Since its tax season, what about income tax on coins sold at auction
erwindoc
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What are the tax implications if I sell my collection via a major auction house?
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IRS only wants to know if you made any Profit from your sales. There here on this board but I can’t remember there handle names.
The auction house has to report the net payment they make to you to the IRS. They will send you a 1099. That means you have to report it on your income tax forms, and you should have you cost basis for the coins.
As to how the gains and losses work, talk to your accountant. The IRS is really screwing collectors these days. You can’t off set losses against gains which sucks.
They're giving you your money back. I've never gotten a 1099 from an auction house.
Never mind - repetitive.
Any profit is taxable. Whether the IRS can track it or not is between you, them and God. But if they can track it, they will assume 100% taxable unless you can prove the cost basis. So have all your paperwork.
And for god's sake, consult an accountant not strangers on a coin forum.
What they said
It's been discussed here before. A 1099 is given when someone GIVES you money other than your own such as a dividend. One exception would be withdrawal from a tax deferred account such as an IRA for which you are given a 1099-R. Since the auction house never owns your coins, they have no basis for furnishing you a tax form.
People make money on coin sales?
When did I mention 1099s?
If you are in business.. .no matter what you sell, you should be maintaining records. Those records show whether you have tax responsibility or not. Either way, you are subject to scrutiny - which may or may not occur. The definition of 'business' is provided by the IRS... be aware. Cheers, RickO
Just keep good records, its not hard. Get receipts for all purchases and keep receipts for sales... This is a good place to start....
I did and don't think that the absence of a 1099 is going to let you off the hook. It might be that you will have no gains. If so, you still might have prove it.
You didn't but that's what you'd normally get from an auction house if they reported to the IRS. BTW do you issue 1099s if you buy coins at a show? Or do you give even a receipt?
doesn't matter where you sell coins, income has to be reported. You will report your net income and expenses involved with selling (fees, commissions, mail, etc.). You will also tell them your initial cost (basis). The profit is what will be taxed and it will be at the "collectible" rate. They will need date of purchase and date of sale.
You may or may not get a 1099. A 1099 is the IRS's way of having a third party report your income. You definitely want to file any sales that involve a 1099. Third party also has to send the 1099 to the IRS.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
True, but I was confining my replies to the OP which concerned selling at auction.
I finished my taxes today. I pay WAY more than I ought to, but I pay EVERY cent due.
I have kept meticulous records on coin purchases and sales to keep the goobermint from extracting more taxes than necessary upon sale. For those that don't keep records, you should pay more for your stupidity - in fact you should pay on the full sale amount if you cannot prove purchase price.
Of course, all of you that feel that taxes aren't high enough, please feel free to write a check to the US Treasury for a tidy sum. And please come back to this forum and brag about how you have managed to reduce our national debt from $22 Trillion (mostly from 2008-16) to about $22 trillion. Keep trying harder! I've issued this challenge many times before and exactly zero people have stepped up to the plate!
“In matters of style, swim with the current; in matters of principle, stand like a rock." - Thomas Jefferson
My digital cameo album 1950-64 Cameos - take a look!
I maybe wrong, but I think 1099 s are only for over $600.00 in a year
Yes, I get and give receipts.
They don't need a 1099 to track you. If they audit the auction house, they will be looking at payments (with or without 1099s). If they audit the OP, they may well see the proceeds.
I am not advising anyone to declare or fail to declare their auction sales. As I said to the OP, consult an accountant and make your own decision. But always assume they might find out.
The absence of a 1099 doesn't get you off the hook. It MIGHT make it easier to hide the income from the government. It does not make it legal to do so.
I did my taxes Friday and was happy that I did not have to pay this year. Last year I was not so fortunate.
Good for you! Another beneficiary of tax reform!
“In matters of style, swim with the current; in matters of principle, stand like a rock." - Thomas Jefferson
My digital cameo album 1950-64 Cameos - take a look!
Why would anyone with a brain accept that challenge? The combined 10 richest folks here couldn't even pay enough to cover a fraction of the frivolously wasted money that passes through the Government's coffers in a single day. It's nigh onto impossible to make a difference.
Maybe, but most auction proceeds are probably for more than that.
It's been covered many times.
Gains are gains (short/longterm), losses are losses.
Keep good records.
Bill: Not true you report the sales as a net number on schedule D.I have done it three times in the past.It depends on whether it's a hobby or not.
Kinda OT but not completely. I do my own taxes every year using TurboTax Premium and this year i received a 1099 K from sales through Paypal (only a few grand). TurboTax would not let me enter the 1099 K into my filing saying the IRS does not require it ...problem being is that Massachusetts does require it. It would also not let me edit my MA form to include it because it just takes the info from the Fed form.
Kinda frustrating especially since I had a net loss that offset the whole shebang. I ended up adding a typed addendum to the MA form stating my numbers....
Make money and pay taxes on the profits, minus incurred costs for acquisition. They're simpler than the code And the code is complex.
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I use TurboTax also, and (hopefully) have finished with the IRS on a paypal 1099-K from tax year 2016. Short version, I sell a lot of stuff on ebay, and get a 1099-K, and file it on my taxes on Schedule C as a business, as part of revenue, and deduct costs, etc. and make a good living at it.
The problem is that I have more than 1 ebay account, and one of them is my "garage sale" where I just get rid of stuff laying around the house, and also a lot of stuff that I have inherited. Jewelry, tools, games, etc. are part of the personal stuff that I have sold. Well, in 2016, it was enough on that ebay / paypal account to trigger a 1099-K, and the advice given by a CPA was to ignore it, as there was no "profit" just selling off of personal stuff.
Wrong answer. It was flagged by IRS, and I got a correction letter with a large tax bill, fine, interest, etc. I spoke with the
IRS rep, after waiting almost 5 minutes on the phone, who was pleasant, and he said I needed to fill out a 2nd Schedule C for the garage sale. He suggested that I change the paypal account to reflect my wife's SSN, and use one of her emails for the email of record on paypal, to separate if from my business. Then I should list all the money in as income, and then list the same amount as my costs, as it is either inherited or purchased ourselves, and it is not a money maker but cleaning stuff out. The inherited items he said would have a basis of at least whatever they sold for (no losses). So income and costs balance out, no net tax due. The type of business was described and clearing household items.
I had to refile my 2017 tax forms also. I am waiting on final acceptance of this, so I can file my 2018 forms. The shut down slopped all correspondence and they are now backlogged.
That doesn't make sense. I file every year with Turbo Tax and they take my 1099 K. Hmmmm….
You can file for free from CreditKarma.
even with a Schedule D?
Dunno since I never filed with them, but they keep saying it's free. Sign up and see. Something called Taxact is free also as is IRS efile. Tried TaxAct one year and it wouldn't let me edit anything so I said screw it.
TurboTax also has a free option - but not if you have any Schedule filing to do.
From the CreditKarma site. free to join BTW.
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