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Does the government hate coin collectors?

lavalava Posts: 3,286 ✭✭✭
Long term capital gains tax rate is 28%, versus only 15% for stocks. Seems oddly unfair given that the US Mint is coming up with new designs to promote the hobby. If the government wanted to promote the hobby, given equal tax treatment would be welcome.

If any congressman are reading this, get this corrected already, you baboon. image
I brake for ear bars.

Comments

  • lavalava Posts: 3,286 ✭✭✭
    Long term capital gains tax rate is 28% FROM THE SALE OF COINS OR OTHER COLLECTIBLES.
    I brake for ear bars.
  • lasvegasteddylasvegasteddy Posts: 10,408 ✭✭✭
    uh let's see dollars that already have been taxed upto 3 or 4 times already buying coins...this should be taxed again
    image

    where's the tar n feathers and something tells me the i.r.s. still doesn't have a booth at boston harborimage

    or did you reverse your title by mistake
    image

    as that's the crowd i'm in
    everything in life is but merely on loan to us by our appreciation....lose your appreciation and see


  • GreeniejrGreeniejr Posts: 1,321 ✭✭✭
    This is actually a large and complicated issue. A lot of this issue is that coins are typically not viewed by the government as a traditional investment. Until somewhat recently no coins were allowed into IRAs and even now it is only certain bullion items held in certain ways. ICTA has been working for years to try and get coins allowed into IRAs to get them more mainstream acceptance as an investment. If I am not mistaken they are also trying to get them to be at a better tax rate as well. Given this is primarily to try to get uniform sales tax laws (no sales tax) this also will lead to gains being taxed like other capital gains.
  • I hate the unequal tax implications as well. However, I would rather pay the higher rate, than have the government oversight and regulation that are required with stocks and bonds transactions. Can you imagine, having to register CUSIP #'s, account numbers, brokerage houses commissions etc that currently come with stock trading if this regulation was extended to our hobby. I'd prefer the 28% cap gains than all that government intrusion into my collection.
    image
  • MikeInFLMikeInFL Posts: 10,188 ✭✭✭✭


    << <i>I hate the unequal tax implications as well. However, I would rather pay the higher rate, than have the government oversight and regulation that are required with stocks and bonds transactions. Can you imagine, having to register CUSIP #'s, account numbers, brokerage houses commissions etc that currently come with stock trading if this regulation was extended to our hobby. I'd prefer the 28% cap gains than all that government intrusion into my collection. >>



    Isn't it counterintuitive that the area with the MOST oversight has the LEAST tax burden?

    So why can't we have both a lower tax burden and less oversight?
    Collector of Large Cents, US Type, and modern pocket change.
  • BoomBoom Posts: 10,165
    Long term, eh? Hmmm. That's provided gains are in fact realized vs bailing & cutting losses!image
  • TwoSides2aCoinTwoSides2aCoin Posts: 43,796 ✭✭✭✭✭
    As long as I get a bailout as a "wannabe" dealer after I lose my shorts, I don't care.
  • LongacreLongacre Posts: 16,717 ✭✭✭
    Individuals can control the payment of these capital gains taxes by not selling a capital asset. I wish I had the same control with the payment of income taxes.
    Always took candy from strangers
    Didn't wanna get me no trade
    Never want to be like papa
    Working for the boss every night and day
    --"Happy", by the Rolling Stones (1972)
  • BoomBoom Posts: 10,165
    << Individuals can control the payment of these capital gains taxes by not selling a capital asset.>>

    True. Absolutely!! image
  • dengadenga Posts: 903 ✭✭✭
    lava September 24, 2008

    Long term capital gains tax rate is 28%, versus only 15% for stocks. Seems oddly unfair given that the US Mint is coming up with new designs to promote the hobby. If the government wanted to promote the hobby, given equal tax treatment would be welcome. If any congressman are reading this, get this corrected already, you baboon.


    I once asked a CPA/tax specialist why the difference in rates. His answer?

    “Whoever said the tax rates are fair?”

    Lava has an exceptionally good point, however. These same Congressmen who push surcharged
    coins as a way of squeezing money out of collectors for some pet charity also pass the unfair tax
    legislation aimed at those who invest in collectibles.

