If you're going to get all your deductions you have to use schedule C.
A local coin club member since the 60s talked about always insisting on cash and he did big, big transactions over the years. Didn't want a paper trail. I understand the logic, but personally believe that to be unethical, lazy and dishonest. Work in all your deductions which are considerable and you won't have that much of a tax burden. You gotta love those who want to operate as if we were living in Mexico or in a prior century.
@logger7 said:
If you're going to get all your deductions you have to use schedule C.
A local coin club member since the 60s talked about always insisting on cash and he did big, big transactions over the years. Didn't want a paper trail. I understand the logic, but personally believe that to be unethical, lazy and dishonest. Work in all your deductions which are considerable and you won't have that much of a tax burden. You gotta love those who want to operate as if we were living in Mexico or in a prior century.
I have no patience with the people who want to avoid the taxes. It creates a playing field that isn't level and distorts the market.
For most hobbyists, as you say, there is minimal tax burden when handled properly. And if everyone cheats, it just encourages the government to be more intrusive to root out the revenue.
I have recently looked into taxes due on eventual sales and it seems coins held longer than 6 months are taxed at 50% on profits and coins held less than 6 months are taxed at 30% on profits. On top of that there's State taxes due.
You are confusing capital gains with coin sales. If you were running an investment business that invested in coins, MAYBE (ask your tax pro), but as a hobbyist... nope.
-----Burton ANA 50 year/Life Member (now "Emeritus")
"Showing results for coin collectable tax implications
Collectibles are considered alternative investments by the IRS and include things like art, stamps, coins, cards, comics, rare items, antiques, and so on. If collectibles are sold at a gain, you will be subject to a long-term capital gains tax rate of up to 28%, if disposed of after more than one year of ownership."
Interesting, Up to 28% federal tax due is better than 50%
@Mr Lindy said:
I have not sold coins bought over last 4 decades.
I have recently looked into taxes due on eventual sales and it seems coins held longer than 6 months are taxed at 50% on profits and coins held less than 6 months are taxed at 30% on profits. On top of that there's State taxes due.
Am I reading this right ?
No idea where you are getting your information. Short term capital gains are 1 year or less and long term capital gains are longer than 1 year. There is No 30% Federal tax bracket. There is No 50% Federal tax bracket. Collectible assets sold for a profit will either be short term or long term depending on the holding period. Capital gains could be as little as 0% or as much as 28% for anything considered a collectible asset...
@Mr Lindy said:
I have not sold coins bought over last 4 decades.
I have recently looked into taxes due on eventual sales and it seems coins held longer than 6 months are taxed at 50% on profits and coins held less than 6 months are taxed at 30% on profits. On top of that there's State taxes due.
"Showing results for coin collectable tax implications
Collectibles are considered alternative investments by the IRS and include things like art, stamps, coins, cards, comics, rare items, antiques, and so on. If collectibles are sold at a gain, you will be subject to a long-term capital gains tax rate of up to 28%, if disposed of after more than one year of ownership."
Interesting, Up to 28% federal tax due is better than 50%
Google, ‘news’ articles and Internet forums are not your friend when it comes to understanding taxes.
Think of the challenge new coin collectors have when they start and they can’t figure what information is credible. They see something on Etsy or hear a report on the news that some ‘error’ coin sold for big bucks. They come on this forum posting their parking lot find and we all get annoyed. This is the same information challenge you are facing as you try to understand tax implications for the first time.
Read the IRS publications directly on the IRS website. If you don’t understand them or don’t want to read them, consult a professional tax advisor.
The potential consequences of getting taxes wrong are far more serious than errantly posting a parking lot find coin for everyone to laugh at.
A good CPA or Enrolled Agent who understands collectables is worth every penny.
I got a call from a CPA yesterday, one of his clients sold a sports card collection, had no evidence to support purchase price, got audited, IRS Agent disallowed all cost basis, huge proposed assessment.
CPA is preparing for the appeal. CPA, a former IRS Agent, had no idea that price guides for collectables exist. The problem may have been avoided had the CPA known this.
I agree with what others are saying, web board is probably not be a great place to get tax advice. I would also make sure the tax advisor you choose understands collectables.
"Showing results for coin collectable tax implications
Collectibles are considered alternative investments by the IRS and include things like art, stamps, coins, cards, comics, rare items, antiques, and so on. If collectibles are sold at a gain, you will be subject to a long-term capital gains tax rate of up to 28%, if disposed of after more than one year of ownership."
Interesting, Up to 28% federal tax due is better than 50%
Currently LTG rates are dependent upon your income.
For 2023 the rates are.................... The table in the cited article is better.
Filing Status 0% 15% 20%
Single Up to $44,625 $44,626 to $492,300 Over $492,300
Head of household Up to $59,750 $59,751 to $523,050 Over $523,050
Married filing jointly and surviving spouse Up to $89,250 $89,251 to $553,850 Over $553,850
Married filing separately Up to $44,625 $44,626 to $276,900 Over $276,900
There doesn't appear to be any graduated/up to rate for LTG for collectibles.
"Collectibles
Gains on collectibles, including art, antiques, jewelry, precious metals, and stamp collections, are taxed at a 28% rate regardless of your income. Even if you're in a lower bracket than 28%, you'll be levied at this higher tax rate. If you're in a tax bracket with a higher rate, your capital gains taxes will be limited to the 28% rate."
1
@tyler267 said:
A good CPA or Enrolled Agent who understands collectables is worth every penny.
I got a call from a CPA yesterday, one of his clients sold a sports card collection, had no evidence to support purchase price, got audited, IRS Agent disallowed all cost basis, huge proposed assessment.
