Is buying 2020 Bordeaux stupid? My recent trip to BDX has me tempted

[Blanquito]

Is buying 2020 Bordeaux stupid? My recent trip to BDX has tempted me

I turned 50 this year, I like my claret old and I already have beaucoup wine in the cellar. Yet after our recent chateau visits, I find myself still thinking about the 2020s. We didn’t taste many, only the VCC and Brane Cantenac (which were both powerhouses), but the wine makers were clearly very excited about the vintage. Perusing the notes of the critics, their impressions of 2020 match very well with the small sample we tried: “massive”, “explosive”, “intense”, “inky”, “concentrated”, etc. In the wrong hands, such conditions could be awful but in the right hands you could have something very special (like the 2020 VCC).

So I did some digging last night and nearly pulled the trigger on a mixed case of the following:
2020 Branaire-Ducru $40 (94-96 AG)
2020 Gloria $34 (93-95 NM)
2020 Langoa-Barton $42 (92-94 NM)
2020 Léoville-Barton $80 (94-96 NM)

Advice, gentlemen, advice!

FOMO-ly yours
A wine lover

[Dandersson]

We are wine lovers, nothing is stupid, we are not always meant to be rational. Out of those I would go for the Barton wines.
Even though you would be 70+ when enjoying the Langoa and probably 80 when the Leoville will still be young.

Very impressive trip, enjoyed reading about it.

Best, Dan

[marcs]

Is there truly a quality, a “something” in this vintage that you must have and is not available in other “massive”, “explosive” vintages that are readily available for backfilling such as 2005, 2009, 2010, 2015, 2016, etc.? Perhaps there is, just asking. Or is it more about this great tour/experience and the assumed novelty of the new?

Less expensive but good wines such as Branaire that would not cost as much and probably mature earlier, might be the way to go…

[jal]

I will not enable you Patrick.
The only Bordeaux I am buying now is 70s through 1990. I get very little pleasure from younger Bordeaux.
There are always exceptions; I would buy without hesitations young Lafite and Margaux if the price was right. I feel those will be similar to the old school Lafite and Margaux and therefore worth the wait. I have no interest in anything else.
I succumbed to FOMO and made the mistake of buying some 2018 LLC, I regretted buying those almost immediately after receiving. They just take up premium space and I fear they will not be ready for decades.
Ask yourself when would you drink those 2020 wines, when will the Brane Cantenac and VCC be ready for you? Assume you buy a case of each, when will you open and drink?

[Nicklasss]

Blanquito, i would recommend to buy a few for sure. We're 3 yo appart, and guessing we will still live a minimum of 20 more years. Let's get together in Denver or Montréal when you're 68, and open a few 2020 with our kids.

Personnally, i limited myself to a case up to now, of Chateaux I like. All Left Bank, mainly in Saint-Julien, but a Pauillac that is now on top of it's game, and a Saint-Estèphe that is now making wines that rival Cos and Montrose. So i bought 3 bottles of each of :

Chateau Talbot
Clos du Marquis
Chateau Grand-Puy Lacoste
Chateau Calon Segur (to compare with the 2016 and 2018).

But clearly, i will always buy new vintage Bordeaux, because i think that many Châteaux (not all) on most recent vintages (2009 and on) are drinking very ok even young. And when I'm saying "very ok", i mean complex, fruity, civilized tannins. Of course, at age 15 to 30 they will be more interesting, melted and even more complex, but it is no crime to open Bordeaux from today younger, compare to what i read about 1975 or what i have experienced like 1994 or 2006. I really enjoyed young 2011 like Calong Segur or Clinet, 2016 like Saint-Pierre or La Lagune, that are two very different vintages.

[DavidG]

I bought 2019 Bordeaux, and I’m 15 years older than you.
You’ll be around to enjoy them.

[Blanquito]

Sage input all around. I do think recent bordeaux vintages drink better young, and maybe I’ll appreciate younger wines in my old age like others before me. And Marcus, with a very limited sample, 2020 did seem like it could be special, nearly unique vintage. Better than 05, 09, 10, 16, and 19? Hard to say, but currently the 2019 and 2020 are much cheaper than all of those back vintages (eg the 05 and 09 Branaire consistently go for >$100 at auction these days).

