@ShaunBC5 said: @coastaljerseyguy If you’re considering it a hobby for tax purposes, that is exactly what I’m saying. No expenses are deductible for hobby income. Doesn’t sound right to me, either, which is why don’t “sell as a hobby” when it comes to taxes.
You can sell for profit, and then your expenses count.
The main thing there is you’ll have to “prove” your business and profit motive if you ever want to claim a loss on your taxes (which is fine, you just have to prove to the gov that its not a hobby)
(Everyone check with your CPA before acting on any of this officially)
I might be wrong, but I don't believe the above scenario is true.
Expenses are not deductible for a hobby, but cost basis is used to calculate the taxable income - i.e. profit - on a sale.
My understanding is that you can't deduct the general or associated costs of your hobby, and you can't deduct losses on other items you sell. But the cost basis of one particular item would decrease the taxable amount for a sale that generated a profit.
Buy a coin for $100, sell it for $150, you owe tax on $50.
JBK is correct, miscellaneous expenses are not deductible and the taxable income is the gross margin (sales less the purchase price or cost of those sales}. If the gross margin is a loss, that is the cost of the item exceeds the sales price, the loss is not deductible. I believe if you sell several items, some at a loss and some at a profit, you can aggregate the results to determine if you have a taxable income or non deductible loss for the hobby. What you can't aggregate is losses for one hobby against profits for different hobby, say coin collecting and drag racing. These are the general Hobby rules to my knowledge. If your activity is construed as a business, a different set of rules apply. I am not a CPA, so check with a professional tax preparer for advice regarding your specific situation.
I’m not being serious, but I want to discuss something I always wondered about. If I was shady, but wanted to not break any laws, could I ask my employer to pay me $1000 face value in dimes where 1 just happens to be a 1964 dime, can I report my income to IRS as $1000?
If the answer is yes, what about if 10 of the dimes just happen to be 1964 dimes. Can I still report my income as $1000?
If the answer is still yes, what if all the dimes just happen to be 1964 dimes. Can I still report the income as $1000?
If the answer is no, what if I don’t notice that the dime or dimes are 1964 and I use all the dimes to pay a grocery bill that is $1000. Would I still have to legally declare my income as more than $1000 to the IRS?
Once again, I’m not planning on doing this. Just a question regarding what is legal.
@oldabeintx said:
FYI, I sold a bunch of collectibles, mostly numismatic, on eBay several years ago. I was surprised with a 1099 or similar (I was naive). The items I sold did not have supporting documentation as they had been collected over many years. I contacted the IRS and they allowed me to estimate the cost of what was sold, they were very understanding, which was unexpected. I pretty much reported a break-even, which was a fair estimate as these were not investment quality items for the most part. I was a collector only. Don’t know if this is pertinent or if a response today would be different.
We all know there isn't any money to be made selling coins, so maybe the IRS knows this as well
A person SHOULDN'T BE TAXED on used items anyway...that item was already taxed once or a non taxable item.
A new car was whacked sales tax when it was sold and will be whacked sales tax every time it was sold after that until you maybe give it away to a friend or family. Coins and bullion are exempt from sales tax in many place, but not exempt from tax on profit made from selling them. I wonder how many include the possible taxes they could pay when they figure a price for their item/s.
Yes, one must not confuse sales tax and income tax! You might be in a state where you get a break on the sales tax.... but uncle Sam still wants his share!
@Mr_Spud said:
I’m not being serious, but I want to discuss something I always wondered about. If I was shady, but wanted to not break any laws, could I ask my employer to pay me $1000 face value in dimes where 1 just happens to be a 1964 dime, can I report my income to IRS as $1000?
If the answer is yes, what about if 10 of the dimes just happen to be 1964 dimes. Can I still report my income as $1000?
If the answer is still yes, what if all the dimes just happen to be 1964 dimes. Can I still report the income as $1000?
If the answer is no, what if I don’t notice that the dime or dimes are 1964 and I use all the dimes to pay a grocery bill that is $1000. Would I still have to legally declare my income as more than $1000 to the IRS?
Once again, I’m not planning on doing this. Just a question regarding what is legal.
