28% withholding tax on bullion transactions if no 1099
CaptHenway
Posts: 32,125 ✭✭✭✭✭
From the Taxpayers Advocate Service and the National Taxpayer Advocate's Annual Report:
See pp. 21-25.
link
TD
See pp. 21-25.
link
TD
Numismatist. 50 year member ANA. Winner of four ANA Heath Literary Awards; three Wayte and Olga Raymond Literary Awards; Numismatist of the Year Award 2009, and Lifetime Achievement Award 2020. Winner numerous NLG Literary Awards.
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page 23
"If a vendor fails to furnish a correct TIN, the business is required by law to impose back-up
withholding at the rate of 28 percent of the purchase price.56 In this situation, the business
must prepare and file Form 945, Annual Return of Withheld Federal Income Tax, and make
federal tax deposits at an authorized institution on a prescribed schedule. Failure to withhold
an amount generally results in liability for that amount.57 In the case of a purchase of
goods, back-up withholding may be impracticable, because a business already may have paid
the full price at the point of sale before learning that the TIN was incorrect. Alternatively, a
vendor may simply refuse to sell goods to any purchaser that refuses to pay the full purchase
price. Such an outcome could significantly impair the normal course of commerce. No business
should have to choose between compliance with back-up withholding and losing access
to vendors on the one hand, and noncompliance while keeping vendor access on the other
hand.
Second, businesses will now have to keep records of all purchases sorted"
That's the little guy whether he has a storefront or not.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
roadrunner
I knew it would happen.
A person sells a 1 ounce gold to a dealer. He takes away his $1,200 and leaves his name and social security number. At the end of the year the dealer sends him a 1099 with a copy to the IRS.
At tax time the person who sold the 1 oz gold coin must prove their cost basis. They would owe 28% of their "profit". Otherwise they owe 28% of the $1,200 as federal tax.
https://www.pcgs.com/setregistry/gold/liberty-head-2-1-gold-major-sets/liberty-head-2-1-gold-basic-set-circulation-strikes-1840-1907-cac/alltimeset/268163
roadrunner
<< <i>A person sells a 1 ounce gold to a dealer. He takes away his $1,200 and leaves his name and social security number. At the end of the year the dealer sends him a 1099 with a copy to the IRS. >>
Don't forget the part where he sells your SSN to someone who then steals your identity.
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
"Ask, and it shall be given you; seek, and ye shall find; knock, and it shall be opened unto you." -Luke 11:9
"Hear, O Israel: The LORD our God is one LORD: And thou shalt love the LORD thy God with all thine heart, and with all thy soul, and with all thy might." -Deut. 6:4-5
"For the LORD is our judge, the LORD is our lawgiver, the LORD is our king; He will save us." -Isaiah 33:22
<< <i>I sense a giant wave of civil disobedience about to engulf the nation. And rightfully so. We allow ourselves to be incrementally enslaved, and this is another big step in that direction.
All this "change" is becoming clear. It is the road to serfdom. My "hope" is November.
https://www.pcgs.com/setregistry/gold/liberty-head-2-1-gold-major-sets/liberty-head-2-1-gold-basic-set-circulation-strikes-1840-1907-cac/alltimeset/268163
<< <i>I sense a giant wave of civil disobedience about to engulf the nation. And rightfully so. We allow ourselves to be incrementally enslaved, and this is another big step in that direction.
<< <i>Under absolutely no circumstances will my SSN be given out, to anyone. I feel as though a lot of people will be this way, and there will soon big a HUGE black market for most services and commodities. >>
And you won't be getting a fair price for your goods you can bet on that
<< <i>
<< <i>Under absolutely no circumstances will my SSN be given out, to anyone. I feel as though a lot of people will be this way, and there will soon big a HUGE black market for most services and commodities. >>
And you won't be getting a fair price for your goods you can bet on that >>
I'd be willing to wager that the black market will eventually surpass the "legal" market and thus buyers/dealer will have to raise their prices paid in order to attract quality merchandise, not the other way around. People will guard their privacy with a vengeance; you'll see.
And another thing that's going to happen is people will be using gold and silver more and more for actual payments and completely circumvent the fiat currencies and the inevitable taxman, not to mention the dealers who don't want to play ball.
"Ask, and it shall be given you; seek, and ye shall find; knock, and it shall be opened unto you." -Luke 11:9
"Hear, O Israel: The LORD our God is one LORD: And thou shalt love the LORD thy God with all thine heart, and with all thy soul, and with all thy might." -Deut. 6:4-5
"For the LORD is our judge, the LORD is our lawgiver, the LORD is our king; He will save us." -Isaiah 33:22
Sounds like the makings of a dying market due to draconian tax regs.