CPA is preparing for the appeal. CPA, a former IRS Agent, had no idea that price guides for collectables exist. The problem may have been avoided had the CPA known this.
I agree with what others are saying, web board is probably not be a great place to get tax advice. I would also make sure the tax advisor you choose understands collectables.
Even a CPA can't always be relied upon.
Even if you're not a CPA/tax pro, but you've been through it and know the score why would your advice not be sound? Kinda of like your opinion of a coin grade is worth something only if you're a professional grader.
You’ll usually report income from a business, whether operated as a sideline or your main source of income, on Schedule C of your Form 1040. Schedule C has spots for you to record a wide variety of expenses. So you can accurately report the income from your business.
Income from a hobby that you don’t expect to run profitably also has to be reported. But it’s much less involved. You’ll do this on line 8j of Schedule 1 of your regular 1040.
bob
Registry: CC lowballs (boblindstrom), bobinvegas1989@yahoo.com
Nuther question. If you sell a coin to a dealer at a show for say $1500 will the dealer be required to give you a 1099-K on the spot, or at year end or maybe never?
I go to a show and hand a dealer a couple of gold coins and he whips out a wad of Bens and peels off a bunch and done deal.
As a dealer how do you accommodate inventory at tax time if you don't document its existence or have some proof that you paid for it?
Do you write down something like bought 1879-S ms67 Morgan for xxx dollars?
@BAJJERFAN said:
Nuther question. If you sell a coin to a dealer at a show for say $1500 will the dealer be required to give you a 1099-K on the spot, or at year end or maybe never?
As a dealer how do you accommodate inventory at tax time if you don't document its existence?
Do you write down something like bought 1879-S ms67 Morgan for xxx dollars?
I think it depends what the coin is. US coins are legal tender so I believe there are different reporting requirements.
@BAJJERFAN said:
Nuther question. If you sell a coin to a dealer at a show for say $1500 will the dealer be required to give you a 1099-K on the spot, or at year end or maybe never?
As a dealer how do you accommodate inventory at tax time if you don't document its existence?
Do you write down something like bought 1879-S ms67 Morgan for xxx dollars?
I think it depends what the coin is. US coins are legal tender so I believe there are different reporting requirements.
I give you a Morgan and you give me $250 in change? Why should their being legal tender matter?
@BAJJERFAN said:
Nuther question. If you sell a coin to a dealer at a show for say $1500 will the dealer be required to give you a 1099-K on the spot, or at year end or maybe never?
As a dealer how do you accommodate inventory at tax time if you don't document its existence?
Do you write down something like bought 1879-S ms67 Morgan for xxx dollars?
I think it depends what the coin is. US coins are legal tender so I believe there are different reporting requirements.
I give you a Morgan and you give me $250 in change? Why should their being legal tender matter?
Legal tender is irrelevant. But there appears to be an urban legend floating around that there is a difference. I think it's a gun show/doomsday prepper rumor. I've literally had 3 different people walk into a local BM when I was there and ask to buy 90%. When offered other silver options, they insisted on 90% coins because "it's legal tender and not taxable".
@tyler267 said:
A good CPA or Enrolled Agent who understands collectables is worth every penny.
I got a call from a CPA yesterday, one of his clients sold a sports card collection, had no evidence to support purchase price, got audited, IRS Agent disallowed all cost basis, huge proposed assessment.
CPA is preparing for the appeal. CPA, a former IRS Agent, had no idea that price guides for collectables exist. The problem may have been avoided had the CPA known this.
I agree with what others are saying, web board is probably not be a great place to get tax advice. I would also make sure the tax advisor you choose understands collectables.
Even a CPA can't always be relied upon.
Even if you're not a CPA/tax pro, but you've been through it and know the score why would your advice not be sound? Kinda of like your opinion of a coin grade is worth something only if you're a professional grader.
Or it's like doing surgery when you're not a licensed surgeon....
@BAJJERFAN said:
Nuther question. If you sell a coin to a dealer at a show for say $1500 will the dealer be required to give you a 1099-K on the spot, or at year end or maybe never?
As a dealer how do you accommodate inventory at tax time if you don't document its existence?
Do you write down something like bought 1879-S ms67 Morgan for xxx dollars?
I think it depends what the coin is. US coins are legal tender so I believe there are different reporting requirements.
I give you a Morgan and you give me $250 in change? Why should their being legal tender matter?
Dealers are required to file a 1099-B form when a customer sells the minimum quantity of any Precious Metals product that is included on the IRS’s Reportable Items List. Reporting specification varies depending on the specific coin or bullion piece(s) sold. If you have additional questions, please consult a tax professional for details on your specific tax situation.
Everything on their list is foreign bullion and bars except for the US 90% silver face value over $1000, but that's probably because at that point you're talking about $18k+ melt value. AGESs, APEs, and ASEs appear to be exempt.
@BAJJERFAN said:
Nuther question. If you sell a coin to a dealer at a show for say $1500 will the dealer be required to give you a 1099-K on the spot, or at year end or maybe never?
I go to a show and hand a dealer a couple of gold coins and he whips out a wad of Bens and peels off a bunch and done deal.
As a dealer how do you accommodate inventory at tax time if you don't document its existence or have some proof that you paid for it?
Do you write down something like bought 1879-S ms67 Morgan for xxx dollars?
The 1099 reporting requirement with eBay and PayPal etc is a law on payment processors. It doesn't apply to individual retail businesses. NY State and others do have 1099 requirements that apply to businesses.
All 1099s are issued annually.
