tax tips on reporting the sale of your coins

derryb

Collectible tax tips

commoncents05

The article was written in 1999, and the tax rates are outdated.

-Paul

ranshdow

Thanks... it was a little light on the "loss" reporting side of things, though.

H&R Block's online tax filing tools did a pretty good job on handling collectibles losses, for those of us that itemize.

derryb

written in 1999 for tax law changes in 1997 that still apply.

Current Tax Rate on Collectible Assets:
Collectibles held longer than one year are taxed at a 28% rate. Short-term gains on collectibles are taxed at the ordinary income tax rates.

Raufus

<< <i>Collectible tax tips >>



Thanks, yet again, for sharing such useful information!!

derryb

<< <i>Thanks... it was a little light on the "loss" reporting side of things, though.

H&R Block's online tax filing tools did a pretty good job on handling collectibles losses, for those of us that itemize. >>


I found a flaw in H&R's software on collectibles, reported it to them and they have yet to correct it.

When using their software be aware:

When completing Schedule D you are given a "special type" selection for each line item. The problem is you can only choose one. In the case of selling a coin where you have sales expenses (ebay, paypal, postage, grading) you would normally select "collectible" and also select "other adjustment." This is where you would include the sales expenses which would subsequently reduce your taxable profit. H&R's software will not let you do both. I was told by H&R to just reduce my initial cost by the sales expenses in order to choose "special type" collectible. While the net profit numbers will come out the same doing it this way, I'm not sure an auditor would accept doing it this way. For this reason I switched to TurboTax where I am able to declare an investment as a collectible and also make adjustments for sales expenses.

Justacommeman

My schedule D looks like a novel this year. Silver sales of the long term gain variety and 25th anniversary sets on the short term side of the ledger. I did take the opportunity to sell some losers during the year in other areas to offset some of the gains.

It's a good thing my CPA doesn't charge me by the line.

MJ

CommemDude

That article implies that if you inherit a collectable there is no tax but depending on the size of your estate, who inherits the collectable, and the year you happen to die, the estate will pay up to 59% of the fair market value of the item in Federal estate tax, state estate tax, and Inheritance tax (in NJ)

Wingsrule

That article implies that if you inherit a collectable there is no tax but depending on the size of your estate, who inherits the collectable, and the year you happen to die, the estate will pay up to 59% of the fair market value of the item in Federal estate tax, state estate tax, and Inheritance tax (in NJ)

Now, now. Don't let facts get in the way of a good story!

ranshdow

Interesting... thanks again derryb.

I left all those ancillary expenses "on the table", & just used the numbers I could easily defend, eg. the original purchase and later auction invoices, to show basis and later, proceeds. I'd be reluctant to defend the costs for a trip to the sticker factory, postage, etc. as after all this is a hobby for me, with "investment" characteristics.

steveben

interesting. it makes sense to me.

oreville

As a CPA, it is my opinion that the new "sorted" capital gains and losses which is done on the new form 8949 will be a disaster for the IRS and will ultimately be rescinded in favor of the old way of preparing the capital gains and losees. It may also be a transitional one year form anyhow.

oreville

Also, be careful that the amounts reported by paypal is ONLY the unadjusted gross sales and does not include an allowable deduction for sales returns, paypal fees, currency translation fees, etc,. etc.

oreville

<< <i>It's a good thing my CPA doesn't charge me by the line. >>



Well, we ARE charging our clients MORE for doing these forms. It does indeed look like a novel (size wise).

The IRS is in effect, asking the taxpayer AND the brokerage firms AND the tax return preparer to do more work. Amazing that all three parties got more work to do at the same time.

timber100

This could be a good poll topic, question being who pays taxes on their their sales and who cheats

derryb

<< <i>As a CPA, it is my opinion that the new "sorted" capital gains and losses which is done on the new form 8949 will be a disaster for the IRS and will ultimately be rescinded in favor of the old way of preparing the capital gains and losees. It may also be a transitional one year form anyhow. >>


Maybe we will be able to get it holdered with an "only year of issue" label.



<< <i>This could be a good poll topic, question being who pays taxes on their their sales and who cheats >>


good idea, new thread started with a poll

Justacommeman

<< <i>

<< <i>It's a good thing my CPA doesn't charge me by the line. >>



Well, we ARE charging our clients MORE for doing these forms. It does indeed look like a novel (size wise).

The IRS is in effect, asking the taxpayer AND the brokerage firms AND the tax return preparer to do more work. Amazing that all three parties got more work to do at the same time. >>



Oh, I got charged more. Don't you worry

MJ