Did anyone ever ask how Charlie Rangel could afford a Caribbean resort getaway when he's never worked a real job in his whole life, and why he never bothered to pay any taxes on it? Did Timmy Geithner ever get around to paying any penalties for dodging 4 years' worth of fully-taxable foreign earnings? Who enforces tax law for these corrupt "lawmakers" and "tax compliance officers"? Yeah, let's talk about tax compliance. It should be obvious that there are indeed "two Americas", but not in the way that Johnny Edwards loved to push as his divisive campaign slogan.
I knew it would happen.
<< <i>
<< <i>Under absolutely no circumstances will my SSN be given out, to anyone. I feel as though a lot of people will be this way, and there will soon big a HUGE black market for most services and commodities. >>
And you won't be getting a fair price for your goods you can bet on that >>
You would be surprised. In the current market, we consistantly get approached about "cash" prices for the service we provide. If I wanted to, I could currently run my business on nothing but "cash" transactions. I do not do this as we do a ton of government and "big bussissness" contracts, but if push came to shove, It could EASILY be done. Nothing would change for my business, as the government and business contracts we have still 1099 us as it is anyways, and I would just do all "public" projects over $500 as cash only.
Keep in mind, this may not work for all businesses... but looking at the numbers and the way people approach contracting us, I could easily do it.
The more cash that leaves the system, the greater the deflationary pressures.
Knowledge is the enemy of fear
<< <i>Nothing would change for my business, as the government and business contracts we have still 1099 us as it is anyways, and I would just do all "public" projects over $500 as cash only. >>
I think you left something out.
I think you meant "I would just do all 'public' projects over $500 as cash only, and not file the 1099s, and if my business was audited, I would accept the consequences for not filling out the 1099s."
<< <i>
<< <i>Nothing would change for my business, as the government and business contracts we have still 1099 us as it is anyways, and I would just do all "public" projects over $500 as cash only. >>
I think you left something out.
I think you meant "I would just do all 'public' projects over $500 as cash only, and not file the 1099s, and if my business was audited, I would accept the consequences for not filling out the 1099s." >>
What projects over $500? We didnt do any of those? In theory or paperwork.
Edited to add: For the record, this would not be to skirt any taxes, as I pay what I am suppost to. This would be to help eliminate additional paperwork on the already huge amounts we do.
<< <i>
<< <i>
<< <i>Under absolutely no circumstances will my SSN be given out, to anyone. I feel as though a lot of people will be this way, and there will soon big a HUGE black market for most services and commodities. >>
And you won't be getting a fair price for your goods you can bet on that >>
You would be surprised. In the current market, we consistantly get approached about "cash" prices for the service we provide. If I wanted to, I could currently run my business on nothing but "cash" transactions. I do not do this as we do a ton of government and "big bussissness" contracts, but if push came to shove, It could EASILY be done. Nothing would change for my business, as the government and business contracts we have still 1099 us as it is anyways, and I would just do all "public" projects over $500 as cash only.
Keep in mind, this may not work for all businesses... but looking at the numbers and the way people approach contracting us, I could easily do it. >>
What type of business if I may ask?
You pay the government so you send them 1099's
You pay people for services?
If not you're not comparing apples to apples
If you are a service business only services done for other business would require that they send you a 1099
Services done for people ordinary Joes , they don't have to send you 1099's
cash is not being used in everyday commerce as it once was, less than 3% of the money supply is in coin/currency and im sure the powers that be would like that to be as close to zero as possible
and who is to blame?
every citizen who ponies up their debit/credit cards for everyday purchases......at the fast food joint, for dinner, for everything.......
if you want your transactions to be private, use cash everywhere
<< <i>
<< <i>
<< <i>
<< <i>Under absolutely no circumstances will my SSN be given out, to anyone. I feel as though a lot of people will be this way, and there will soon big a HUGE black market for most services and commodities. >>
And you won't be getting a fair price for your goods you can bet on that >>
You would be surprised. In the current market, we consistantly get approached about "cash" prices for the service we provide. If I wanted to, I could currently run my business on nothing but "cash" transactions. I do not do this as we do a ton of government and "big bussissness" contracts, but if push came to shove, It could EASILY be done. Nothing would change for my business, as the government and business contracts we have still 1099 us as it is anyways, and I would just do all "public" projects over $500 as cash only.
Keep in mind, this may not work for all businesses... but looking at the numbers and the way people approach contracting us, I could easily do it. >>
What type of business if I may ask?
You pay the government so you send them 1099's
You pay people for services?