There is no "dealer". Individual dealers do it differently. Many dealers write out a paper receipt. Other dealers just make notes to themselves. And, of course, some of them are tax cheats abs they create as little paper as possible on both sides of the ledger.
I write out paper receipts with a carbon for my records.
@BAJJERFAN said:
Nuther question. If you sell a coin to a dealer at a show for say $1500 will the dealer be required to give you a 1099-K on the spot, or at year end or maybe never?
As a dealer how do you accommodate inventory at tax time if you don't document its existence?
Do you write down something like bought 1879-S ms67 Morgan for xxx dollars?
I think it depends what the coin is. US coins are legal tender so I believe there are different reporting requirements.
I give you a Morgan and you give me $250 in change? Why should their being legal tender matter?
Legal tender is irrelevant. But there appears to be an urban legend floating around that there is a difference. I think it's a gun show/doomsday prepper rumor. I've literally had 3 different people walk into a local BM when I was there and ask to buy 90%. When offered other silver options, they insisted on 90% coins because "it's legal tender and not taxable".
See my post above. It's a technicality. Taxable vs reportable. And in my state and many others, the sale of US coins is not taxable as in sales tax.
@BAJJERFAN said:
Nuther question. If you sell a coin to a dealer at a show for say $1500 will the dealer be required to give you a 1099-K on the spot, or at year end or maybe never?
As a dealer how do you accommodate inventory at tax time if you don't document its existence?
Do you write down something like bought 1879-S ms67 Morgan for xxx dollars?
I think it depends what the coin is. US coins are legal tender so I believe there are different reporting requirements.
I give you a Morgan and you give me $250 in change? Why should their being legal tender matter?
Legal tender is irrelevant. But there appears to be an urban legend floating around that there is a difference. I think it's a gun show/doomsday prepper rumor. I've literally had 3 different people walk into a local BM when I was there and ask to buy 90%. When offered other silver options, they insisted on 90% coins because "it's legal tender and not taxable".
See my post above. It's a technicality. Taxable vs reportable. And in my state and many others, the sale of US coins is not taxable as in sales tax.
But the profit [if any] from the sale is taxable which is the object of the thread in the beginning.
@BAJJERFAN said:
Nuther question. If you sell a coin to a dealer at a show for say $1500 will the dealer be required to give you a 1099-K on the spot, or at year end or maybe never?
As a dealer how do you accommodate inventory at tax time if you don't document its existence?
Do you write down something like bought 1879-S ms67 Morgan for xxx dollars?
I think it depends what the coin is. US coins are legal tender so I believe there are different reporting requirements.
I give you a Morgan and you give me $250 in change? Why should their being legal tender matter?
Dealers are required to file a 1099-B form when a customer sells the minimum quantity of any Precious Metals product that is included on the IRS’s Reportable Items List. Reporting specification varies depending on the specific coin or bullion piece(s) sold. If you have additional questions, please consult a tax professional for details on your specific tax situation.
Everything on their list is foreign bullion and bars except for the US 90% silver face value over $1000, but that's probably because at that point you're talking about $18k+ melt value. AGESs, APEs, and ASEs appear to be exempt.
But not because they are legal tender. And it doesn't charge the taxability justv the 1099 requirement.
@BAJJERFAN said:
Nuther question. If you sell a coin to a dealer at a show for say $1500 will the dealer be required to give you a 1099-K on the spot, or at year end or maybe never?
As a dealer how do you accommodate inventory at tax time if you don't document its existence?
Do you write down something like bought 1879-S ms67 Morgan for xxx dollars?
I think it depends what the coin is. US coins are legal tender so I believe there are different reporting requirements.
I give you a Morgan and you give me $250 in change? Why should their being legal tender matter?
Legal tender is irrelevant. But there appears to be an urban legend floating around that there is a difference. I think it's a gun show/doomsday prepper rumor. I've literally had 3 different people walk into a local BM when I was there and ask to buy 90%. When offered other silver options, they insisted on 90% coins because "it's legal tender and not taxable".
See my post above. It's a technicality. Taxable vs reportable. And in my state and many others, the sale of US coins is not taxable as in sales tax.
But the profit [if any] from the sale is taxable which is the object of the thread in the beginning.
You asked about 1099's which is how things are reported, not taxed.
@BAJJERFAN said:
Nuther question. If you sell a coin to a dealer at a show for say $1500 will the dealer be required to give you a 1099-K on the spot, or at year end or maybe never?
@BAJJERFAN said:
Nuther question. If you sell a coin to a dealer at a show for say $1500 will the dealer be required to give you a 1099-K on the spot, or at year end or maybe never?
I go to a show and hand a dealer a couple of gold coins and he whips out a wad of Bens and peels off a bunch and done deal.
As a dealer how do you accommodate inventory at tax time if you don't document its existence or have some proof that you paid for it?
Do you write down something like bought 1879-S ms67 Morgan for xxx dollars?
The 1099 reporting requirement with eBay and PayPal etc is a law on payment processors. It doesn't apply to individual retail businesses. NY State and others do have 1099 requirements that apply to businesses.
All 1099s are issued annually.
There is no "dealer". Individual dealers do it differently. Many dealers write out a paper receipt. Other dealers just make notes to themselves. And, of course, some of them are tax cheats abs they create as little paper as possible on both sides of the ledger.
I write out paper receipts with a carbon for my records.
@BAJJERFAN said:
Nuther question. If you sell a coin to a dealer at a show for say $1500 will the dealer be required to give you a 1099-K on the spot, or at year end or maybe never?
As a dealer how do you accommodate inventory at tax time if you don't document its existence?