But to Jacques’ points, mature old school bordeaux is the bomb and given the intensity of the 2020 vintage, it seems like it will need a long time to really shine, 20+ years in all likelihood (whereas the 2019s maybe be an earlier drinking year like the 11-14 and 17)

Alex and Ian, did our recent visits give you a useful sense of the possible greatness of the 2020 vintage?

[JoelD]

Is buying 2020 Bordeaux stupid? My recent trip to BDX has tempted me

I turned 50 this year, I like my claret old and I already have beaucoup wine in the cellar. Yet after our recent chateau visits, I find myself still thinking about the 2020s. We didn’t taste many, only the VCC and Brane Cantenac, which were both powerhouses, but the wine makers were clearly very excited about the vintage m. Perusing the notes of the critics, their impressions of 2020 match very well with the small sample we tried: “massive”, “explosive”, “intense”, “inky”, “concentrated”, etc. In the wrong hands, such conditions could be awful but in the right hands you could have something very special (like the 2020 VCC).

I would say it's probably unnecessary to load up, but couldn't hurt to grab a few bottles from producers that you think you would like in these bigger vintages. Worst case, you can likely sell them. 2019 was the first real vintage that I bought on futures. Only a few cases in total. I'm currently holding off on 2020 until I get an overview from a palate I trust like Ian's.

What was the alcohol checking in at on these ones you loved? VCC and Brane for instance?

[DavidG]

Patrick, if you phrase it as a choice between spending a fixed amount on 2020 Bordeaux vs. backfilling with fewer but more mature bottles, the question then becomes how much ready to drink Bordeaux is already in your cellar. If "enough," buy 2020s. If not, backfill.

And remember you can always backfill later down the road, so there is really no wrong decision here.

[OrlandoRobert]

HAHA, you old people are crazy!

[stefan]

Why not cases of each? Try the Gloria and maybe Langoa in 10-15 years and you'll have the age worthy St Juliens to drink during your 70s.

[DavidG]

You youngsters will one day be thankful that some of our well-cellared 2019 and 2020 Bordeaux will eventually be available for your backfilling. So you aren’t stuck with current-release Ovid.

[OrlandoRobert]

You youngsters will one day be thankful that some of our well-cellared 2019 and 2020 Bordeaux will eventually be available for your backfilling. So you aren’t stuck with current-release Ovid.

My law firm handles estate plans as well, and I have been known to serve as Executor. Or is that, Executioner. I get them confused at times.

[marcs]

I'm just going to apply Occam's razor here. Which of these two scenarios seems more likely to you:

--Bordeaux enthusiast who has long proclaimed his undying hostility to young, "big", alcoholic Bordeaux suddenly discovers that the latest vintage of young, "big", alcoholic Bordeaux has unique qualities that he simply MUST have in his collection even if it is against his principles to drink them until he reaches his 70s.

--Bordeaux enthusiast who goes on a spectacular, once in a lifetime trip to Bordeaux full of unique never-thought-I'd-ever-drink-them wines and private tours of the finest chateau decides that he MUST preserve his memories by purchasing some wines from the vintage he tasted on that spectacular trip

With that said, the latter is by no means a bad reason to purchase the 2020s you listed! First, taking a flyer on young Branaire Ducru at $40/bottle is basically never a bad idea. Maybe in 2013, but hard to think of any other case. Second, preserving the memories of a great trip is not a bad reason to purchase wines, it's a great reason! The glow of that trip is a better bet for future pleasure than any amount of critical chin-stroking about a five minute taste of an en primeur sample. Plus, you can drink those wines and remember your trip WAY BEFORE you turn 70! They will remind you of your trip at 5 years old, 10 years old, whenever. In fact, the younger you drink them the closer they will be to the experience of tasting 2020s in the chateau, and the more they will teach you about the life cycle of Bordeaux. So buy away, I say.

[Blanquito]

I'm just going to apply Occam's razor here. Which of these two scenarios seems more likely to you:

--Bordeaux enthusiast who has long proclaimed his undying hostility to young, "big", alcoholic Bordeaux suddenly discovers that the latest vintage of young, "big", alcoholic Bordeaux has unique qualities that he simply MUST have in his collection even if it is against his principles to drink them until he reaches his 70s.