Thanks
If you took that $1000 face in 1964 to your bank and wanted to deposit them into your checking account how much would they credit you for? Probably $1000. So if you're using it at face value as intended then I'd say yes.
OTOH if you went to the bank and got a roll of halves that were all silver would you tell the bank about it? I bet not. Would you come here and brag about your little windfall? I bet you would.
@Mr_Spud said:
I’m not being serious, but I want to discuss something I always wondered about. If I was shady, but wanted to not break any laws, could I ask my employer to pay me $1000 face value in dimes where 1 just happens to be a 1964 dime, can I report my income to IRS as $1000?
If the answer is yes, what about if 10 of the dimes just happen to be 1964 dimes. Can I still report my income as $1000?
If the answer is still yes, what if all the dimes just happen to be 1964 dimes. Can I still report the income as $1000?
If the answer is no, what if I don’t notice that the dime or dimes are 1964 and I use all the dimes to pay a grocery bill that is $1000. Would I still have to legally declare my income as more than $1000 to the IRS?
Once again, I’m not planning on doing this. Just a question regarding what is legal.
Thanks
Shady and Illegal. Of course if your employer reported the $1,000 to the IRS it is unlikely to be caught, but that does not make it any more right or legal!
Shady and Illegal. Of course if your employer reported the $1,000 to the IRS it is unlikely to be caught, but that does not make it any more right or legal!
Ok, thanks. But if just 1 dime is silver, and I use it to buy 10 cents worth of candy with it at a store, is it still illegal to report my income as $1000?
And, just FYI, after I milk this hypothetical a little bit longer, I’m going to ask a new hypothetical where my employer pays me $1000 in Cents, and I submit one to PCGS and it gets a pop top grade of 68+ and a PCGS value of $1000 is it legal to report my income to IRS as $1000 or do I legally have to report my income as $2000 minus one cent? And does the answer change if I crack out the 68+ coin and run it through an elongation machine at Disneyland? 😉
Shady and Illegal. Of course if your employer reported the $1,000 to the IRS it is unlikely to be caught, but that does not make it any more right or legal!
Ok, thanks. But if just 1 dime is silver, and I use it to buy 10 cents worth of candy with it at a store, is it still illegal to report my income as $1000?
And, just FYI, after I milk this hypothetical a little bit longer, I’m going to ask a new hypothetical where my employer pays me $1000 in Cents, and I submit one to PCGS and it gets a pop top grade of 68+ and a PCGS value of $1000 is it legal to report my income to IRS as $1000 or do I legally have to report my income as $2000 minus one cent? And does the answer change if I crack out the 68+ coin and run it through an elongation machine at Disneyland? 😉
So we need to differentiate between technical law and practical application. The technical law is when a company compensates you it is reported at the fair value of the compensation. So if you do a job for a company as a contractor and they pay you with a $50 gold eagle for 28 hours of work at $100 an hour, what should be reported to the IRS is the spot value of 1 oz of gold of $2,800, not the legal tender of $50. It does not matter whether you sell that gold eagle for $2,800 or go to convenience store and buy 2 cases of Budweiser and pay with the gold eagle and receive $1.98 in change. Your future spend has no impact on the fair value of the coin that you received for the job you performed. Now the practical side: If you do a 1 hour job for someone for an agreed $20 and you ask to be paid in dimes, so 200 dimes, and 10 of those dimes turn out to be silver, no-one will care. It's not material. There was not an intent to defraud the government, 10 dimes just happen to be silver. Last example, Back to the 200 dimes, the company goes to the bank and gives the teller 2 $100 bills for 200 dimes. He pays you and reports $20 of compensation. After a few weeks you go through the dimes and find a rare numismatic coin worth $17,000. Did anyone do anything wrong-no. Was there any intent to defraud the government-no. Should this windfall be reported now? I lean towards no, although I'm not 100 % positive. However, when you sell the coin you should report the sale as hobby income less the10 cents cost . Your basis in that valuable dime is ten cents. If you find a valuable coin in the parking lot and one day you sell it for say $25,000, you would have a cost of zero and report $25,000 of income at that time of sale. I don't see any difference in the 2 examples. Every day folks conduct business in cash transactions that are not reported with an intent to defraud the gov and avoid income taxes. The key from this lengthy diatribe is income earned is reported at fair value and don't do anything with an intent to defraud. Then you can be Happy and not Worry!