Do you write down something like bought 1879-S ms67 Morgan for xxx dollars?
I think it depends what the coin is. US coins are legal tender so I believe there are different reporting requirements.
I give you a Morgan and you give me $250 in change? Why should their being legal tender matter?
Legal tender is irrelevant. But there appears to be an urban legend floating around that there is a difference. I think it's a gun show/doomsday prepper rumor. I've literally had 3 different people walk into a local BM when I was there and ask to buy 90%. When offered other silver options, they insisted on 90% coins because "it's legal tender and not taxable".
See my post above. It's a technicality. Taxable vs reportable. And in my state and many others, the sale of US coins is not taxable as in sales tax.
But the profit [if any] from the sale is taxable which is the object of the thread in the beginning.
You asked about 1099's which is how things are reported, not taxed.
@BAJJERFAN said:
Nuther question. If you sell a coin to a dealer at a show for say $1500 will the dealer be required to give you a 1099-K on the spot, or at year end or maybe never?
I'm aware of what the purpose of a 1099 is. Anyway if I was the OP I'd avoid those situations which could result in receiving a 1099.
@BAJJERFAN said:
Nuther question. If you sell a coin to a dealer at a show for say $1500 will the dealer be required to give you a 1099-K on the spot, or at year end or maybe never?
I go to a show and hand a dealer a couple of gold coins and he whips out a wad of Bens and peels off a bunch and done deal.
As a dealer how do you accommodate inventory at tax time if you don't document its existence or have some proof that you paid for it?
Do you write down something like bought 1879-S ms67 Morgan for xxx dollars?
The 1099 reporting requirement with eBay and PayPal etc is a law on payment processors. It doesn't apply to individual retail businesses. NY State and others do have 1099 requirements that apply to businesses.
All 1099s are issued annually.
There is no "dealer". Individual dealers do it differently. Many dealers write out a paper receipt. Other dealers just make notes to themselves. And, of course, some of them are tax cheats abs they create as little paper as possible on both sides of the ledger.
I write out paper receipts with a carbon for my records.
That helps you I suppose. Do you ask for a SSN?
No, not unless it is 1099 reportable.... which will almost always send them to one of the "more lax" dealers.
The 1099k is issued for sales paid by credit/debit cards and third party transmitters, not by dealers or individuals paying by cash or check. The 1099k doesn't make a sale taxable, it just gives the IRS notification of the sale. The IRS computer matches the 1099k with the tax return to make sure the sale was reported. The 1099k doesn't trigger taxes, the profit on the sale triggers taxes. Whether you to comply is up to you, the law is that profits earned on hobby income is taxable. There is some good advice and some really bad advice in this thread, might be best to run the advice by a CPA before you act on it.
I filed Schedule C for years (non-coin business). On any profit after expenses, you paid your normal tax rate, plus another 15.3% in "self-employment tax". That tax corresponds to the 7.65% both you and your employer pay on your wages at work when you're an employee. I'm certainly no tax expert, but I too did sleep at a Holiday Inn one night.
For the non business collectors out there that do this as a hobby and think the $600 reporting threshold is too low, I encourage you to write your two Senators and your Representative and ask them to support the Red Tape Reduction Act which would raise the amount to $10,000.
Remember it is not about profit or loss it's about the reporting threshold. If you bought a coin for $900 and sold for $800 you get to report, regardless, as the online payment system or ebay, Etsy, etc will be sending out 1099K's.
bob
Registry: CC lowballs (boblindstrom), bobinvegas1989@yahoo.com
@AUandAG said:
For the non business collectors out there that do this as a hobby and think the $600 reporting threshold is too low, I encourage you to write your two Senators and your Representative and ask them to support the Red Tape Reduction Act which would raise the amount to $10,000.
Remember it is not about profit or loss it's about the reporting threshold. If you bought a coin for $900 and sold for $800 you get to report, regardless, as the online payment system or ebay, Etsy, etc will be sending out 1099K's.
bob
And if you're writing a letter, also ask your Senators/Reps why we have to buy 3rd party software to prepare our taxes. Ask why the IRS doesn't have their own app yet like every other government agency!
@AUandAG said:
For the non business collectors out there that do this as a hobby and think the $600 reporting threshold is too low, I encourage you to write your two Senators and your Representative and ask them to support the Red Tape Reduction Act which would raise the amount to $10,000.
Remember it is not about profit or loss it's about the reporting threshold. If you bought a coin for $900 and sold for $800 you get to report, regardless, as the online payment system or ebay, Etsy, etc will be sending out 1099K's.
bob
And if you're writing a letter, also ask your Senators/Reps why we have to buy 3rd party software to prepare our taxes. Ask why the IRS doesn't have their own app yet like every other government agency!
The IRS does have a system to file your return for you.If you don't file your 1040 and don't respond to their requests they will use the info they have and file for you. If you want to know more about this read IRC 6020. This is not about coins or taxes on coins so this is all I have to say on this.
@ricko said:
Use best estimate and back it up with research of auction/sales records when you do not have original documentation. Cheers, RickO
Ok that's fine for determining present value but how do you prove what you paid for something 30 years ago with no receipts. I have hundreds if not a thousand coins that I bought starting back in the 1960's that have no purchase records.
Ricko is telling you how to determine cost basis not the present value. This will be subtracted from your sale price (present value) to determine taxable gain.
Repetition of ignorance is ignorance raised to the power two.
@oih82w8 said:
Sidebar question: is the amount the item sells for, or how much you actually receive, minus ebay fees that is subject to reporting to the irs? This is my first year exceeding the $600 in sales.