--Bordeaux enthusiast who goes on a spectacular, once in a lifetime trip to Bordeaux full of unique never-thought-I'd-ever-drink-them wines and private tours of the finest chateau decides that he MUST preserve his memories by purchasing some wines from the vintage he tasted on that spectacular trip

With that said, the latter is by no means a bad reason to purchase the 2020s you listed! First, taking a flyer on young Branaire Ducru at $40/bottle is basically never a bad idea. Maybe in 2013, but hard to think of any other case. Second, preserving the memories of a great trip is not a bad reason to purchase wines, it's a great reason! The glow of that trip is a better bet for future pleasure than any amount of critical chin-stroking about a five minute taste of an en primeur sample. Plus, you can drink those wines and remember your trip WAY BEFORE you turn 70! They will remind you of your trip at 5 years old, 10 years old, whenever. In fact, the younger you drink them the closer they will be to the experience of tasting 2020s in the chateau, and the more they will teach you about the life cycle of Bordeaux. So buy away, I say.

I love it! I can buy no matter my reasons!

Can I retain you as counsel, Marcus? You can play both the angel and the demon!

[marcs]

I'm just going to apply Occam's razor here. Which of these two scenarios seems more likely to you:

--Bordeaux enthusiast who has long proclaimed his undying hostility to young, "big", alcoholic Bordeaux suddenly discovers that the latest vintage of young, "big", alcoholic Bordeaux has unique qualities that he simply MUST have in his collection even if it is against his principles to drink them until he reaches his 70s.

--Bordeaux enthusiast who goes on a spectacular, once in a lifetime trip to Bordeaux full of unique never-thought-I'd-ever-drink-them wines and private tours of the finest chateau decides that he MUST preserve his memories by purchasing some wines from the vintage he tasted on that spectacular trip

With that said, the latter is by no means a bad reason to purchase the 2020s you listed! First, taking a flyer on young Branaire Ducru at $40/bottle is basically never a bad idea. Maybe in 2013, but hard to think of any other case. Second, preserving the memories of a great trip is not a bad reason to purchase wines, it's a great reason! The glow of that trip is a better bet for future pleasure than any amount of critical chin-stroking about a five minute taste of an en primeur sample. Plus, you can drink those wines and remember your trip WAY BEFORE you turn 70! They will remind you of your trip at 5 years old, 10 years old, whenever. In fact, the younger you drink them the closer they will be to the experience of tasting 2020s in the chateau, and the more they will teach you about the life cycle of Bordeaux. So buy away, I say.

I love it! I can buy no matter my reasons!

Can I retain you as counsel, Marcus? You can play both the angel and the demon!

I am definitely available for hire as a wine counsel/advisor/enabler! My fee is calculated as a percentage of the *extra* money I persuade you to spend.

[DavidG]

Gotta agree with buying bottles that memorialize a great trip.

[Musigny 151]

I have been backfilling 2019 and bought also some 2020 Cheval.
My rationale is very different from most of you.
1. Inflation is on the rise, and for some reason the huge increase I see in staples at friends restaurants has not shown up in government figures. There is no point in holding onto cash, money rates are laughable, and I have stocks.

I started equating wine as a similar asset to stocks, in other words, I am unlikely to drink the wine, and I am pretty sure I will not be eating stock certificates, then things fell into perspective. Treat wine as an investment.

2. I am 65; I like my Bordeaux with at least twenty five years of age. As I mentioned, apart from the occasional bottle to open to check, I won’t be drinking any.
3. Why 2019 and 2020? They represent an unusual opportunity in the market place. Palmer, one of the first to come out with 2019 primeur prices were offering the wine at $220, the 2020 was $100 more. Compare that with the 0.004% my money guy was offering for short term bonds.
4.Both vintages are strong, and seriously discounted from 2018, and even more weird, the cost of say Cheval is about the same as mediocre older vintages like 2011/2012 and 2013. Partly because the Bordelais who rely on the effusive notes from the wine press had almost no visitors in 2019 and 2020, prices have been relatively reasonable. If I can’t drink them, my son will inherit, along with anything else we have left. I think I have built some margin into the wine should he wish to sell, but better still, I hope he gets to enjoy them.

A final thought. There are some who frown on wine as an investment. I understand their concerns, but I have no compunction about doing so. I know wines, I don’t know stocks, I have plenty to drink, and when I come to sell, the wines will be in professional storage, from the moment they were delivered, and should be immaculate.