@Mr_Spud said:
I’m not being serious, but I want to discuss something I always wondered about. If I was shady, but wanted to not break any laws, could I ask my employer to pay me $1000 face value in dimes where 1 just happens to be a 1964 dime, can I report my income to IRS as $1000?
If the answer is yes, what about if 10 of the dimes just happen to be 1964 dimes. Can I still report my income as $1000?
If the answer is still yes, what if all the dimes just happen to be 1964 dimes. Can I still report the income as $1000?
If the answer is no, what if I don’t notice that the dime or dimes are 1964 and I use all the dimes to pay a grocery bill that is $1000. Would I still have to legally declare my income as more than $1000 to the IRS?
Once again, I’m not planning on doing this. Just a question regarding what is legal.
Thanks
As I recall, this scenario was already tested and the effort was rejected by the IRS. I think that case involved gold coins where they were trying to pass them at face value for tax purposes.
If you accidentally get a silver dime in payment I assume that's not an issue. But when you sell it for bullion value your taxable profit is proceeds minus 10 cents.
The biggest problem I see with the silver dime payments would be that your employer wants to deduct your pay from his gross. So if he has to pay 22x for your dimes, I doubt they want to only take the $1000 deduction.
@bigjpst said:
The biggest problem I see with the silver dime payments would be that your employer wants to deduct your pay from his gross. So if he has to pay 22x for your dimes, I doubt they want to only take the $1000 deduction.
@BAJJERFAN said:
If you sold coins or other items AS A HOBBY, the IRS says that you should report your income on schedule C. If you received a 1099-K through eBay, Mercari, etc. is it sufficient to report your 1099-K income on line 1 and your accumulated expenses on line 42 and leave everything else blank? Not claiming any business expenses other than gross cost of merchandise which includes item cost, sales tax, listing fees. PP fees and shipping.
If you sell on eBay and take PayPal will you get a 1099-K from both? If you get one from both should you only need to claim the income from one of the two?
I suppose the online filing places like TurboTax and IRS free file partners should already have the required items incorporated into their online software.
I am a CPA with a tax practice and will provide the following info. I will not respond to any inquiries.
If you are making a net profit consistently doing anything, it is treated as a business. If you are actively involved in the business and did not set up a corporation, file a Federal Schedule C.
Buying and selling coins in this case is considered a stock in trade, you are not dealing with collectibles.
Collectibles code sections come into place if you have a few coin sales here and there.
1099-Ks report receipts from certain payment processors. They are NOT all inclusive re your gross receipts. IE., if you sell me a coin for $2,000, you're not getting a 1099-K, but you should include that $2,000 sale in your gross receipts.
Cost of coins should be listed under the cost of sales section. List other expenses individually on the expense portion of the Schedule C. More detail provided means less chances of getting a return pulled for additional inquiry.
I am also a CPA with a tax practice. and agree with Elcontador.
I would add one piece of advice. Unless you really know what you are doing stay away from turbo tax to report sales of coins and instead use a local CPA. But suggest you calculate the worst case scenario tax-wise and file and pay the full tax with an extension to October 15th, Seek the CPA now but schedule the appointment for when he is not crazy busy and he can pay more attention to your questions and possibly even charge you less as he would be thankful that you waited until after April 15th to see him or her.
Careful, even some tax CPA’s do not know the tax laws relating to collectibles.
One other thing that coin collectors do not seem to know! There is no longer a tax deferred barter of coins in exchange for other coins!
@BAJJERFAN said:
If you sold coins or other items AS A HOBBY, the IRS says that you should report your income on schedule C. If you received a 1099-K through eBay, Mercari, etc. is it sufficient to report your 1099-K income on line 1 and your accumulated expenses on line 42 and leave everything else blank? Not claiming any business expenses other than gross cost of merchandise which includes item cost, sales tax, listing fees. PP fees and shipping.
