@JBK said:
Registered/licensed dealers presumably get to deduct their expenses, such as table cost, transportation and lodging, meals, spot remover for mustard stains, etc.
Hobbyists, I believe, do not.
Now where was that level playing field....
There is no such thing as "registration" or "licensing" for a coin dealer. You say you are a dealer, you're a dealer.
You can get a tax ID from your state for free online in seconds.
As long as you have the tax id active check your state rules and if required, DO NOT FORGET to file your quarterly tax returns, even if it's $0. The penalty in Texas is $50, even if you have no sales. That stings.
We've had several threads on the dealer vs. hobbyist - the last one I participated in was over basis cost. But that's between you and the IRS.
I keep waiting for the state audit. Since ebay started collecting the sales tax for me, if I don't do a show I often have to file $0. It makes me suspicious of myself. Lol
Hobbyists can deduct costs of operation just like anyone else, the difference is that hobbyists are not allowed to generate net operating losses. I say this having just hung up my CPA certificate after 42 years, but still being a licensed attorney able to practice before the IRS, so not just random opinion.
Yup, but since you can just electronically file in about 60 seconds in Texas, and they remind you there really is no reason not to be in compliance. I have never reported any sales in Texas as I either sell through EBay or to Texas citizens, who are not taxed on numismatic coins or bullion -- but for some odd reason are on collectable currency that I don't handle.
Though we have no sales taxes on precious metals or coins in CT, I have a sales tax license that I file for another business that does have a sales and use tax liability, while many don't file for contractor sales tax.
There was/is a NY dealer coming over to set up at CT shows, pretty much requiring cash on transactions and "all sales final". If he were filing honestly on taxes he'd be paying a lot more as he's a school teacher. There are a lot of people like this who game the system, schmooze and charm anyone who could be a problem for them and get angry and belligerent if they get reported.
Sounds to me like they don't know you and don't want you crashing their little party. God forbid you sell some things less than the other dealers and they too might have to adjust their prices down. Find another show that's more interested in coins and expanding the hobby rather than a closed door club.
To answer your question, I've been going to coin shows for 50 years and I don't know if it's the norm. But why would larger shows be any more likely to be protective of their dealers' competitive advantage than smaller shows?
Exactly. Why would any show in ANY STATE WITH NO SALES TAX ON COINS, push the little guy/collector out? For the show, it's table revenue. For other dealers, it's a chance to cherry-pick a newbie. For customers, it's more inventory to peruse - a bigger/better marketplace.
I was expecting input such as:
"This is my livelihood, and there needs to be certain rules and procedures in place to protect those of us who do this for a living."
or ...
Shows are among the last surviving "retail sales" venues for numismatics, we do not need nor want collectors selling with no regard to margins, markets, or profit.
or ...
"We are professionals, it takes work and years of experience - you collectors all think you can just show up and sell coins."
I was not expecting the State and Federal tax tangents ...
If we were all the same, the world would be an incredibly boring place.
To answer your question, I've been going to coin shows for 50 years and I don't know if it's the norm. But why would larger shows be any more likely to be protective of their dealers' competitive advantage than smaller shows?
Exactly. Why would any show in ANY STATE WITH NO SALES TAX ON COINS, push the little guy/collector out? For the show, it's table revenue. For other dealers, it's a chance to cherry-pick a newbie. For customers, it's more inventory to peruse - a bigger/better marketplace.
I was expecting input such as:
"This is my livelihood, and there needs to be certain rules and procedures in place to protect those of us who do this for a living."
or ...
Shows are among the last surviving "retail sales" venues for numismatics, we do not need nor want collectors selling with no regard to margins, markets, or profit.
or ...
"We are professionals, it takes work and years of experience - you collectors all think you can just show up and sell coins."
I was not expecting the State and Federal tax tangents ...
Show promoters can get into deep trouble if they accept dealers who don't have tax IDs. Dealers who wholesale material to people who don't supply resale certificates are at risk. If you get audited for sales taxes as a dealer and don't have sales invoices and documentation, you can have big problems.
There was a well known dealer who set up at a New Jersey show years ago. He wasn't collecting sales tax, and from I have heard had not done so for a repeated shows. The New Jersey tax people came in, shut down his table and put crime tape around it. That is not good for anybody's business, including the other dealers at the show.
Of course a lot of this goes away for states that have exempted coins from sales tax.
So far as dealers belly aching about "collectors selling at lower prices," tough luck. If the collector really is undercutting them, they are either not making good deals when they buy, their prices are too high or the collector will be out of business because he won't be able to replenish his inventory at the low prices.
Retired dealer and avid collector of U.S. type coins, 19th century presidential campaign medalets and selected medals. In recent years I have been working on a set of British coins - at least one coin from each king or queen who issued pieces that are collectible. I am also collecting at least one coin for each Roman emperor from Julius Caesar to ... ?