[Comte Flaneur]

I started buying a lot more wine for investment purposes in the summer of 2020, given that cash provided a real return of -2%, now-5%. I am reasonably well invested in stocks too. So buying investment grade has been a lot of fun, and the stuff I started buying back then is already up quite a lot, stuff like Latour 05, 10, Lafite 16, 18, Margaux 05, 10, Mouton 09, 10, 16, Haut-Brion 09, Trotanoy 09, Chave 10 and quite a lot of 08 champers - Comtes, Cristal, DP etc…I have where possible bought halves and three packs to give me optionality to drink the stuff should I not need to sell (unlikely).

For the 2020 vintage I bought four or five three packs of Ausone, the insiders tip for wotv, and as much Canon as I could lay my hands on, plus some halves of Pichon Lalande and D’Issan - the latter will be a collectors item with the new varieties in the blend.

But I have much less 2020 than 2019 which is generally regarded as a slightly better vintage than 2020. Also after Alfred T cut his prices by 30% for his 2019 there has been a concerted attempt to ‘normalise’ to 2018 price benchmarks…so if you were thinking of buying 2020 of something why not buy the 2019 at a significantly lower price? However if I was in Patrick’s shoes - he is a good few years younger than me - I would be buying some 2020s for drinking as I did. I went very long on 2016s when I was 54-55.

The 2020 VCC was one of the best young wines I have ever tasted out of barrel - top three. It is also fully priced here in the UK above the price of the 05, 09, 10, 18 and 19. You probably wouldn’t go wrong buying it. You won’t lose money on it, but who knows when it will be ready to drink? And the 2014 is good enough for me - plus all the 98s, 00s, 01s and 04s I have to get through over the next decade or two. The 2020 Brane Cantenac was described by the estate as a vintage of ‘utter concentration’ - it was hard work trying it and I was not entirely convinced by it. I suspect 2020 will be a long lived vintages producing many vins de garde.

[marcs]

One reason I have my doubts about wine investment is the massive transaction costs apparently involved in selling. As I understand it, you are doing very well if you can realize 75% of retail on a sale, and even that might be too high. So you are starting out at least 25% in the hole. That’s not much if you are thinking about the ridiculous 5x type appreciation seen from the 90s to the 2000s for certain celebrated wines, but those days are over I think

[Comte Flaneur]

Btw the VCC 2020 is 14.5% abv, while Brane Cantenac 2020 is 13.7% and Baron De Brane 14.2% (more merlot)

[Blanquito]

My recent checking shows the cost of many/most 2019 and 2020 futures as a wash, at least in the US. There are some outliers of course.

[Musigny 151]

One reason I have my doubts about wine investment is the massive transaction costs apparently involved in selling. As I understand it, you are doing very well if you can realize 75% of retail on a sale, and even that might be too high. So you are starting out at least 25% in the hole. That’s not much if you are thinking about the ridiculous 5x type appreciation seen from the 90s to the 2000s for certain celebrated wines, but those days are over I think

Not quite. Most auction houses offer zero percent once you hit a certain number. Some auction houses pay you part of the buyers commission if you consign with them. I have had as much as 8%. Nowadays, the 75% figure is no longer the case, as auction hammer prices and retail prices get ever closer. Let me take my Cheval 2020 as an example. Cost was $530 including tax, shipping was $6.50 a bottle. Storage $1.85 per bottle per year. My timeline is 20 years minus the two years waiting for it to arrive. Insurance adds another $7, so overall cost is around $577 per bottle assuming storage doesn’t change; it will, so I will bump it up to $600.

Finally, it is not cheap to get a desirable block of wines. 20 cases of Cru Bourgeois will probably lose money, blue chip is the way to go. In other words you need to be prepared to spend a fair amount, and you really do have to know what you are doing. And you are absolutely right, the days of 500% appreciation are gone. This is a steady investment not Bitcoin.

[Blanquito]

Ok, I dipped a toe in 2020 futures, buying 4 of my perennial favorite Branaire Ducru and 6 of the Leoville Barton. Be they for me, my children or resale, it’s a nice memento (kudos to Marcus for the perfect rationale) from a spectacular trip and in particular our lovely and interesting visit with Lilian Barton.

[Dionysus]

Bordeaux 2020 is one I'd approach with caution in the main, for a variety of reasons.