Full income is first reported to the IRS, then one starts whittling it down with costs/expenses.
Repetition of ignorance is ignorance raised to the power two.
@tommy44 said:
If I'm not mistaken I believe the 1099K shows gross payment to you so that would be the full sales price plus any shipping paid by the seller. You can deduct your cost plus eBay fees plus shipping that you pay. In addition any other costs you might have related to your "business" such as envelops, mailers, ink, toner, labels, etc., etc. would also be deductible.
I believe it also includes any state taxes that ebay collected and paid to a state on your behalf. If correct, this portion of the 1099 gross income is not subject to federal income tax.
Repetition of ignorance is ignorance raised to the power two.
@crazyhounddog said:
Just DONOT sell on eBay. That’s the best advice I can offer you. Try not to leave a money trail.
Happy hunting 😊
there is always a money trail unless a buyer and seller meet and cash is exchanged. Even then a subsequent, large cash deposit to the bank by the seller opens up a money trail.
Repetition of ignorance is ignorance raised to the power two.
Is the IRS monitoring bank accounts? I don't think they are there yet.
with 87,000 new employess, IRS is likely monitoring your forum posts. LOL
Currently, it's voluntary reporting, unless you use one of the third party apps like Venmo or PP (excluding FF) as examples, which very likely will result in receiving a 1099-k.
The requirement for payees to issues 1099K's has been widely expanded to many parties. Keep in mind that reporting of all income on one's tax return is not voluntary, it is required by law. The only thing voluntary is how honest the taxpayer is. The whole purpose of the 1099K is to require that a third party report to the IRS a transfer of money over $600. It forces taxpayers to be forthcoming and honest. Think of the issuer of your 1099 as a tattletale, but only because he is required by law to be one.
Repetition of ignorance is ignorance raised to the power two.
@BAJJERFAN said:
Right now the IRS is very short handed and way behind. If you keep your potential 1099-K small there is very little chance of getting audited. Somehow tho they managed to find that the trust account of which my wife is trustee had overpaid taxes due by $13 and that was from a couple years ago. It turns out another family member paid the $13 also. It took a bit of wrangling, but it finally got straightened out after the IRS told her where the extra $13 came from.
computer programs spit out discrepancies between income reported by the taxpayer and income reported by his 1099K's. While the IRS is shorthanded they eventually get to everything their computer spits out. I got a tax bill (three years later) for a 1099K discrepancy.
Repetition of ignorance is ignorance raised to the power two.
@ms71 said:
I filed Schedule C for years (non-coin business). On any profit after expenses, you paid your normal tax rate, plus another 15.3% in "self-employment tax". That tax corresponds to the 7.65% both you and your employer pay on your wages at work when you're an employee. I'm certainly no tax expert, but I too did sleep at a Holiday Inn one night.
@AUandAG said:
For the non business collectors out there that do this as a hobby and think the $600 reporting threshold is too low, I encourage you to write your two Senators and your Representative and ask them to support the Red Tape Reduction Act which would raise the amount to $10,000.
Remember it is not about profit or loss it's about the reporting threshold. If you bought a coin for $900 and sold for $800 you get to report, regardless, as the online payment system or ebay, Etsy, etc will be sending out 1099K's.
bob
And if you're writing a letter, also ask your Senators/Reps why we have to buy 3rd party software to prepare our taxes. Ask why the IRS doesn't have their own app yet like every other government agency!
They want to, but the TurboTaxes folks are FIGHTING it as you'd expect.
@BAJJERFAN said:
Right now the IRS is very short handed and way behind. If you keep your potential 1099-K small there is very little chance of getting audited. Somehow tho they managed to find that the trust account of which my wife is trustee had overpaid taxes due by $13 and that was from a couple years ago. It turns out another family member paid the $13 also. It took a bit of wrangling, but it finally got straightened out after the IRS told her where the extra $13 came from.
computer programs spit out discrepancies between income reported by the taxpayer and income reported by his 1099K's. While the IRS is shorthanded they eventually get to everything their computer spits out. I got a tax bill (three years later) for a 1099K discrepancy.
According to my accountant the IRS doesn't get around to matching up 1099s with returns until some time in the summer tho you'd hope that they could do it when they process your return. When I first switched to online filing using deceiving Turbo 3 years ago I neglected to include a 1099 which of course carried over to the state return and as of yet neither one has caught it. My accountant advised to do nothing until/unless either of them catch it.
Yet my wife got a notice a couple days ago that her trust was late paying taxes due. The check cleared the bank a week or so after it was mailed so they probably credited it to some other account.
All y'all have no idea of the complexity and scope of the problem the IRS faces with matching up billions of records against millions of individual taxpayers.
I've been in the code. We generated complexity metrics. Nobody wanted to hear the answer, which was that although the subject domain is complex, and the choice of computer language (IBM Assembler) was - by 1990s standards - not the best, the code itself was not absurdly complex.
The bigger problem was the lack of people able to translate the legislative language (Law and Code of Federal Regulations or CFR) into computer codes. That was left to the individual programmers. While not lawyers, they grow quite skilled at (apparently) understanding WFT the law and CFR means.
-----Burton ANA 50 year/Life Member (now "Emeritus")
Note: This post is NOT a political comment but just some facts about politicians and tax policy related to the thread. Read into what you will but it looks like the tax preparation companies & CPA's are just ensuring everyone is playing on the same sheet of music! Campaign contributions are not meant to influence policy - that would be illegal. Campaign contributions are only meant to keep politicians from paying from their own pockets their ability to influence the rest of our lives.
