trade of residential property for rental property [apparently the courts have ruled that the two are not "like" in "kind"], so you need to be careful how you go about this.

But the most obvious way to make a "like-kind" trade here is simply to go to someone and trade wine for wine.

For instance, 2001 d'Yquem [which everyone says is the greatest thing since sliced bread] is now selling for about $500 per bottle, so if you knew a big Bordeaux shop, with a lot of 2001 d'Yquem on hand, and a desire to replenish their stock of 1982 First Growths, then you could trade one bottle of 1982 Lafite for four or five bottles of 2001 d'Yquem, and there wouldn't be any tax consequences at all.

Me personally, I'd go straight to DeeVine, and trade for as many of those Balz TBA's as I could get my grubby little paws on:

http://www.dvw.com/balz.html

One other thought - if you trade wine for an "In-Store Credit", i.e. if there's even a temporary detour of "Wine -> $$$'s -> Wine", then it's possible that an enterprising young district attorney might consider that to be a commercial transaction, and demand Cap Gains, and Sales Tax, and blah blah blah whatever.

Also, you might want to think about the ABC regulations in your state - in some states, trades of wine might be illegal - but I think that most people just go ahead and do it under the table, and don't bother to inform the ABC about it [and, in general, as long as it keeps getting its tax revenues, the state really doesn't care where the wine came from - i.e. they won't care whether it's a sale of four bottles of 2001 d'Yquem or one bottle of 1982 Lafite which is generating the sales tax revenue, as long as they keep getting theirs].

Let me close with two final thoughts:

1) If I were a professional criminal, and if I saw this thread, and if I could find your home address in the phone book, or by googling, then I would give some pretty serious thought to staking out your house for a day or two [watching your comings and your goings] - the thinking being that five or ten minutes alone on your property [with nothing more than a crowbar] could net me a good $50,000 or $75,000, which would be virtually untraceable [cf Season 6, Episode 74, "The Ride"]. So at some point, if the wine you're sitting on gets to be too valuable, then you're going to have to upgrade your home security system.

2) Again, technically speaking, in most jurisdictions you're probably "required" to pay property tax on a stash like this, which is yet another reason not to go around advertising the fact that you're sitting on it [although cf telling the tax collector to go f*** himself, as above].



*Actually, there is a member of this forum who is an expert in these matters; I'll try to bump her to this thread.

Paul,
I'd certainly never call the '82s the greatest vintage ever. But I'd disagree that the better wines are going downhill. Even the Gloria was doing pretty well couple weeks ago. And bigger wines all seem to get better through night after being decanted in AM- doesn't sound like fading to me.

Steve,
auction houses do I believe furnish 1099s for large transactions. But its worse than Nathan says, as wine does NOT qualify for capital gains rate. On other hand you could add in cost for storage, etc. But trading has its advantages.

Steve,
auction houses do I believe furnish 1099s for large transactions. But its worse than Nathan says, as wine does NOT qualify for capital gains rate. On other hand you could add in cost for storage, etc. But trading has its advantages.

Best of all, Steve could make a charitable donation of them to us, whereupon he could write off their fair market value on his taxes and we could drink them -- a win-win all the way around!

Steve, you can thank me later

Mark Lipton

But its worse than Nathan says, as wine does NOT qualify for capital gains rate. On other hand you could add in cost for storage, etc. But trading has its advantages.

Get outta here.

How do they figure that it's not "capital" - i.e. how does a $2500 bottle of Lafite differ from a $2500 acre of swampland in Florida?

I believe it is classified as a collectible, sales of which are taxed at a 25% rate (unless that rate has changed since I last prepared a return with a collectibles sale on it).

But its worse than Nathan says, as wine does NOT qualify for capital gains rate. On other hand you could add in cost for storage, etc. But trading has its advantages.

Get outta here.

How do they figure that it's not "capital" - i.e. how does a $2500 bottle of Lafite differ from a $2500 acre of swampland in Florida?

Investments in alcoholic beverages fall into a separate category in the income tax laws. Income from the profit of sales of alcoholic beverages are taxed at normal income rates, not the lower capital gain rates. This exception exists to plug up a "tax loophole" involving buying shares in warehoused whiskey while it's aging. I don't recall the details of how that tax shelter worked. But one of the unfortunate results of plugging that loophole is that profits from the sale of wine don't count as capital gains.

-Paul W.

So...is this what it looks like when I hear about 'topic drift'?

$42 for Lafite

I still have unopened cases of Lafite and Mouton.

I probably would not use to buy much in the way of reds...as there is very little these days I like (Bordeaux or CA). Most are overripe, too oaky, and/or too alcoholic. I would buy more German Riesling and/or more CA Chardonnays (such as Stony Hill) and/or White Burgundy. Maybe some Red Burgundy, but probably not. Very expensive and I've not had very good luck in the past with my choices.