My biggest gripe has to be with the pricing. Particularly at the upper end, some of release prices are bonkers. Haut-Brion, Mouton, Palmer, LLC, VCC, Ducru, Cos, Montrose, all are 30% or more up on the 2019 release prices, a vintage that most appear to think is somewhat superior. Even some of the "lesser" estates have completely lost the run of themselves...Petite Village is up almost 100% on their 2019 release price LeovilleP, LynchB, Clinet all up 30% or more.

Aside from these immediate price increases, it was referenced by OrlandoRobert in the "what you have bought recently thread" that you can get some 05 wines now for the same price of the 16's, 18's, and 20's. 05' Montrose specifically can be purchased for 20/25 dollars more that 20', and roughly the same price as the 2016. The 05' and 10' Trotanoy can be purchased for the same price as the 16', 18' and 20', maybe ever cheaper if one shops around. There are numerous other examples.

The mind boggles...pay now for something that you can drink in 5/10 years, or pay the same amount for something that you shouldn't touch for at least 20 years. If one likes older vintages, why would you take the risk? There has to be question marks on how these "solar" vintages will evolve over time. There's been plenty commentary here, in various threads, on how time in the bottle did little for big, bold and brash Napa Cabs and Australia Shiraz. Ok, the last three Bordeaux Vintage might not be as...voluptuous (being kind) as some Napa Cabs and Aussie Shiraz's from the mid noughties to present day, but they are definitely approaching that mark.

2018 in particular must be a concern in that regard. In both 19' and 20', most estates managed to dial it back somewhat, even though 19' was warmer that 18', by picking slightly earlier, gentler extraction, and using less new oak. But even with these measures, the ABV for some estates are at an all time high. Personal tolerances to ABV will clearly differ.

If it's one or the other though, buying 05', or backfilling in general, has to be the play. You know you've hit a home run before the pitcher has even thrown the ball. While 20' clearly shows a lot of promise, and the pitcher looks confident, there are so many variables at play, so many things that could yet go wrong. And besides, the batter could always keel over before you get to hear the glorious crack, the ball sailing away in the distance.

Of course there are always valid reason to trump the practical...if you have a particular affinity with a chateau, go nuts...to memorialize a special trip, fill your boots, or to commemorate a special event (i.e. birth of a child, anniversary, etc.) Buy Buy Buy. But buy was caution, and selectively!

Conor

[OrlandoRobert]

Bordeaux 2020 is one I'd approach with caution in the main, for a variety of reasons.

My biggest gripe has to be with the pricing. Particularly at the upper end, some of release prices are bonkers. Haut-Brion, Mouton, Palmer, LLC, VCC, Ducru, Cos, Montrose, all are 30% or more up on the 2019 release prices, a vintage that most appear to think is somewhat superior. Even some of the "lesser" estates have completely lost the run of themselves...Petite Village is up almost 100% on their 2019 release price LeovilleP, LynchB, Clinet all up 30% or more.

Aside from these immediate price increases, it was referenced by OrlandoRobert in the "what you have bought recently thread" that you can get some 05 wines now for the same price of the 16's, 18's, and 20's. 05' Montrose specifically can be purchased for 20/25 dollars more that 20', and roughly the same price as the 2016. The 05' and 10' Trotanoy can be purchased for the same price as the 16', 18' and 20', maybe ever cheaper if one shops around. There are numerous other examples.

The mind boggles...pay now for something that you can drink in 5/10 years, or pay the same amount for something that you shouldn't touch for at least 20 years. If one likes older vintages, why would you take the risk? There has to be question marks on how these "solar" vintages will evolve over time. There's been plenty commentary here, in various threads, on how time in the bottle did little for big, bold and brash Napa Cabs and Australia Shiraz. Ok, the last three Bordeaux Vintage might not be as...voluptuous (being kind) as some Napa Cabs and Aussie Shiraz's from the mid noughties to present day, but they are definitely approaching that mark.

2018 in particular must be a concern in that regard. In both 19' and 20', most estates managed to dial it back somewhat, even though 19' was warmer that 18', by picking slightly earlier, gentler extraction, and using less new oak. But even with these measures, the ABV for some estates are at an all time high. Personal tolerances to ABV will clearly differ.