@ProofCollection said:
And if you're writing a letter, also ask your Senators/Reps why we have to buy 3rd party software to prepare our taxes.
Oh, here...I found a couple of answers your questions here!
Oh I agree and understand the obstacles. Tax preparation is such a big industry that any significant reforms will results in lots of lost jobs. Bit in a government that is supposed to by of the people and for the people to serve the people, "the people" are crazy to let things continue the way they are and having an IRS app to file taxes is the tip of that iceberg.
@crazyhounddog said:
Just DONOT sell on eBay. That’s the best advice I can offer you. Try not to leave a money trail.
Happy hunting 😊
there is always a money trail unless a buyer and seller meet and cash is exchanged. Even then a subsequent, large cash deposit to the bank by the seller opens up a money trail.
You must have stayed at a Holiday Inn Express! Lol
Cash or coins are king. Without them we wouldn't have a hobby. So, continue to use good old cash and coins to further our hobby's future, just do the best you can to leave banks, TPP and CC out of the picture.
@tommy44 said:
If I'm not mistaken I believe the 1099K shows gross payment to you so that would be the full sales price plus any shipping paid by the seller. You can deduct your cost plus eBay fees plus shipping that you pay. In addition any other costs you might have related to your "business" such as envelops, mailers, ink, toner, labels, etc., etc. would also be deductible.
I believe it also includes any state taxes that ebay collected and paid to a state on your behalf. If correct, this portion of the 1099 gross income is not subject to federal income tax.
Just checked my 2022 1099K against my spreadsheet records and sales tax collected by eBay is not included in the total. We do pay final value fees on the collected tax but the funds never actually make it to our payment balance.
it's crackers to slip a rozzer the dropsy in snide
@crazyhounddog said:
Just DONOT sell on eBay. That’s the best advice I can offer you. Try not to leave a money trail.
Happy hunting 😊
there is always a money trail unless a buyer and seller meet and cash is exchanged. Even then a subsequent, large cash deposit to the bank by the seller opens up a money trail.
You must have stayed at a Holiday Inn Express! Lol
Cash or coins are king. Without them we wouldn't have a hobby. So, continue to use good old cash and coins to further our hobby's future, just do the best you can to leave banks, TPP and CC out of the picture.
I'm fine with that as long as you honestly report income and pay the taxes.
Needing to pay the extra cost of EVERYTHING I thought eBay would be the way to go to help pay my bills SAID the Little Person trying to survive - And once again the little person is screwed.
"When they can't find anything wrong with you, they create it!"
Comments
You do Not want to file Schedule C Unless you are in business for a profit…
If you're going to get all your deductions you have to use schedule C.
A local coin club member since the 60s talked about always insisting on cash and he did big, big transactions over the years. Didn't want a paper trail. I understand the logic, but personally believe that to be unethical, lazy and dishonest. Work in all your deductions which are considerable and you won't have that much of a tax burden. You gotta love those who want to operate as if we were living in Mexico or in a prior century.
I have no patience with the people who want to avoid the taxes. It creates a playing field that isn't level and distorts the market.
For most hobbyists, as you say, there is minimal tax burden when handled properly. And if everyone cheats, it just encourages the government to be more intrusive to root out the revenue.
I have not sold coins bought over last 4 decades.
I have recently looked into taxes due on eventual sales and it seems coins held longer than 6 months are taxed at 50% on profits and coins held less than 6 months are taxed at 30% on profits. On top of that there's State taxes due.
Am I reading this right ?
You are confusing capital gains with coin sales. If you were running an investment business that invested in coins, MAYBE (ask your tax pro), but as a hobbyist... nope.
ANA 50 year/Life Member (now "Emeritus")
Google search:
"Showing results for coin collectable tax implications
Collectibles are considered alternative investments by the IRS and include things like art, stamps, coins, cards, comics, rare items, antiques, and so on. If collectibles are sold at a gain, you will be subject to a long-term capital gains tax rate of up to 28%, if disposed of after more than one year of ownership."
Interesting, Up to 28% federal tax due is better than 50%
No idea where you are getting your information. Short term capital gains are 1 year or less and long term capital gains are longer than 1 year. There is No 30% Federal tax bracket. There is No 50% Federal tax bracket. Collectible assets sold for a profit will either be short term or long term depending on the holding period. Capital gains could be as little as 0% or as much as 28% for anything considered a collectible asset...
No
Google, ‘news’ articles and Internet forums are not your friend when it comes to understanding taxes.
Think of the challenge new coin collectors have when they start and they can’t figure what information is credible. They see something on Etsy or hear a report on the news that some ‘error’ coin sold for big bucks. They come on this forum posting their parking lot find and we all get annoyed. This is the same information challenge you are facing as you try to understand tax implications for the first time.
Read the IRS publications directly on the IRS website. If you don’t understand them or don’t want to read them, consult a professional tax advisor.
The potential consequences of getting taxes wrong are far more serious than errantly posting a parking lot find coin for everyone to laugh at.
A good CPA or Enrolled Agent who understands collectables is worth every penny.
I got a call from a CPA yesterday, one of his clients sold a sports card collection, had no evidence to support purchase price, got audited, IRS Agent disallowed all cost basis, huge proposed assessment.
CPA is preparing for the appeal. CPA, a former IRS Agent, had no idea that price guides for collectables exist. The problem may have been avoided had the CPA known this.
I agree with what others are saying, web board is probably not be a great place to get tax advice. I would also make sure the tax advisor you choose understands collectables.
Currently LTG rates are dependent upon your income.
https://www.investopedia.com/terms/c/capital_gains_tax.asp#:~:text=Capital gains taxes are owed,High earners pay more.