    Denga
  • LongacreLongacre Posts: 16,717 ✭✭✭
    The tax system is not fair, but everyone gets their panties in a bunch over the individual income tax rules. The real monkey business happens in the corporate tax laws, and things get really wild in the international tax laws. The Masses should be up in arms about the corporate/international tax law, but no one hears about this stuff, and the common people don't seem to care.
    Always took candy from strangers
    Didn't wanna get me no trade
    Never want to be like papa
    Working for the boss every night and day
    --"Happy", by the Rolling Stones (1972)


  • << <i>Long term capital gains tax rate is 28%, versus only 15% for stocks. >>





    You can not buy & sell Stocks with CASH......................
    There is a paper trail for every transaction you make in the stock market.

  • The market thinks that stocks will soon be back to 28%.
  • CoinHuskerCoinHusker Posts: 5,030 ✭✭✭


    << <i> and the common people don't seem to care. >>



    I have a feeling they are starting too. image
    Collecting coins, medals and currency featuring "The Sower"
  • SilverstateSilverstate Posts: 1,537 ✭✭✭
    If it goes like stocks. You can add up the losses and the gains to see where it lands.
    Plus expenses can be deducted from the coin investments as well.
    Stocks don't have too many added expenses to deduct before a gain is realized.
  • tahoe98tahoe98 Posts: 11,388 ✭✭✭


    << <i>As long as I get a bailout as a "wannabe" dealer after I lose my shorts, I don't care. >>





    .......................image
    "government is not reason, it is not eloquence-it is a force! like fire, it is a dangerous servant and a fearful master; never for a moment should it be left to irresponsible action." George Washington
  • The other factor not taken into account in taxing of captial gains or stocks is the inflation factor. What inflation was for any given period of time that the coin, or any assest, was held should be taken into account. For example if a coin was held for 4 years and the core inflation rate was 12% then this core inflation rate should be backed out from any calculation in gain of value. In the event the coin loss value then the inflation factor should also be used in determining the amount of the loss.
  • CalGoldCalGold Posts: 2,609 ✭✭
    Capital gains for coin collecting? The capital gains tax benefit is intended to encourage the investment of capital in the growth of American industry and commerce. If anything, coin collecting diverts money away from productive investment and freezes it in non-productive assets. In a capitalist economy, one could justify a tax surcharge on profits from the sale of non-productive assets in order to discourage people from putting money into such things.

    CG
  • roadrunnerroadrunner Posts: 28,303 ✭✭✭✭✭
    The other factor not taken into account in taxing of captial gains or stocks is the inflation factor. What inflation was for any given period of time that the coin, or any assest, was held should be taken into account. For example if a coin was held for 4 years and the core inflation rate was 12% then this core inflation rate should be backed out from any calculation in gain of value. In the event the coin loss value then the inflation factor should also be used in determining the amount of the loss.

    The govt wouldn't be stupid enough to bring an inflation factor to the forefront for any assets let alone stocks. The last thing they need to enlighten J6P on is how much he has lost in stocks due to the 40% depreciation of the USDollar over the past 7 years. Let him continue to think that he has made a few percent in those years.

    Don't expect to see a dollar adjusted graph of gold vs stocks on the WSJ any time soon. Reference is always made to the "benign" CPI, which as we all know is designed "not to change." (ie a "constant price index"). J6P is allowed to use the CPI for all the comparisions his or her little her desires. In using a dollar comparison one would find that many coins have outdistanced stocks for years because they tend to out-pace the rate of dollar depreciation during inflationary times. Many worthwhile coins have doubled or tripled in price since 2001...then again many widgets have barely kept up or even lost value. The next question is how many collectors actually report their capital gains oncoins? In this respect I would think that the govt casts a wary eye at our hobby. They don't care about the 90% of hobbyists or casual buyers who lose money. But they want that other 10% to pay up.

    roadrunner
    Barbarous Relic No More, LSCC -GoldSeek--shadow stats--SafeHaven--321gold
  • lavalava Posts: 3,286 ✭✭✭


    << <i>Capital gains for coin collecting? The capital gains tax benefit is intended to encourage the investment of capital in the growth of American industry and commerce. If anything, coin collecting diverts money away from productive investment and freezes it in non-productive assets. In a capitalist economy, one could justify a tax surcharge on profits from the sale of non-productive assets in order to discourage people from putting money into such things.