If you sell on eBay and take PayPal will you get a 1099-K from both? If you get one from both should you only need to claim the income from one of the two?
I suppose the online filing places like TurboTax and IRS free file partners should already have the required items incorporated into their online software.
I am a CPA with a tax practice and will provide the following info. I will not respond to any inquiries.
If you are making a net profit consistently doing anything, it is treated as a business. If you are actively involved in the business and did not set up a corporation, file a Federal Schedule C.
Buying and selling coins in this case is considered a stock in trade, you are not dealing with collectibles.
Collectibles code sections come into place if you have a few coin sales here and there.
1099-Ks report receipts from certain payment processors. They are NOT all inclusive re your gross receipts. IE., if you sell me a coin for $2,000, you're not getting a 1099-K, but you should include that $2,000 sale in your gross receipts.
Cost of coins should be listed under the cost of sales section. List other expenses individually on the expense portion of the Schedule C. More detail provided means less chances of getting a return pulled for additional inquiry.
I am also a CPA with a tax practice. and agree with Elcontador.
I would add one piece of advice. Unless you really know what you are doing stay away from turbo tax to report sales of coins and use a local CPA. But suggest you calculate the worst case scenario tax wise and file and pay the full tax with an extension. Seek the CPA when he is not crazy busy and he can pay more attention to your questions and pissibly even charge you less as he would be thankful that you waited until after April 15th to see him or her.
Careful, even some tax CPA’s do not know the tax laws relating to collectibles.
One other thing that coin collectors do not seem to know! There is no longer a tax deferred barter of coins in exchange for other coins!
Speaking of trades, that reminds me question I’ve been meaning to ask. Say theoretically that a collector wants to use gold eagles as payment for another coin, and both parties agree to value them at melt. How would the dealer correctly report that transaction, especially if they don’t liquidate the eagles?
Separately, how about the same situation if numismatic coins are used instead? I imagine it’s always preferred to just make it two separate transactions, but suppose liquidity is an obstacle and it’s not possible to make the bank records match?
@BAJJERFAN said:
If you sold coins or other items AS A HOBBY, the IRS says that you should report your income on schedule C. If you received a 1099-K through eBay, Mercari, etc. is it sufficient to report your 1099-K income on line 1 and your accumulated expenses on line 42 and leave everything else blank? Not claiming any business expenses other than gross cost of merchandise which includes item cost, sales tax, listing fees. PP fees and shipping.
If you sell on eBay and take PayPal will you get a 1099-K from both? If you get one from both should you only need to claim the income from one of the two?
I suppose the online filing places like TurboTax and IRS free file partners should already have the required items incorporated into their online software.
I am a CPA with a tax practice and will provide the following info. I will not respond to any inquiries.
If you are making a net profit consistently doing anything, it is treated as a business. If you are actively involved in the business and did not set up a corporation, file a Federal Schedule C.
Buying and selling coins in this case is considered a stock in trade, you are not dealing with collectibles.
Collectibles code sections come into place if you have a few coin sales here and there.
1099-Ks report receipts from certain payment processors. They are NOT all inclusive re your gross receipts. IE., if you sell me a coin for $2,000, you're not getting a 1099-K, but you should include that $2,000 sale in your gross receipts.
Cost of coins should be listed under the cost of sales section. List other expenses individually on the expense portion of the Schedule C. More detail provided means less chances of getting a return pulled for additional inquiry.
I am also a CPA with a tax practice. and agree with Elcontador.
I would add one piece of advice. Unless you really know what you are doing stay away from turbo tax to report sales of coins and use a local CPA. But suggest you calculate the worst case scenario tax wise and file and pay the full tax with an extension. Seek the CPA when he is not crazy busy and he can pay more attention to your questions and pissibly even charge you less as he would be thankful that you waited until after April 15th to see him or her.
Careful, even some tax CPA’s do not know the tax laws relating to collectibles.
One other thing that coin collectors do not seem to know! There is no longer a tax deferred barter of coins in exchange for other coins!