That's exactly what I was thinking - get out of red, and into white, in a big way.

German & Austrian Riesling, Austrian Grüner Veltliner, maybe some Loires & a Sauternes or two - that's where you're gonna find your best drinking.

[Although I'd be very, very careful about large white burgundy purchases - that thread now has sixty PAGES of replies, most of which are exceedingly verbose, dense, dour, and very pessimistic. See also here.]

Anyway, Wine-Searcher Pro indicates that the current market rate for 1982 Lafite is at least $2000 per bottle, and Acker just got $2541 a few weeks ago:

http://www.wine-searcher.com/prof/index.lml

http://www.ackerwines.com/archives/searchform.cfm

New York : 9/28/07
1386 Chateau Lafite Rothschild - Vintage 1982
Pauillac
10 bottles $25,410.00

Now if you're trying to move a pile of expensive wine, and get into something different, and if you intend to do it "by the book", then your biggest problem will be the Capital Gains Tax.

[Me personally - I'd be inclined to tell the IRS to go f*** itself - but I'm well aware that most people won't adopt my point of view.]

Anyway, you indicated that e.g. you purchased Lafite at $42, so if you could get Acker's price of $2541 per bottle, then your Cap Gains on a case would be:

Code: Select all

     Sold: 12 X $2541 = $30492
Purchased: 12 X $42   = $504
-------------------------------
            Difference: $29988
     15% Capital Gains: $4498.20

I.e. you're looking at about $4500 in Cap Gains per case [which, of course, is just insane].

But with that in mind, if you still want to get out of wine, and into cash [and pay the Cap Gains tax along the way], then you'll have to enter into a sale of wine.

Three thoughts there:

1) Paradoxically, your stash is too precious to sell on Wine Commune - with such valuable bottles, the working assumption will be that they're counterfeit, which will drive the price way down. [Also, note that the IRS & the BATF have been monitoring Wine Commune for a few years now, so the loot isn't as clean as it used to be - a $30,000 sale of Lafite would definitely cause the little lights on their monitoring screens to start blinking.]

2) Moving wine is just an INCREDIBLE HASSLE - cataloguing it and packing it up securely so that it won't break is a PITA like you can't imagine [unless you've done it before]. It's possible that for big ticket items like this [i.e. pristine cases of 1982 First Growths], the larger houses [Acker, Zachy's, Sotheby's, Hart Davis Hart, Christie's, etc] might send someone to your home to move it for you, but it is a big, tedious, time-consuming chore, and it is not fun. [Also, note that the "OWC's" - the "Original Wooden Cases" - add value to your stash, so that if some wine movers were to come to your home, and rip open the OWC's, and pack everything into styrofoam, and discard the OWC's, then already you would've lost value before you'd even rounded first base.] The good news, though, is that the weather is finally cooling down, and we are about to enter prime wine-shipping season.

3) Everyone wants a cut of the action: In addition to the IRS wanting the Cap Gains, there will be the cost of transporting the wine, and the auction house will want an insurance fee, and most auction houses will want both a seller's & a buyer's commission [Acker only charges a buyer's commission, but it's largely a cosmetic difference], and then there will be the possibility of NY State sales tax, and NY City sales tax, and blah blah blah yada yada yada almost forever. So remember that any vision of the $30,000 Golden Goose Egg must be tempered by the realization that there is a small army of blood-sucking zombies out there ready & willing to separate you from your wallet.


Now let me make a disclaimer: I AM NOT A CERTIFIED PUBLIC ACCOUNTANT, NOR AM I TAX LAWYER*.

But with that as a proviso, there's a different possibility, which is an old accounting gimmick which is usually called something along the lines of "like-kind trade of assets".

The basic idea behind "like-kind" is that the government can only tax you if you convert a piece of capital into US currency - if the capital isn't converted into the intermediate commodity of US currency, then, from the point of view of tax law, no commerce has taken place, and there is no commercial transaction which can be taxed.

There are some gotchas here, though - for instance, apparently you can't make a "like-kind" trade of residential property for rental property [apparently the courts have ruled that the two are not "like" in "kind"], so you need to be careful how you go about this.

But the most obvious way to make a "like-kind" trade here is simply to go to someone and trade wine for wine.

For instance, 2001 d'Yquem [which everyone says is the greatest thing since sliced bread] is now selling for about $500 per bottle, so if you knew a big Bordeaux shop, with a lot of 2001 d'Yquem on hand, and a desire to replenish their stock of 1982 First Growths, then you could trade one bottle of 1982 Lafite for four or five bottles of 2001 d'Yquem, and there wouldn't be any tax consequences at all.