    CG >>



    Yet you can buy an ETF that tracks the price of oil, or gold, and get the 15% rate, and it is essentially like trading a commodity.
    I brake for ear bars.
  • CalGoldCalGold Posts: 2,609 ✭✭


    << <i>Yet you can buy an ETF that tracks the price of oil, or gold, and get the 15% rate, and it is essentially like trading a commodity >>



    Good point. Some more changes to the Internal Revenue Code are needed. And they should throw raw land in with coins, gold bars, and pork bellies.

    CG
  • "The market thinks that stocks will soon be back to 28%."

    If that actually were to happen, we will have a depression. In my opinion, in our delicate financial condition, even if the '03 tax cuts do not get extended, we might get one.

    Julian
  • roadrunnerroadrunner Posts: 28,303 ✭✭✭✭✭
    If a 28% tax rate was offered on those ETF's it would have reduced the demand for them. And the reason the PTB wanted them and allowed them, was because it gave them more access to "adjust" commodity markets when required. Hence the need for the 15% lollipop.

    roadrunner
    Barbarous Relic No More, LSCC -GoldSeek--shadow stats--SafeHaven--321gold
  • saintgurusaintguru Posts: 7,724 ✭✭✭
    There's TAXES on selling coins?
























    image
    image
  • PerryHallPerryHall Posts: 45,301 ✭✭✭✭✭


    << <i>There's TAXES on selling coins? >>



    Yes, unless it's a cash transaction. image

    Worry is the interest you pay on a debt you may not owe.

  • LongacreLongacre Posts: 16,717 ✭✭✭


    << <i>

    << <i>There's TAXES on selling coins? >>



    Yes, unless it's a cash transaction. image >>




    This reminds me of a funny story that happened last weekend. My inlaws hired a professional tax sale organizer to do a tag sale for them. The lady's fee is 1/3 of the cash proceeds from the sale. I was talking with this lady, and I mentioned something about the taxes on her business. With a straight face, she told me that her fees were exempt from taxation. When I asked why, the only "authority" that she could quote was herself, saying that if she had to pay tax on her fees, she would be working for below minimum wage, and that is not allowed.

    To make this even more bizarre, that evening I got home and opened up our local newspaper. Longacre lives in a one-horse town and each week the paper profiles a resident of the town. Would you believe it (I kid you not), this tag sale lady was the person of the week! Continuing with the bizarre, the article tells about her, her tag sale business, etc. Then it goes on to say that this lady volunteers to prepare income tax returns for the senior citizens in my town at our local library! Incredible. image
    Always took candy from strangers
    Didn't wanna get me no trade
    Never want to be like papa
    Working for the boss every night and day
    --"Happy", by the Rolling Stones (1972)
  • lasvegasteddylasvegasteddy Posts: 10,408 ✭✭✭
    <<<I once asked a CPA/tax specialist why the difference in rates. His answer?

    “Whoever said the tax rates are fair?”>>>

    what a crock and he proclaims to be a cpa or specialist

    i have 2 very dear friends of mine both out of the same special forces marine unit reindeer marines they both proclaim but that was included as they were taught no pain no gain and pain ain't a thing compared to their pow trainings

    so it was decided by them to have a lil fun being out of action "per se" so they refused paying taxes and won their case at the supreme court on many issues but the one that stopped the supreme court in it's tracks was when they informed those judges to seek chamber time and review the laws president mc kinley endorced as noted below

    "if there are to be taxes upon the people of this land it is to be fair and equal and if it is not...that tax law shall be deemed unjust"

    i'm an idiot on alot of things as i never studied to depths as these 2 did but i'm sure it's easy enough to verify as these reindeer marines held president mc kinnley in highest respect over his enactments

    and for a tax specialist or cpa to not know his field makes me laff...they're brain washed i.r.s. collectors and don't even know it

    so whoever said "that tax rates are fair"...it was president mc kinley who ensured they "were and are to be"

    anyone care to dig up mc kinley's stance is more then welcome too as tax rate differences are unfair according to the letter of the law


    everything in life is but merely on loan to us by our appreciation....lose your appreciation and see


  • saintgurusaintguru Posts: 7,724 ✭✭✭
    No taxes if you buy a like commodity; ie. another coin.
    image
  • did the 16th amendment ever get ratified?