Speaking of trades, that reminds me question I’ve been meaning to ask. Say theoretically that a collector wants to use gold eagles as payment for another coin, and both parties agree to value them at melt. How would the dealer correctly report that transaction, especially if they don’t liquidate the eagles?
Separately, how about the same situation if numismatic coins are used instead? I imagine it’s always preferred to just make it two separate transactions, but suppose liquidity is an obstacle and it’s not possible to make the bank records match?
Probably not the legal way, but i don't think I'd report it. It's essentially trading $10k in inventory for $10k in inventory. Kind of a lateral move
@BAJJERFAN said:
If you sold coins or other items AS A HOBBY, the IRS says that you should report your income on schedule C. If you received a 1099-K through eBay, Mercari, etc. is it sufficient to report your 1099-K income on line 1 and your accumulated expenses on line 42 and leave everything else blank? Not claiming any business expenses other than gross cost of merchandise which includes item cost, sales tax, listing fees. PP fees and shipping.
If you sell on eBay and take PayPal will you get a 1099-K from both? If you get one from both should you only need to claim the income from one of the two?
I suppose the online filing places like TurboTax and IRS free file partners should already have the required items incorporated into their online software.
I am a CPA with a tax practice and will provide the following info. I will not respond to any inquiries.
If you are making a net profit consistently doing anything, it is treated as a business. If you are actively involved in the business and did not set up a corporation, file a Federal Schedule C.
Buying and selling coins in this case is considered a stock in trade, you are not dealing with collectibles.
Collectibles code sections come into place if you have a few coin sales here and there.
1099-Ks report receipts from certain payment processors. They are NOT all inclusive re your gross receipts. IE., if you sell me a coin for $2,000, you're not getting a 1099-K, but you should include that $2,000 sale in your gross receipts.
Cost of coins should be listed under the cost of sales section. List other expenses individually on the expense portion of the Schedule C. More detail provided means less chances of getting a return pulled for additional inquiry.
I am also a CPA with a tax practice. and agree with Elcontador.
I would add one piece of advice. Unless you really know what you are doing stay away from turbo tax to report sales of coins and use a local CPA. But suggest you calculate the worst case scenario tax wise and file and pay the full tax with an extension. Seek the CPA when he is not crazy busy and he can pay more attention to your questions and pissibly even charge you less as he would be thankful that you waited until after April 15th to see him or her.
Careful, even some tax CPA’s do not know the tax laws relating to collectibles.
One other thing that coin collectors do not seem to know! There is no longer a tax deferred barter of coins in exchange for other coins!
Speaking of trades, that reminds me question I’ve been meaning to ask. Say theoretically that a collector wants to use gold eagles as payment for another coin, and both parties agree to value them at melt. How would the dealer correctly report that transaction, especially if they don’t liquidate the eagles?
Separately, how about the same situation if numismatic coins are used instead? I imagine it’s always preferred to just make it two separate transactions, but suppose liquidity is an obstacle and it’s not possible to make the bank records match?
Probably not the legal way, but i don't think I'd report it. It's essentially trading $10k in inventory for $10k in inventory. Kind of a lateral move
what if the coin that was traded for the two eagles was acquired for say $4k and the two eagles have a melt of $5,600 (todays spot). Effectively, dealer made a$1,600 profit. Is that reportable as profit and purchase cost of the 2 eagles is the $5,600 or do you roll the $4,600 basis of the coin as the new basis of the two eagles and don't report income . If i understand what @oreville said, It would seem like the former is the proper IRS treatment.
@BAJJERFAN said:
If you sold coins or other items AS A HOBBY, the IRS says that you should report your income on schedule C. If you received a 1099-K through eBay, Mercari, etc. is it sufficient to report your 1099-K income on line 1 and your accumulated expenses on line 42 and leave everything else blank? Not claiming any business expenses other than gross cost of merchandise which includes item cost, sales tax, listing fees. PP fees and shipping.
If you sell on eBay and take PayPal will you get a 1099-K from both? If you get one from both should you only need to claim the income from one of the two?
I suppose the online filing places like TurboTax and IRS free file partners should already have the required items incorporated into their online software.