Me personally, I'd go straight to DeeVine, and trade for as many of those Balz TBA's as I could get my grubby little paws on:

http://www.dvw.com/balz.html

One other thought - if you trade wine for an "In-Store Credit", i.e. if there's even a temporary detour of "Wine -> $$$'s -> Wine", then it's possible that an enterprising young district attorney might consider that to be a commercial transaction, and demand Cap Gains, and Sales Tax, and blah blah blah whatever.

Also, you might want to think about the ABC regulations in your state - in some states, trades of wine might be illegal - but I think that most people just go ahead and do it under the table, and don't bother to inform the ABC about it [and, in general, as long as it keeps getting its tax revenues, the state really doesn't care where the wine came from - i.e. they won't care whether it's a sale of four bottles of 2001 d'Yquem or one bottle of 1982 Lafite which is generating the sales tax revenue, as long as they keep getting theirs].

Let me close with two final thoughts:

1) If I were a professional criminal, and if I saw this thread, and if I could find your home address in the phone book, or by googling, then I would give some pretty serious thought to staking out your house for a day or two [watching your comings and your goings] - the thinking being that five or ten minutes alone on your property [with nothing more than a crowbar] could net me a good $50,000 or $75,000, which would be virtually untraceable [cf Season 6, Episode 74, "The Ride"]. So at some point, if the wine you're sitting on gets to be too valuable, then you're going to have to upgrade your home security system.

2) Again, technically speaking, in most jurisdictions you're probably "required" to pay property tax on a stash like this, which is yet another reason not to go around advertising the fact that you're sitting on it [although cf telling the tax collector to go f*** himself, as above].

*Actually, there is a member of this forum who is an expert in these matters; I'll try to bump her to this thread.

Lots of good information Nathan. Thanks.

But just for the record, the 82's are not at my house...well maybe one bottle of the 82 Lafite...but that's about it.

And trading would be great...at least for some of the wine. Perferably the open cases. But I will check into what's involved in going through an auction house...but one near by (so I don't have to ship). I believe there are places in SF or Napa I could deal with.

Steve,

1954 was good for one thing - I've had a couple of really nice 1954 Colheita Ports.

As for stocking up on 2005 Germans - too late as I bought all of htem.

I never found any of the 54 Ports (locally) and I don't like to ship. Even so, the prices I did see where high relatively to my understanding of the quality. Buying 53's and 55's seemed a better bet.

And I still know someone who can get me some 2005 German. Generally from less popular producers that I like...such as Dr. Fischer. Best (ripe) vintages of his Ockfener Bockstein ages far better than anything from Prum.

I bought a fair amount of 82 Bordeaux "back in the day" and have not regretted it. That said I am down to my last couple of bottles. I have been drinking them both from my cellar and from other peoples several times a year for a long time now.

The oak levels vary from wine to wine, but seem mostly normal for Bordeaux. The fruit level has always been strong. That said, IMHO most of the wines have peaked, although many will have a long and graceful old age. I don't think 82 is a long distance runner in the manner of the better 61, 66 and 75 (and 86?) Bordeaux, but I still think it was a superb vintage.

But its worse than Nathan says, as wine does NOT qualify for capital gains rate. On other hand you could add in cost for storage, etc. But trading has its advantages.

Get outta here.

How do they figure that it's not "capital" - i.e. how does a $2500 bottle of Lafite differ from a $2500 acre of swampland in Florida?

Investments in alcoholic beverages fall into a separate category in the income tax laws. Income from the profit of sales of alcoholic beverages are taxed at normal income rates, not the lower capital gain rates. This exception exists to plug up a "tax loophole" involving buying shares in warehoused whiskey while it's aging. I don't recall the details of how that tax shelter worked. But one of the unfortunate results of plugging that loophole is that profits from the sale of wine don't count as capital gains.

-Paul W.

Oh well. Still worth checking into. Thanks.

I bought a fair amount of 82 Bordeaux "back in the day" and have not regretted it. That said I am down to my last couple of bottles. I have been drinking them both from my cellar and from other peoples several times a year for a long time now.

The oak levels vary from wine to wine, but seem mostly normal for Bordeaux. The fruit level has always been strong. That said, IMHO most of the wines have peaked, although many will have a long and graceful old age. I don't think 82 is a long distance runner in the manner of the better 61, 66 and 75 (and 86?) Bordeaux, but I still think it was a superb vintage.

Well I guess I should have monitored them more closely and/or drank them faster. But I said earlier I'll bring up another round (of all 10) and give me a more thorough examination. But since I'm NOT a fan of excessive oak, I'll probably try and get rid of most of them. However, my current income does not really allow for donating much (and getting full value for donating than a bottle or two).