If you sell coins, and aren't a "dealer", at what level/amount do you think the IRS would
Bochiman
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I know that buying/selling coins as a hobby is something a lot do, and few report to the IRS about.
If one buys a coin to upgrade their set, then sells the previous one, I don't think they are a dealer.
I would go so far as to say that I don't think someone who is selling raw, modern, coins is a dealer either.
But, if one uses a TPG, sells on ebay, etc, and is selling the same thing repeatedly (ie...not upgrading/selling), then one is a dealer. So, at what level should that person be reporting income to the IRS?
Curious since all the talk about the SB lately.....
If one buys a coin to upgrade their set, then sells the previous one, I don't think they are a dealer.
I would go so far as to say that I don't think someone who is selling raw, modern, coins is a dealer either.
But, if one uses a TPG, sells on ebay, etc, and is selling the same thing repeatedly (ie...not upgrading/selling), then one is a dealer. So, at what level should that person be reporting income to the IRS?
Curious since all the talk about the SB lately.....
I've been told I tolerate fools poorly...that may explain things if I have a problem with you. Current ebay items - Nothing at the moment
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You are evil if you are pondering what I thought when I read your last line.
I've been told I tolerate fools poorly...that may explain things if I have a problem with you. Current ebay items - Nothing at the moment
Jeremy
The FTB does not care if your stuff is modern or raw,they will only care that you make "proceeds" and you file quarterly so they can have a share............no doubt,you will qualify in their eyes as one who needs to collect and file.
<< <i>you'll need to be concerned about the Franchise tax Board of your state more over the IRS.
The FTB does not care if your stuff is modern or raw,they will only care that you make "proceeds" and you file quarterly so they can have a share............no doubt,you will qualify in their eyes as one who needs to collect and file.
Hmmmm.....what states do/don't have an income tax then? Hadn' thought of that....double tax evasion?
I've been told I tolerate fools poorly...that may explain things if I have a problem with you. Current ebay items - Nothing at the moment
<< <i>double tax evasion >>
that anything like Double Secret Probation?
<< <i>So, at what level should that person be reporting income to the IRS? >>
From the very first dollar.
Russ, NCNE
If you are a collector, sell a coin at a loss and upgrade it, this loss is not deductible, as it is considered to be a hobby loss. Ie., if you are not in business, your losses are only deductible to the extent of your profits. You can never show a net loss from an activity which is considered to be a hobby.
If you're buying and selling a lot on E-Bay, you have a business, my friend. You put all of your activity on a Schedule C. Profits are taxed at ordinary income rates (not 28%, that would apply to a collector who sold a coin at a profit). If you're selling a lot on E-Bay, you also should have an applicable sales tax permit, a business license (which I'm sure almost no one has), and collect sales tax when appropriate and remit it to your (and possibly other) state(s) department of revenue or equivalent.
Schedule Cs almost always involve self-employment tax, in addition to income tax paid on the net profits. There may be an exception in some cases for some coin dealers (ie., day traders of securities should file schedule Cs but are not subject to sales tax), but since I've never had a client with this situation, I haven't looked into it yet.
That's it. Anything else, and you're on the clock!
"Seu cabra da peste,
"Sou Mangueira......."
<< <i>
<< <i>double tax evasion >>
that anything like Double Secret Probation? >>
oops 2-$2 rolls
<< <i>Does the mint report their profits ($8.95 for a $2 roll of nickels,etc) to the IRS?
I think the Feds could consider themselves anything they want to. Robin Hood comes to mind.
<< <i>Does the mint report their profits ($8.95 for a $2 roll of nickels,etc) to the IRS?
oops 2-$2 rolls >>
Government doesn't tax themselves, I don't think. I don't think they should anyway. Just more red tape and overhead we would all pay for.
They can make money, for all I care, as long as it is legal and isn't forced (no one is FORCING you to buy those nickels....just wait a few years and buy them below cost).
Now, I pay my taxes, I have lost money (I still have 9 more years worth of losses being written off from losses). So, I was just curious about others...especially those making thousands on a single coin or two...and having lots of coins being sold......hope they are all good citizens and reporting it like they should.
I've been told I tolerate fools poorly...that may explain things if I have a problem with you. Current ebay items - Nothing at the moment
If Al Capone reported his illegal income to the IRS, he never would have went to prison.
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some paperwork involved, but for my situation it is minor - reconcile the business
checkbook monthly, report sales tax annually, file a Schedule C to report profit/loss.
There are some real benefits in that you can deduct travel to shows, publications, dues,
supplies, equipment, etc.