    Who sid you have to pay a personal income tax if you are just an employee- making a wage, not an income?

    IRS is a joke and our guberment is not much better- about time the PEOPLE take back the FREEDOM we once had- and take it away from politicians who could care less about you and more for the so called corporate world.

    I will now be able to say I own a part of an insurance Comapny, and 3 major lending institutions, when the bailout is passed- and I'll bet a dollar to 700 billion- I won't be able to get a loan from any of these so called financial megaladons.

    AND ITS MY D A M M MONEY!!!
  • lasvegasteddylasvegasteddy Posts: 10,408 ✭✭✭
    <<<did the 16th amendment ever get ratified?>>>

    i likes itimage

    everything in life is but merely on loan to us by our appreciation....lose your appreciation and see


  • coolestcoolest Posts: 2,281 ✭✭✭


    << <i>The tax system is not fair, but everyone gets their panties in a bunch over the individual income tax rules. The real monkey business happens in the corporate tax laws, and things get really wild in the international tax laws. The Masses should be up in arms about the corporate/international tax law, but no one hears about this stuff, and the common people don't seem to care. >>



    Even you who seem to know something about these tax laws gave no specific examples.
  • roadrunnerroadrunner Posts: 28,303 ✭✭✭✭✭
    No taxes if you buy a like commodity; ie. another coin.

    This is not as staight forward as it looks. Anyone, can not just "trade" any coin for another coin(s) and call it an exchange, at least not per lawyer Armen Vartian who frequently writes articles for Coin World.

    This is from an older post of mine:

    Lawyer Armen R. Vartian did a great piece on "like-kind exchanges" in Coin World (9/4/2006). Since this topic has been discussed many times here this article was well worth keeping. There are numerous restrictions assuming Vartian's opinions are correct. In summary:

    limited circumstances only:
    -arms length's parties (not relatives for example or your business buddy)
    -related parties must each hold the property for at least 2 years!!!
    -held purely for investment purposes (not a hobby) - profit motive!!
    -collectors who act as dealers for tax purposes to deduct expenses can not use like-kind-exchange - no dealers.
    -dealers trading their stock is not allowed - no dealers.
    -item must be of "like-kind" (no bullion items since that's cash)
    -findings against some trades in different metals have been disallowed - no guarantee that a trade of a large cent for a silver
    dollar grouping would be allowed for example.
    -must file form 8824 for the exchange (see code 1031 exchanges) to trigger the IRS - that's always fun to help red flag you for an audit.
    -barter exchanges (such as coins for residences does not fly)

    The 2 year hold for both parties, profit motive, investment coins put back for several years, eliminates most every transaction from consideration. I can't even believe the 2 year rule for both parties. You basically have to monitor another investor's time frame to legitimize your own holding period! But that's what Vartian is saying.
    I'd be surprised if even one coin investor on one single transaction has ever met all these conditions. One cannot get cash for a coin, buy another, and then call that transaction a like-kind-exchange.

    Good luck with this one if what Vartian says is correct. Having to go through this many hoops essentially destroys the concept of an exchange. In other words, uncle doesn't want this being done. But no doubt there is very little enforcement here.


    As HRH would say......."have fun with your trade!"

    roadrunner

    Barbarous Relic No More, LSCC -GoldSeek--shadow stats--SafeHaven--321gold
  • FrankcoinsFrankcoins Posts: 4,569 ✭✭✭
    You are being punished for not buying something productive with your money...like mortgage backed securities...
    Frank Provasek - PCGS Authorized Dealer, Life Member ANA, Member TNA. www.frankcoins.com
  • MrEurekaMrEureka Posts: 23,892 ✭✭✭✭✭
    ttt
    Andy Lustig

    Doggedly collecting coins of the Central American Republic.

    Visit the Society of US Pattern Collectors at USPatterns.com.
  • ConnecticoinConnecticoin Posts: 12,475 ✭✭✭✭✭


    << <i>No taxes if you buy a like commodity; ie. another coin. >>



    Care to elaborate?
  • fishcookerfishcooker Posts: 3,446 ✭✭

    I sure thought I read somewhere that trading the ETF for silver (SLV) invoked the same tax rate as collectibles. But I don't trade SLV in a taxable account.

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