For 2023 the rates are.................... The table in the cited article is better.
Filing Status 0% 15% 20%
Single Up to $44,625 $44,626 to $492,300 Over $492,300
Head of household Up to $59,750 $59,751 to $523,050 Over $523,050
Married filing jointly and surviving spouse Up to $89,250 $89,251 to $553,850 Over $553,850
Married filing separately Up to $44,625 $44,626 to $276,900 Over $276,900
There doesn't appear to be any graduated/up to rate for LTG for collectibles.
"Collectibles
Gains on collectibles, including art, antiques, jewelry, precious metals, and stamp collections, are taxed at a 28% rate regardless of your income. Even if you're in a lower bracket than 28%, you'll be levied at this higher tax rate. If you're in a tax bracket with a higher rate, your capital gains taxes will be limited to the 28% rate."
1
Even a CPA can't always be relied upon.
Even if you're not a CPA/tax pro, but you've been through it and know the score why would your advice not be sound? Kinda of like your opinion of a coin grade is worth something only if you're a professional grader.
BTW I hope all of those who offer online tax preparation like TurboTax, TaxAct,Taxslayer will be up to date on this crap.
You’ll usually report income from a business, whether operated as a sideline or your main source of income, on Schedule C of your Form 1040. Schedule C has spots for you to record a wide variety of expenses. So you can accurately report the income from your business.
Income from a hobby that you don’t expect to run profitably also has to be reported. But it’s much less involved. You’ll do this on line 8j of Schedule 1 of your regular 1040.
bob
Nuther question. If you sell a coin to a dealer at a show for say $1500 will the dealer be required to give you a 1099-K on the spot, or at year end or maybe never?
I go to a show and hand a dealer a couple of gold coins and he whips out a wad of Bens and peels off a bunch and done deal.
As a dealer how do you accommodate inventory at tax time if you don't document its existence or have some proof that you paid for it?
Do you write down something like bought 1879-S ms67 Morgan for xxx dollars?
I think it depends what the coin is. US coins are legal tender so I believe there are different reporting requirements.
http://ProofCollection.Net
I give you a Morgan and you give me $250 in change? Why should their being legal tender matter?
Legal tender is irrelevant. But there appears to be an urban legend floating around that there is a difference. I think it's a gun show/doomsday prepper rumor. I've literally had 3 different people walk into a local BM when I was there and ask to buy 90%. When offered other silver options, they insisted on 90% coins because "it's legal tender and not taxable".
Or it's like doing surgery when you're not a licensed surgeon....
Well, per APMEX website it matters, although they only have guidance with respect to bullion. I was surprised to see $1000 face value of 90% silver on the list.
https://www.apmex.com/faq/tax-information-on-gold-silver-buying#:~:text=Dealers are required to file,bullion piece(s) sold.
Everything on their list is foreign bullion and bars except for the US 90% silver face value over $1000, but that's probably because at that point you're talking about $18k+ melt value. AGESs, APEs, and ASEs appear to be exempt.
http://ProofCollection.Net
The 1099 reporting requirement with eBay and PayPal etc is a law on payment processors. It doesn't apply to individual retail businesses. NY State and others do have 1099 requirements that apply to businesses.
All 1099s are issued annually.
There is no "dealer". Individual dealers do it differently. Many dealers write out a paper receipt. Other dealers just make notes to themselves. And, of course, some of them are tax cheats abs they create as little paper as possible on both sides of the ledger.
I write out paper receipts with a carbon for my records.
See my post above. It's a technicality. Taxable vs reportable. And in my state and many others, the sale of US coins is not taxable as in sales tax.
http://ProofCollection.Net
But the profit [if any] from the sale is taxable which is the object of the thread in the beginning.
But not because they are legal tender. And it doesn't charge the taxability justv the 1099 requirement.
You asked about 1099's which is how things are reported, not taxed.
http://ProofCollection.Net
That helps you I suppose. Do you ask for a SSN?
I'm aware of what the purpose of a 1099 is. Anyway if I was the OP I'd avoid those situations which could result in receiving a 1099.
No, not unless it is 1099 reportable.... which will almost always send them to one of the "more lax" dealers.
This thread is entertaining. I think most of us prefer not getting 1099’s if we had a choice.
The 1099k is issued for sales paid by credit/debit cards and third party transmitters, not by dealers or individuals paying by cash or check. The 1099k doesn't make a sale taxable, it just gives the IRS notification of the sale. The IRS computer matches the 1099k with the tax return to make sure the sale was reported. The 1099k doesn't trigger taxes, the profit on the sale triggers taxes. Whether you to comply is up to you, the law is that profits earned on hobby income is taxable. There is some good advice and some really bad advice in this thread, might be best to run the advice by a CPA before you act on it.
I filed Schedule C for years (non-coin business). On any profit after expenses, you paid your normal tax rate, plus another 15.3% in "self-employment tax". That tax corresponds to the 7.65% both you and your employer pay on your wages at work when you're an employee. I'm certainly no tax expert, but I too did sleep at a Holiday Inn one night.
Coinlearner, Ahrensdad, Nolawyer, RG, coinlieutenant, Yorkshireman, lordmarcovan, Soldi, masscrew, JimTyler, Relaxn, jclovescoins
Now listen boy, I'm tryin' to teach you sumthin' . . . . that ain't no optical illusion, it only looks like an optical illusion.
My mind reader refuses to charge me....
For the non business collectors out there that do this as a hobby and think the $600 reporting threshold is too low, I encourage you to write your two Senators and your Representative and ask them to support the Red Tape Reduction Act which would raise the amount to $10,000.