If it's one or the other though, buying 05', or backfilling in general, has to be the play. You know you've hit a home run before the pitcher has even thrown the ball. While 20' clearly shows a lot of promise, and the pitcher looks confident, there are so many variables at play, so many things that could yet go wrong. And besides, the batter could always keel over before you get to hear the glorious crack, the ball sailing away in the distance.

Of course there are always valid reason to trump the practical...if you have a particular affinity with a chateau, go nuts...to memorialize a special trip, fill your boots, or to commemorate a special event (i.e. birth of a child, anniversary, etc.) Buy Buy Buy. But buy was caution, and selectively!

Conor

This brilliant advice should be bookmarked. I concur 100% on all the points. I have generally found 2015 and 2018 too ripe for my palate - and not just in Bordeaux, but even in Rhone, Chinon and Beaujolais - so if anyone says 2019 and 2020 are similar on the ripeness scale, I’d be very hesitant to buy as futures. And at 55, not like I should be taking the plunge anyway. I did buy some 2017s. I’m all about backfilling. Heck, I just bought some 1985 Trotanoy for half of new release price.

[AKR]

My comments

* buying mementos of great trips pays off in the memories that can be enjoyed (again) every time you even look at the bottle. if 2020 vintage lets one revisit festive times with Comte and AlexR, all the better!

* under current code, in the US, the capital gains from trading wines are not reported on a 1099, and assuming you are not in the fine wine business/trade, there's a good case that one doesn't have to voluntarily report either. one would have to believe the wine are personal possessions, NOT capital goods. if one thinks cap gains taxes are going up, this adds a slight edge, and may reduce the transactions costs others mention.

* i have heard that one rationale for buying newer vintages, rather than older ones, is that there is more optionality value in the new ones and they will 'benefit' more from the chateaux pricing strategies going forward. old vintages start to trade more on their intrinsic (drinking) value; the young ones have the speculative option value. of course on the flip side, the chateaux have in many cases, oceans of young wine in their own stocks, that can suppress future price growth. that may not have been true a generation ago, when the price history of old wines was being built.

* there is a book called SWAG, which I suppose some of you have read, which has some rationale for investing in these kinds of tangibles.

* investing in wine is scary. but i have reading about the Hunt Brothers, and am developing a plan to corner the market on cats. maybe I can use eminent domain to seize inventory from crazy cat ladies, further reducing my cost base.

[Blanquito]

Great points, Conor and Bobby, and ones I am normally inclined to make myself (if not so eloquently)…. The top end of Bordeaux pricing has gone bonkers as you detail nicely, and 2020 is the poster child for rampant inflation in claret… but for the mid and lower range (still talking about classified growths here), pricing for the 2020 is effectively flat vis-à-vis the 15-19 vintages (17 excluded) and often substantially cheaper than backfilling the 00, 05, and 09 for example. But the perils of climate changed wines are still valid across the quality spectrum.

I had such a small sample I am loathe to make any general comment about the 2019 and 2020 vintage styles. BUT, neither remind me of 2015 or 2018 — 19 and 20 are less soft and sweet, 2020 is more akin to 2010 probably, FWIW.

[marcs]

Great points, Conor and Bobby, and ones I am normally inclined to make myself (if not so eloquently)…. The top end of Bordeaux pricing has gone bonkers as you detail nicely, and 2020 is the poster child for rampant inflation in claret… but for the mid and lower range (still talking about classified growths here), pricing for the 2020 is effectively flat vis-à-vis the 15-19 vintages (17 excluded) and often substantially cheaper than backfilling the 00, 05, and 09 for example. But all that perils of climate changed wines are valid across the quality spectrum.

I had such a small sample I am loathe to make any general comment about the 2019 and 2020 vintage styles. BUT, neither remind me of 2015 or 2018 — 19 and 20 seem less soft and sweet, 2030 is more akin to 2010 probably, FWIW.

Yes, there is a huge difference in the price patterns relative to backfilling between mid-range classed growths and the top end. What appears to be going on is that the top end have pricing power on new releases and the mid-lower ranges don't. The prices for older mid-range wines increase "naturally" as supply declines, while the top end growths are able to accelerate their new release pricing faster than the decline in supply increase prices for older vintages. So e.g. the 2005 Gruaud Larose is double the price of the 2020 and the 2005 Branaire is almost triple, while the 2005 Palmer is only about 20-25% higher.

[DavidG]

Every accountant I’ve spoken to has told me I have to pay taxes on net gains from selling wine. I’ve never received a 1099 from an auction house but I’ve always reported the gains.