If not you're not comparing apples to apples
If you are a service business only services done for other business would require that they send you a 1099
Services done for people ordinary Joes , they don't have to send you 1099's >>
Our primary business is boat canvas and upholstery but we do a lot of government and industrial contracts as well. Where I live, the majority of people are self employed, and there is no doubt in my mind, they will try to 1099 personal items for their boat because their boat is "business". People have tried in the past to 1099 us, but if they are not government or business, I wont provide them my SSN (we dont have a EIN... YET). I simply tell them to claim it as misc and we will file it on our end (which we do anyways).
Im glad to see it is only business to business transactions, but I dont think that this will help pin down unclaimed revenue, as most revenue I would assume is consumer to business...
<< <i>Im glad to see it is only business to business transactions >>
The new law requires 1099s to be reported when an individual sells to a business.
<< <i>
<< <i>Im glad to see it is only business to business transactions >>
The new law requires 1099s to be reported when an individual sells to a business. >>
Well, then cash it is.
Seems I read somewhere that an individual must pay tax on the gain but can not take the write off on a loss. I'm talking as an individual, not a business. Anyone know for sure?
Thanks.
RR
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
Got Cash?
Got cash
Heck yeah, I just bought donuts for the office. I don't want Obama's health panels knowing it.
<< <i>You can deduct up to $3,000 in capital losses in one year with the balance carrying for up to the next 3 years. Now someone correct me if I'm wrong as I know this applies to stocks and I don't see why it wouldn't apply to coins.................MJ >>
Applies to anything that would require you to pay captial gains taxes when there is a profit.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
and they're cold.
I don't want nobody to shoot me in the foxhole."
Mary
Best Franklin Website
<< <i>Transaction tax >>
That has all the signs of a major hoax.
The URL you gave appears to be some minor newspaper -- but further research shows that their wording is exactly the same as on all the blogs and such. And that this was all added within the past 2 days, yet no major news outlets have picked up on it.
Note that they don't give enough details to allow you to do anything except be outraged -- e.g. would this replace income tax? If so, it might be a wonderful idea (no need to discuss it, though, unless it is proven to be true). That's typical of a hoax.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i>Transaction tax? >>
Another paranoid rant.
And yes, I am hearing about it alot now.
The last I heard, No, gold bullion and even GLD are not written off like stocks can be.
I sure haven't heard that. Bullion and/or GLD are investments just like any other, subject to tax and subject to losses as well. Any losses can be used to offset gains prior to calculating your tax liability.
I knew it would happen.
If this was to happen there isn't enough cash in the system to handle it. The value of cash would rise vs. the value of credit. In the same way the value of hard assets would rise as well as credit cheapened and people avoided it. But this is very unlikely to happen as the sheeple are well-conditioned to think of their credit cards as cash. Only a small % of the people would ever shift to a pure cash mode. The govt would do all they could to close every loop hole possible to cash and crush such an idea. Hey, that's already been in progress for 40 yrs.
The $3000 deduction per for losses comes from investment losses, not hobby or "fun and game" losses. This is why it's important to show that your coin "hobby" is also for profit because you keep detailed records, and show an investment logic via your purchases and overall track record. I don't believe someone who is only doing the hobby for pure "fun" and then decides after selling his collection for a tidy loss then determines he was also an investor all along. The majority of people on this board are concerned about profit/loss in their coins and seem to manage this appropriately.
roadrunner
There is certainly not enough cash FRN's to provide for everyone but it is not necessary. Most folk, I suspect more than 80%, are doing almost all of their transactions via debit and credit cards. The gov wants people to leave good paper trails and to have digibuks as the main vehicle for purchases. In doing this, everything goes through the banks and the banks get to rake a transaction amount each time this vehicle is used. It is good for the banks, it is convenient for the people and it is easy to create stats on the individuals making the transactions and types of transactions they make and what goods are being purchased. Additionally, it provides a profile on the buyers so they can be offered advertising that is more target specific. So, if you like the banks adding 2% at a minimum the the cost of your goods, if you like being targeted for advertising, if you like people knowing what you buy where you buy it and how much you spend on it then use digibuks. Those of us that are able to use cash should use cash. Cash is now and will be even more so in the future as a value added vehicle for purchases. Cash is King, believe it.
Cash will command a premium much like PM's do now. If a roofing job costs 8K and you can get it for 6500 w/cash, then it is good for the consumer. If your car repair guy needs 400 to fix your transmission and you can get it for 350 with cash or mabye get some "free" shocks out of the deal then it is good for the consumer. But some things will give you a hickey anyway. For example, you will pay the same for groceries and gas and other common goods because there is no discount for cash so why not use the credit card for these things, you're gonna take the same hickey using either cash or credit. I still use cash for most things though, keeps things simple but things like paying for gas at the pump, swiping your plastic for convenience does have value. If, you go to individual businesses to make your purchases, like the open air markets, the resellers, the service people, the individually owned shops that benefit from cash transactions then items becomes more negotiable and the cash provides more of a benefit to both the buyer and the seller. If you're buying a new car, fixing your A/C, anything with an individual, then Cash is indeed King.