Remember it is not about profit or loss it's about the reporting threshold. If you bought a coin for $900 and sold for $800 you get to report, regardless, as the online payment system or ebay, Etsy, etc will be sending out 1099K's.
bob
And if you're writing a letter, also ask your Senators/Reps why we have to buy 3rd party software to prepare our taxes. Ask why the IRS doesn't have their own app yet like every other government agency!
http://ProofCollection.Net
The IRS does have a system to file your return for you.If you don't file your 1040 and don't respond to their requests they will use the info they have and file for you. If you want to know more about this read IRC 6020. This is not about coins or taxes on coins so this is all I have to say on this.
Ricko is telling you how to determine cost basis not the present value. This will be subtracted from your sale price (present value) to determine taxable gain.
Repetition of ignorance is ignorance raised to the power two.
Full income is first reported to the IRS, then one starts whittling it down with costs/expenses.
Repetition of ignorance is ignorance raised to the power two.
I believe it also includes any state taxes that ebay collected and paid to a state on your behalf. If correct, this portion of the 1099 gross income is not subject to federal income tax.
Repetition of ignorance is ignorance raised to the power two.
there is always a money trail unless a buyer and seller meet and cash is exchanged. Even then a subsequent, large cash deposit to the bank by the seller opens up a money trail.
Repetition of ignorance is ignorance raised to the power two.
with 87,000 new employess, IRS is likely monitoring your forum posts. LOL
The requirement for payees to issues 1099K's has been widely expanded to many parties. Keep in mind that reporting of all income on one's tax return is not voluntary, it is required by law. The only thing voluntary is how honest the taxpayer is. The whole purpose of the 1099K is to require that a third party report to the IRS a transfer of money over $600. It forces taxpayers to be forthcoming and honest. Think of the issuer of your 1099 as a tattletale, but only because he is required by law to be one.
Repetition of ignorance is ignorance raised to the power two.
computer programs spit out discrepancies between income reported by the taxpayer and income reported by his 1099K's. While the IRS is shorthanded they eventually get to everything their computer spits out. I got a tax bill (three years later) for a 1099K discrepancy.
Repetition of ignorance is ignorance raised to the power two.
It's Holiday Inn Express if it matters.
They want to, but the TurboTaxes folks are FIGHTING it as you'd expect.
According to my accountant the IRS doesn't get around to matching up 1099s with returns until some time in the summer tho you'd hope that they could do it when they process your return. When I first switched to online filing using deceiving Turbo 3 years ago I neglected to include a 1099 which of course carried over to the state return and as of yet neither one has caught it. My accountant advised to do nothing until/unless either of them catch it.
Yet my wife got a notice a couple days ago that her trust was late paying taxes due. The check cleared the bank a week or so after it was mailed so they probably credited it to some other account.
All y'all have no idea of the complexity and scope of the problem the IRS faces with matching up billions of records against millions of individual taxpayers.
I've been in the code. We generated complexity metrics. Nobody wanted to hear the answer, which was that although the subject domain is complex, and the choice of computer language (IBM Assembler) was - by 1990s standards - not the best, the code itself was not absurdly complex.
The bigger problem was the lack of people able to translate the legislative language (Law and Code of Federal Regulations or CFR) into computer codes. That was left to the individual programmers. While not lawyers, they grow quite skilled at (apparently) understanding WFT the law and CFR means.
ANA 50 year/Life Member (now "Emeritus")
Oh, here...I found a couple of answers your questions here!
https://www.opensecrets.org/orgs/h-r-block/totals?id=D000022016
https://www.opensecrets.org/orgs/intuit-inc/summary?id=D000026667
https://prospect.org/power/2023-03-10-intuit-lobbying-dscc-bundlers/
Note: This post is NOT a political comment but just some facts about politicians and tax policy related to the thread. Read into what you will but it looks like the tax preparation companies & CPA's are just ensuring everyone is playing on the same sheet of music! Campaign contributions are not meant to influence policy - that would be illegal. Campaign contributions are only meant to keep politicians from paying from their own pockets their ability to influence the rest of our lives.
BST references available on request
Oh I agree and understand the obstacles. Tax preparation is such a big industry that any significant reforms will results in lots of lost jobs. Bit in a government that is supposed to by of the people and for the people to serve the people, "the people" are crazy to let things continue the way they are and having an IRS app to file taxes is the tip of that iceberg.
http://ProofCollection.Net
@derryb said:
You must have stayed at a Holiday Inn Express! Lol
Cash or coins are king. Without them we wouldn't have a hobby. So, continue to use good old cash and coins to further our hobby's future, just do the best you can to leave banks, TPP and CC out of the picture.
USAF (Ret.) 1985 - 2005. E-4B Aircraft Maintenance Crew Chief and Contracting Officer.
My current Registry sets:
✓ Everyman Mint State Carson City Morgan Dollars (1878 – 1893)
✓ Everyman Mint State Lincoln Cents (1909 – 1958)
✓ Morgan Dollar GSA Hoard (1878 – 1891)
Just checked my 2022 1099K against my spreadsheet records and sales tax collected by eBay is not included in the total. We do pay final value fees on the collected tax but the funds never actually make it to our payment balance.
it's crackers to slip a rozzer the dropsy in snide
I'm fine with that as long as you honestly report income and pay the taxes.
Needing to pay the extra cost of EVERYTHING I thought eBay would be the way to go to help pay my bills SAID the Little Person trying to survive - And once again the little person is screwed.
"When they can't find anything wrong with you, they create it!"