There's a lot of history to unpack. Well before internet auctions, dealers almost exclusively could source inventory from public auctions. It wasn't that the collectors were not welcome to participate, but the big companies required burdensome references to get catalogue and bid sheets (for fax/mail bids) or bidder cards (for the floor). Nowadays, there is no division of opportunity. Brick and mortars have advantages in getting fresh material from the public though.
So it is difficult to get much of margin in coins. The collectors often know the sources and price histories of offered coins and too often fail to consider the opportunity costs and overhead. There is a natural and justified issue with collector sellers.
If everyone played by the rules, it would be a little different. Tax-wise, the collector is strongly disadvantaged in trying to make a profit. But we suspect few ever declare their sales and profits. Dealers, otoh, are not uniformly ethical in collecting and paying retail sales taxes and we can be sure that more than a few misrepresent the numbers for cash transactions. But assuming everything is kosher, the dealer has the advantage of writing off expenses (travel, bourse table fees, meals, insurance, ...). This and the taxation difference on income are reasons a liquidating collector might seriously consider a business license and tax certificate. My other suggestion is to not get a table the first show or few. Team up with a trusted dealer and do a case at his/her booth(s).
As for show organizers, they need to stay in the good graces of their city and state governments and tax authorities. While coins might not be taxable, medals and things like books often still are. No sales tax states are different of course.
As others have pointed out, it is exceedingly difficult to make an honest profit in coins for many dealers these days. Some have the mindset and personality to always do fine, but that is certainly not the rule. So there is always going to be some bad blood for a non-dealer setting up shop at a show with no skin in the game apart from a table fee.
Do any of you understand Section 1031 like kind exchanges, and that they apply to investors in coins (i.e non-dealers). You have 45 days to buy the replacement coins.
You cannot interchange some things like gold bullion, silver bullion, or cryptocurrency. And it has to be truly like kind, that is no coins for stamps, they are not considered like kind. There are specific revenue rulings on these issues.
But all numismatic coins are in the same class of exchange otherwise. This is a significant way for collectors to avoid taxes and then if they leave the coins to their heirs directly they get a stepped up basis so can sell with no tax consequences. If your tax attorney hasn't mentioned this then you need a new one. This is not individual advice, but information from a tax attorney to let you look into the issue.
@Liquidated said: @jmlanzaf
I do have better things to do such as get back to work and pay taxes so that you can play on messages boards all day.
Dang.
Your charm and wit will be missed.
Keep in mind most of the world has priorities such family, friends, and employment. There is much more than spending all day on 2-3 chat boards sucking the time away. Wouldn’t trade places with you for anything. You and Joseph will need to move onto the next guy to get off on. Enjoy!
@Liquidated said: @jmlanzaf
I do have better things to do such as get back to work and pay taxes so that you can play on messages boards all day.
Dang.
Your charm and wit will be missed.
Keep in mind most of the world has priorities such family, friends, and employment. There is much more than spending all day on 2-3 chat boards sucking the time away. Wouldn’t trade places with you for anything. You and Joseph will need to move onto the next guy to get off on. Enjoy!
I can't miss you until you actually leave.
But I really have no interest in your leaving. I don't understand why you got so mad. But I can really ignore any anger, insults or self-aggrandizement that you wish to display. So, hang around, relax, enjoy the hobby.
And don't forget to pay your taxes on any profits!
Comments
Hobbyists can deduct costs of operation just like anyone else, the difference is that hobbyists are not allowed to generate net operating losses. I say this having just hung up my CPA certificate after 42 years, but still being a licensed attorney able to practice before the IRS, so not just random opinion.
Yup, but since you can just electronically file in about 60 seconds in Texas, and they remind you there really is no reason not to be in compliance. I have never reported any sales in Texas as I either sell through EBay or to Texas citizens, who are not taxed on numismatic coins or bullion -- but for some odd reason are on collectable currency that I don't handle.
Though we have no sales taxes on precious metals or coins in CT, I have a sales tax license that I file for another business that does have a sales and use tax liability, while many don't file for contractor sales tax.
There was/is a NY dealer coming over to set up at CT shows, pretty much requiring cash on transactions and "all sales final". If he were filing honestly on taxes he'd be paying a lot more as he's a school teacher. There are a lot of people like this who game the system, schmooze and charm anyone who could be a problem for them and get angry and belligerent if they get reported.
Sounds to me like they don't know you and don't want you crashing their little party. God forbid you sell some things less than the other dealers and they too might have to adjust their prices down. Find another show that's more interested in coins and expanding the hobby rather than a closed door club.