Another real benefit is that it forces you to keep good records on purchases, sales
and expenses, which is something we all should be doing anyway.
Coin purchases become inventory and can be listed at cost until such time as you
sell each one.
There are some guidelines from the IRS' standpoint that separate businesses from
hobbies; namely that you must be legitimately trying to make a profit vs. just trying
to write off your hobby as a business expense.
It's not for everyone, but I think a number of people on this board could benefit
by operating their coin venture as a business - check with your accountants!
Ken
<< <i>I report everything. Have been set up as a legitimate business since 1999. There is
some paperwork involved, but for my situation it is minor - reconcile the business
checkbook monthly, report sales tax annually, file a Schedule C to report profit/loss.
There are some real benefits in that you can deduct travel to shows, publications, dues,
supplies, equipment, etc.
Another real benefit is that it forces you to keep good records on purchases, sales
and expenses, which is something we all should be doing anyway.
Coin purchases become inventory and can be listed at cost until such time as you
sell each one.
There are some guidelines from the IRS' standpoint that separate businesses from
hobbies; namely that you must be legitimately trying to make a profit vs. just trying
to write off your hobby as a business expense.
It's the demonic FTB that creates piles of work for you!
It's not for everyone, but I think a number of people on this board could benefit
by operating their coin venture as a business - check with your accountants!
Ken >>
Government su*kass!!!!!
This, of course, is a different method of accounting, but for true collectors, having a total cost for their collection is a legitimate way of accounting for profits (losses) when the collection is eventually sold and not having to be concerned about income taxes when duplicates are sold.
This is only justifiable for collectors and not for collector-dealers that buy and sell coins for a profit, even if it is just meant to support the collection.
The Service may not agree, but this is justifiable, IMHO.
I firmly believe in numismatics as the world's greatest hobby, but recognize that this is a luxury and without collectors, we can all spend/melt our collections/inventories.
eBaystore
<< <i>From the very first dollar
Government su*kass!!!!! >>
It's self-preservation. I've been audited three times in the 16 years I've been in business. Hell, they audited me my very first year.
Russ, NCNE
I've been told I tolerate fools poorly...that may explain things if I have a problem with you. Current ebay items - Nothing at the moment
<< <i>would they just audit a "non-business person" if they suspected that a large amount of income (maybe 50% of what the person makes otherwise, or more) wasn't reported to start with? >>
Sure they would. Matter of fact, eBay reports information to the IRS. There was some kind of news article about that last year.
Russ, NCNE
If I'm buying and selling a lot, I need to set up proper bookkeeping.
Once I finish upgrading my Liberty nickels, I fully intend to sell off the culls. I don't expect to realize much if any profit, but I was planning on calling it capital gain.
<< <i>ya so you guys better get your paperwork done. Mine is - and Bochiman - don't you worry about Nep`. She can take care of herself - thank you very much.
Why do you think everything is about you? From the responses, you should see that this thread is quite pertinent to many people.
I've been told I tolerate fools poorly...that may explain things if I have a problem with you. Current ebay items - Nothing at the moment
<< <i>How is the government going to prove the profit...How do they know what you payed for the coin...all they know is what you sold it for. >>
In an example like that the IRS would estimate the cost basis, and it would be up to you to prove otherwise.
Russ, NCNE
1916-D Mercury... $1
1913 Nickel... $1
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Seriously, I often wonder if I'm really a dealer or not.
I, for one, do not pay cash in my store for items that are more than $50. Occasionally, at a show, if I know the person, I might pay up to $200 for a coin, if I am running low on checks.
Cash can be difficult to handle, with all the regulations.
Certainly be careful of customers wishing to pay you more than $10000. in cash, in one calendar year.
The IRS has very stiff penalities.
I firmly believe in numismatics as the world's greatest hobby, but recognize that this is a luxury and without collectors, we can all spend/melt our collections/inventories.
eBaystore
<< <i>Of course, I don't guess that I could deduct coin publications, travel to shows, etc. but at least the profit wouldn't be taxed at ordinary rates and no self-employment tax. >>
Correct me if I'm wrong but wouldn't you only be allowed to deduct those expenses if you were running a business but not as a hobby? It seems to this observer that your cost basis is only what you paid for the coin, not the incidentals like travel to shows, flips, etc.
<< <i>It's self-preservation. I've been audited three times in the 16 years I've been in business. Hell, they audited me my very first year. >>
Agree 100% with Russ. Always report all your income to the IRS. It's like health insurance: you may never need it, but if you do, you'd better hope your policy hasn't expired!