Tax question when selling coins...

DAM · July 31, 2003 5:29AM

Is there ever a taxable event (Federal, State, or Local) when selling a coin(s)? If so, when does it happen? Does it depend on your State of residence, for state tax?

I would assume a collection abtained through inheritance would be taxable through the estate. How about a gain from a sale, after inheritance tax had been paid.

Thanks,

Dan

jom · July 31, 2003 5:35AM

Income taxes:

If you are in business, buying and selling probably go thru Schedule C

If you are "investing" it will be Schedule D but you don't get the great Long term gains you do with stocks. I think collectable are taxed at 25%.

You have the sales taxes also to be concerned with....

jom

theboz11 · July 31, 2003 6:08AM

A collection obtained through an inheritance has the VALUE set upon the death of the passing the coins on to the inheritor. The difference in sale price and appraised value at death is all that is reported. If this occured recently there is probably no tax consequence.

fishcooker · July 31, 2003 6:19AM

If you sell certain bullion coins, a dealer buying them *must* file a Form 1099 with the IRS. American eagles do not fall under this requirement!

jom · July 31, 2003 6:21AM

<< a dealer buying them *must* file a Form 1099 with the IRS. >>

Isn't that only when the purchase is greater than $10,000?

jom

theboz11 · July 31, 2003 6:23AM

Jom, not positive but I think the limit is $2000

topstuf · July 31, 2003 6:24AM

Dealer does not have to report onesie twosie sales.

It's 25 coins in a 24 hour period...............UNLESS..............dlr has reason to BELIEVE you are spreading them out to avoid the 1099.

American eagle gold excepted. Also Philharmonics, Pandas, and oddball gold.

The key is if they were EVER sold on the commodity exchange as were Krugerrands and Maples way back when. It was enough to get them classified as a reportable commodity.

And the value of collectibles should be value at time of death and any tax would be on any increase after that point.

I think.

I am not an accountant. You should have an accountant to call for stuff.

DAM · July 31, 2003 7:01AM

So lets assume you sold $25,000 worth of coins at auction. How do you calculate the tax? What if you can't prove your basis (purchase price)?

I was under the impression Federal Tax wasn't levied.

geb209 · July 31, 2003 7:17AM

If you can't prove your basis then its all considered gain and taxed at the 25% rate for federal.

ms71 · July 31, 2003 8:56AM

Coins fall into a special "collectibles" category, & it doesn't matter if they're held short-term or long-term. I believe they're classified as "28% gains", and actually take the 28% tax rate on the gain.

GAT · July 31, 2003 9:04AM

I have a follow on question, do the auction houses fill 1099's on all auction sales?

ms71 · July 31, 2003 9:09AM

No, there's no provision for preparing 1099s for the sale of collector-type coins.

DAM · July 31, 2003 9:35AM

No, there's no provision for preparing 1099s for the sale of collector-type coins.

Does that mean it falls under the "Honor System"?

ms71 · July 31, 2003 10:47AM

Yup.

NumisOxide · June 2, 2006 5:32AM

Old thread but heres goes my question:

I want to start selling coins on my own website for profit and would like to know about taxes when selling coins. Can someone explain this to me please.? Thanks.

BECOKA · June 2, 2006 5:40AM

<< Old thread but heres goes my question:

I want to start selling coins on my own website for profit and would like to know about taxes when selling coins. Can someone explain this to me please.? Thanks. >>

At least in California, If you are selling from California and selling to a California address, you are required take sales tax. You can get a sales permit at the board of equilization and the sale tax goes to them.

Note you don't have to get sales tax when selling to out of state addresses.

NumisOxide · June 2, 2006 5:42AM

BTW, I live in New York.

Longacre · June 2, 2006 5:49AM

<< Old thread but heres goes my question:

I want to start selling coins on my own website for profit and would like to know about taxes when selling coins. Can someone explain this to me please.? Thanks. >>

You should check with a tax lawyer or CPA in your area. Although everyone here means well, sometimes the tax advice is not entirely accurate (especially if not all of the facts are given in the question or if certain assumptions are made). For those on the boards who are qualified to answer the question, it is against the ethics rules to give legal advice in such a forum. But I think a quick call to a professional in your area should give you the assurances that you need.

ewitte · June 2, 2006 6:23AM

It depends. So far I've spent more than I sold so its all good for wanting to file taxes

BlindedByEgo · June 2, 2006 6:39AM

<< Old thread but heres goes my question:

I want to start selling coins on my own website for profit and would like to know about taxes when selling coins. Can someone explain this to me please.? Thanks. >>

I'm not a CPA (my business partner is), but I run several businesses with him. Here's my take:

Every item that is in your inventory has a "cost basis" - basically, what you paid for it, including shipping. There can be more to it - complications best addressed by your CPA.

Every item that you sell has a cost associated with that sale - shipping, listing fees, auction fees or cost to post on your website.

Every coin that you sell generates a "gross revenue".

I pay taxes, basically, on gross revenues minus cost basis minus expenses (including direct costs like labor and indirect costs like overhead).

So, if a coin that I bought for $1000 sells for $1400 plus $25 shipping, my gross revenue is $1425

Subtract $1000 as my cost basis

Subtract $25 shipping (or the actual cost if different)

Subtract actual Paypal and Ebay fees, or merchant fees, say for example 7% or around $100

My net revenue on that coin is $1425-$1125=$300

Repeat this 1000 times in a year, you generate $300,000 net revenue

Subtract facility, labor, depreciation, expenses for miscellaneous materials, website fees - ALL of the other costs associated with the business to generate your taxable net income.

If you haven't figured it out yet, running a business requires making more than just a few bucks on each coin - especially when you have to take a loss to unbury yourself from a bad buy.

If you don't REALLY want to talk to a tax accountant or tax attorney by now... I have failed

ewitte · June 2, 2006 6:55AM

I'm about even saleswise but I am definately putting the scanner, bulk packing materials, etc as an expense. That puts me in the hole several hundred dollars. Not bad considering the first half of what I bought was actually a worse deal than I thought. And it only being several hundred dollars for about $2300 in buys. I don't know how things will even out now that I upgraded to a store with 50MB picture services for about $25/mo. I am throwing on a lot more stuff lying around since it only costs .03/month to keep it on there

Conder101 · June 2, 2006 7:40AM

<< If you haven't figured it out yet, running a business requires making more than just a few bucks on each coin - especially when you have to take a loss to unbury yourself from a bad buy. >>

Yet the majority of collectors get bent out of shape when a dealer won't offer them 90% or more of bid for their coins (including the non-key and non-semikey coins), while at the same time they want the dealers to sell to them AT bid.

ABC123 · June 2, 2006 7:49AM

Answer is: Depends. Do whatever you and/or your tax advisor recommends. But above all, keep records, record, records !

NumisOxide · June 2, 2006 8:08AM

<< Answer is: Depends. Do whatever you and/or your tax advisor recommends. But above all, keep records, record, records ! >>

I'm going to talk to my parents tax consultant tomorrow. I'm a well organized person, so keeping records is no problem for me. Thanks for the replies guys.

Tax question when selling coins...

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