The talk about the number of banks failing each week is of little importance to cash people because there are thousands and thousands of banks. With the banking lobbys and the transaction fees for using plastic, the banks are on the yellow brick road. The unhealthy banks die and get eated by the ones that didn't make bad bets, it's just normal busines. When thousands of banks go down, then it will be significant but hundreds...nah. Banks have proliferated ad infinitum over the last decade and there are seemingly as many banks and branches as there are gas stations and this is in concert with the use of plastic digibuks and the associated fees, it's free money for the banks but it costs you in what you pay for these goods. During the depression of the 30's, 9000 banks failed and there were just a fraction of the number of banks then that we have now. If we lost 10,000 banks then maybe that would raise an eyebrow.
Got Cash?
Huh?
<< <i>This applies to vendor-to-business transactions. Not buying or selling to retail customers. >>
Today, yes. But the new law applies when businesses buy from individuals. See http://About.Ag/1099-healthcare.htm for the summary/details.
<< <i>Belize is looking better every day! (Or any other non -USA retirement destination...) >>
Yes, I agree. At this rate, I'll be moving in a few years. I hope these Socialist Democrats suffer someday.
<< <i>This applies to vendor-to-business transactions. Not buying or selling to retail customers. >>
If a business buys more than 600.00 from an individual ,
business or not, they must issue a 1099,
Reread the whole law
Other wise, how will the dealer know when the aggregate amount for the year has exceeded the $600 threshold? They will have to have the SSN and keep a running total.... even though they will not have to submit the form until $600 has been reached.
Wonderful.... good luck getting SSN from sellers.... especially for the lower amounts....
<< <i>So..... looks to me as though a seller will have to give up SSN for ANY sell to a dealer or business, whether it is for $10 or over $600.
Other wise, how will the dealer know when the aggregate amount for the year has exceeded the $600 threshold? They will have to have the SSN and keep a running total.... even though they will not have to submit the form until $600 has been reached.
Wonderful.... good luck getting SSN from sellers.... especially for the lower amounts.... >>
Individuals selling coins to a business need only apply for a Tax Identification Number to avoid giving out their SSN. IRS form W-7.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i>
<< <i>This applies to vendor-to-business transactions. Not buying or selling to retail customers. >>
Today, yes. But the new law applies when businesses buy from individuals. See http://About.Ag/1099-healthcare.htm for the summary/details. >>
"Stock in trade" -- that is "inventory", is NOT subject to 1099 reporting. Nor are retail sales. These are all reported in the business' own records. 1099 forms are a "catch-all" for income NOT REPORTED ELSEWHERE... The carpet cleaning service, copy machine toner, the lawn guy.
<< <i>
<< <i>
<< <i>This applies to vendor-to-business transactions. Not buying or selling to retail customers. >>
Today, yes. But the new law applies when businesses buy from individuals. See http://About.Ag/1099-healthcare.htm for the summary/details. >>
"Stock in trade" -- that is "inventory", is NOT subject to 1099 reporting. Nor are retail sales. These are all reported in the business' own records. 1099 forms are a "catch-all" for income NOT REPORTED ELSEWHERE... The carpet cleaning service, copy machine toner, the lawn guy. >>
Are you even aware there is a new law? Have you been to About.Ag/1099-healthcare.htm?
The original law states that 1099s are required for "making payment in the course of such trade or business to another person", and it is quite clear that payments to individuals require the 1099s. The new law states that "amounts in consideration for property" need to be reported on a 1099.
Why do you think that inventory or retail sales are exempt?
<< <i>1099 forms are a "catch-all" for income NOT REPORTED ELSEWHERE... >>
I've seen that mentioned before, so I thought I would expand on that.
1099s may have been designed for that purpose (I.E. for the IRS to know about income that it might not otherwise know about), but the law doesn't say anything about that. You can't just not fill out a 1099 form simply because the income was reported elsewhere. If the law requires the form to be filled out, it must be filled out.
It's kind of like sales tax, that so many small coin dealers seem to "forget" about. Sure, many small businesses may transact business that way, but just because they do doesn't mean that it is legal or right.
But if I am wrong, and stock in trade is exempt, please do point me to a reference that states so. It is considered by the IRS to be a noncapital asset, but it is property, and the new law states property. And everyone I've heard talking about the law believes 'property' to include stock in trade.