Exactly. Why would any show in ANY STATE WITH NO SALES TAX ON COINS, push the little guy/collector out? For the show, it's table revenue. For other dealers, it's a chance to cherry-pick a newbie. For customers, it's more inventory to peruse - a bigger/better marketplace.
I was expecting input such as:
"This is my livelihood, and there needs to be certain rules and procedures in place to protect those of us who do this for a living."
or ...
Shows are among the last surviving "retail sales" venues for numismatics, we do not need nor want collectors selling with no regard to margins, markets, or profit.
or ...
"We are professionals, it takes work and years of experience - you collectors all think you can just show up and sell coins."
I was not expecting the State and Federal tax tangents ...
If we were all the same, the world would be an incredibly boring place.
Tommy
Not a tangent.
Show promoters can get into deep trouble if they accept dealers who don't have tax IDs. Dealers who wholesale material to people who don't supply resale certificates are at risk. If you get audited for sales taxes as a dealer and don't have sales invoices and documentation, you can have big problems.
There was a well known dealer who set up at a New Jersey show years ago. He wasn't collecting sales tax, and from I have heard had not done so for a repeated shows. The New Jersey tax people came in, shut down his table and put crime tape around it. That is not good for anybody's business, including the other dealers at the show.
Of course a lot of this goes away for states that have exempted coins from sales tax.
So far as dealers belly aching about "collectors selling at lower prices," tough luck. If the collector really is undercutting them, they are either not making good deals when they buy, their prices are too high or the collector will be out of business because he won't be able to replenish his inventory at the low prices.
There's a lot of history to unpack. Well before internet auctions, dealers almost exclusively could source inventory from public auctions. It wasn't that the collectors were not welcome to participate, but the big companies required burdensome references to get catalogue and bid sheets (for fax/mail bids) or bidder cards (for the floor). Nowadays, there is no division of opportunity. Brick and mortars have advantages in getting fresh material from the public though.
So it is difficult to get much of margin in coins. The collectors often know the sources and price histories of offered coins and too often fail to consider the opportunity costs and overhead. There is a natural and justified issue with collector sellers.
If everyone played by the rules, it would be a little different. Tax-wise, the collector is strongly disadvantaged in trying to make a profit. But we suspect few ever declare their sales and profits. Dealers, otoh, are not uniformly ethical in collecting and paying retail sales taxes and we can be sure that more than a few misrepresent the numbers for cash transactions. But assuming everything is kosher, the dealer has the advantage of writing off expenses (travel, bourse table fees, meals, insurance, ...). This and the taxation difference on income are reasons a liquidating collector might seriously consider a business license and tax certificate. My other suggestion is to not get a table the first show or few. Team up with a trusted dealer and do a case at his/her booth(s).
As for show organizers, they need to stay in the good graces of their city and state governments and tax authorities. While coins might not be taxable, medals and things like books often still are. No sales tax states are different of course.
As others have pointed out, it is exceedingly difficult to make an honest profit in coins for many dealers these days. Some have the mindset and personality to always do fine, but that is certainly not the rule. So there is always going to be some bad blood for a non-dealer setting up shop at a show with no skin in the game apart from a table fee.
Tax avoidance is your duty. If it isn’t on a W2, it didn’t happen.
I ain’t paying the irs a cent because I sold my used toaster at a yard sale.
Tax avoidance isn't cheating the IRS, but fellow taxpayers. A used toaster is one thing; a pricey coin is quite another.
Tax avoidance is different than tax evasion. And unless you turned a profit on the used toaster, you wouldn't owe anyone anything.
Why do people continue to misunderstand the idea of INCOME tax?
You can also sell your entire coin collection at a loss and not owe any taxes. You should give it away for free. That would also be tax free.
Do any of you understand Section 1031 like kind exchanges, and that they apply to investors in coins (i.e non-dealers). You have 45 days to buy the replacement coins.
You cannot interchange some things like gold bullion, silver bullion, or cryptocurrency. And it has to be truly like kind, that is no coins for stamps, they are not considered like kind. There are specific revenue rulings on these issues.
But all numismatic coins are in the same class of exchange otherwise. This is a significant way for collectors to avoid taxes and then if they leave the coins to their heirs directly they get a stepped up basis so can sell with no tax consequences. If your tax attorney hasn't mentioned this then you need a new one. This is not individual advice, but information from a tax attorney to let you look into the issue.
Keep in mind most of the world has priorities such family, friends, and employment. There is much more than spending all day on 2-3 chat boards sucking the time away. Wouldn’t trade places with you for anything. You and Joseph will need to move onto the next guy to get off on. Enjoy!
I can't miss you until you actually leave.
But I really have no interest in your leaving. I don't understand why you got so mad. But I can really ignore any anger, insults or self-aggrandizement that you wish to display. So, hang around, relax, enjoy the hobby.
And don't forget to pay your taxes on any profits!