[JoelD]

Every accountant I’ve spoken to has told me I have to pay taxes on net gains from selling wine. I’ve never received a 1099 from an auction house but I’ve always reported the gains.

I've always been told that as well. Do you know if you paid the long term cap gains rate for those wine sales?

[Musigny 151]

Yes, unless you sold the asset within a year, when it would be subject to short term capital gains.

[JoelD]

Yes, unless you sold the asset within a year, when it would be subject to short term capital gains.

Yes, thats what I would have thought. But i've heard from other wine people that for some reason wine is not considered under the normal cap gains rules and you have to pay a higher rate even if long term?

[William P]

I suspect many of us have Sarah Winchester syndrone. For those who don't know the story, Sarah Winchester was the widow of William Winchester owner of Winchester Repeating Arms. After William's death she moved to San Jose and began building a mansion. Somewhere in the early build, ghosts told her if she never stopped building she would never die; 24000 sq. feet and 160 rooms later, she died though she never stopped building.

The moral of the story, if you never stop buying Bordeaux, you may die, but you will die much happier than Sarah.

Bill

[marcs]

BTW the backfilling difference between low-mid level and top level wines is even more pronounced the further back you go. 2000 Branaire Ducru is now four times the price of 2020 Branaire, while the price difference between 2000 Palmer and 2020 Palmer is still just 20-25%.

[Nicklasss]

I suspect many of us have Sarah Winchester syndrone. For those who don't know the story, Sarah Winchester was the widow of William Winchester owner of Winchester Repeating Arms. After William's death she moved to San Jose and began building a mansion. Somewhere in the early build, ghosts told her if she never stopped building she would never die; 24000 sq. feet and 160 rooms later, she died though she never stopped building.

The moral of the story, if you never stop buying Bordeaux, you may die, but you will die much happier than Sarah.

Bill

Very good story and moral Bill.

Our site is Bordeaux Wine Enthusiasts, and it is expected that all members here buy all kind of Bordeaux wines until they die. And from every vintages, every format, any quantity, any level of alcohol, any blending of the recognized 5 red grapes or 4 white grapes, Cru Classé or basic regional Bordeaux AOC... and Jimhow is the best example of that mentality.

Those threads on "should I buy the newest vintage" are so "passé date". If you affirm that you're not at least sampling the newest vintage, there are two possibilities : 1. you're a liar. 2. You're not really a Bordeaux Wine Enthusiast.

[Tom In DC]

Regarding:

Every accountant I’ve spoken to has told me I have to pay taxes on net gains from selling wine. I’ve never received a 1099 from an auction house but I’ve always reported the gains.

I've always been told that as well. Do you know if you paid the long term cap gains rate for those wine sales?

And:

Yes, unless you sold the asset within a year, when it would be subject to short term capital gains.

You actually pay a modified capital gains rate on collectibles (of which wine is one) of 28%. See https://www.irs.gov/taxtopics/tc409 for details.

[DavidG]

Regarding:

Every accountant I’ve spoken to has told me I have to pay taxes on net gains from selling wine. I’ve never received a 1099 from an auction house but I’ve always reported the gains.

I've always been told that as well. Do you know if you paid the long term cap gains rate for those wine sales?

And:

Yes, unless you sold the asset within a year, when it would be subject to short term capital gains.

You actually pay a modified capital gains rate on collectibles (of which wine is one) of 28%. See https://www.irs.gov/taxtopics/tc409 for details.

Yup. Avoiding the tax by investing the proceeds in another collectible (e.g. art or more wine) through a like-kind (1031) exchange used to be possible. That went away for collectibles in 2018 with the TCJA.

In addition, tax treatment of wine as a collectible prohibits a deduction for donating bottles to a charity auction. A deduction for fair market value is only allowed if the collectible is used in connection with the charity's activities (e.g. a non-profit museum which displays donated art). A deduction is not allowed if the charity disposes of it within 3 years of receipt.

I suppose a a deduction could be taken for donating bottles to a non-profit dedicated to disseminating the knowledge of the taste of properly aged Bordeaux, as long as the charity held the bottles for 3 years before opening them for tasting. Jim, you need to file the papers. BWE could have its first such tasting in 2025.

[Musigny 151]

CIA works here. They use them for wine classes