Coin buying and selling and the IRS

Lionel

I've looked around the Web a bit and haven't found anything that addresses my question, so I thought I'd ask it here.

Given that there seem to be a lot of people who have bought various coins, like ASE and AGE sets and so forth, and that have resold them, perhaps with huge profits if they struck it rich with PF70's, is this reportable to the IRS as income? Do short and long term capital gains rules apply to coins? Anyone know any good tax resources for non-dealers (private citizens) who buy and sell coins?

Boom

THE consumate Authority among us goes by the ID, "Oreville."

MisterBungle

I buy high, and sell low!!

If you follow my example, you never have to
worry about it.



~

TwoSides2aCoin

The United States Tax Code is as simple as it gets.
If one has income, one is mandated to pay taxes on that income. So, if you went and collected aluminum cans for a week then took them to the recycler, the money you made from the exchange of those recycleable goods is now INCOME, minus any expenses incurred. ( so , if you wore out a pair of shoes, you can deduct the cost of the shoes, providing your shoes were used exclusively for walking to pick up cans... it's the same with coins). If one does not claim income, one is in violation of the U.S. Tax Code. The gray area is really black or red.
It doesn't get much easier than that.

kranky

My understanding is that coin profits are taxable at 28% maximum capital gains rate (collectibles are specifically identified for this rate). However, if your tax rate is lower than that, you only pay the regular tax rate. They get reported on Schedule D.

However, I'm not a tax person, so perhaps a more authoritative answer will be forthcoming.

RalphE

I am like Mr. Bungle. I usually buy high and sell for less than what I paid, or about the same after expenses. I think it is that way for most small collectors that collect because they like coins, not doing it to make money. However, I do have a question about collecting and taxes. If you buy and trade or sell, do you need a paper receipt for every single wheat penny or Mercury dime you ever bought for proof? If so the hobby turns into a major job and is not worth the effort in my opinion. I don't want the IRS putting a lien on my house because they found out I made .27¢ on a Buffalo nickel once, and I didn't have a receipt for it.

TwoSides2aCoin

Ralph... that's the gray area . Resort to your conscience and have fun. But, if you start taking lavish trips, buying new cars, or spending huge amounts out of the norm... Uncle Sam might send uncle Guido over.

PerryHall

I see a lot of large cash transactions ar shows. I wonder how much of the profit from these transactions is declared as income to the IRS?

LanLord

Here's how you figure your taxes:

Line 1: How much did you make? ______
Line 2: Send it in

410a

David Ganz writes interesting articles about subjects like this
even going so far as to explain incorportion of the collection(s).
They are/were printed in Coin World. Perhaps you could request
some of them from Coin World or contact him. I believe he is in
NYC or practices law there. Regards, Michael