I am a CPA with a tax practice and will provide the following info. I will not respond to any inquiries.
If you are making a net profit consistently doing anything, it is treated as a business. If you are actively involved in the business and did not set up a corporation, file a Federal Schedule C.
Buying and selling coins in this case is considered a stock in trade, you are not dealing with collectibles.
Collectibles code sections come into place if you have a few coin sales here and there.
1099-Ks report receipts from certain payment processors. They are NOT all inclusive re your gross receipts. IE., if you sell me a coin for $2,000, you're not getting a 1099-K, but you should include that $2,000 sale in your gross receipts.
Cost of coins should be listed under the cost of sales section. List other expenses individually on the expense portion of the Schedule C. More detail provided means less chances of getting a return pulled for additional inquiry.
I am also a CPA with a tax practice. and agree with Elcontador.
I would add one piece of advice. Unless you really know what you are doing stay away from turbo tax to report sales of coins and use a local CPA. But suggest you calculate the worst case scenario tax wise and file and pay the full tax with an extension. Seek the CPA when he is not crazy busy and he can pay more attention to your questions and pissibly even charge you less as he would be thankful that you waited until after April 15th to see him or her.
Careful, even some tax CPA’s do not know the tax laws relating to collectibles.
One other thing that coin collectors do not seem to know! There is no longer a tax deferred barter of coins in exchange for other coins!
Speaking of trades, that reminds me question I’ve been meaning to ask. Say theoretically that a collector wants to use gold eagles as payment for another coin, and both parties agree to value them at melt. How would the dealer correctly report that transaction, especially if they don’t liquidate the eagles?
Separately, how about the same situation if numismatic coins are used instead? I imagine it’s always preferred to just make it two separate transactions, but suppose liquidity is an obstacle and it’s not possible to make the bank records match?
Probably not the legal way, but i don't think I'd report it. It's essentially trading $10k in inventory for $10k in inventory. Kind of a lateral move
what if the coin that was traded for the two eagles was acquired for say $4k and the two eagles have a melt of $5,600 (todays spot). Effectively, dealer made a$1,600 profit. Is that reportable as profit and purchase cost of the 2 eagles is the $5,600 or do you roll the $4,600 basis of the coin as the new basis of the two eagles and don't report income . If i understand what @oreville said, It would seem like the former is the proper IRS treatment.
Technically, there is a barter profit. So it really should be booked that way. But in practice, there is no realized profit until sale, so it's more pay me now or pay me later.
As I said, I'm pretty sure it's not the technically legal way, but you end up paying the same tax either way. You either book the trade now and put the cost basis if the eagles at $5600 or you leave them in inventory at a cost basis of $4k. Either way you pay tax on the $1600 profit.
This is one of the reasons i hate trades. I don't get any cash but potentially owe tax on a paper profit that is still in inventory. For gold, no big deal, it's liquid. But it's the comic book guys that are constantly trying to make trades. I can't pay bills with comic books.
When I spoke of bartering rules, I was referring to the coin collector not the dealer.
However, that being said,when a dealer exchanges one kind of coin in inventory for another, he does not recognize any income until he liquidates his coin inventory for actual US funds OR coins valued within 90% of precious metal melt value. Receiving coins with a high melt value is considered as receiving cash by the IRS.
Coin collectors, even coin investors used to be allowed to barter coins tax deferred until nearly 10 years ago in which section 1031 like-kind exchanges was made more restrictive by the IRS to only permit exchanges of real estate.
@Bochiman said:
What do companies like Greatcollections, Apmex, etc, send, if anything, to the IRS when you sell to them? What amount would trigger anything?
Does GC buy coins? When they or Heritage, etc. sell for you there is no 1099 because they never took ownership of your coins. If you sell certain bullion items like AGEs to APMEX they are tax exempt as discussed here in the past. Leafs and Krugs not so much, but there are quantity limits for those. Check the SD Bullion site and others for specifics.
@Bochiman said:
What do companies like Greatcollections, Apmex, etc, send, if anything, to the IRS when you sell to them? What amount would trigger anything?
Does GC buy coins? When they or Heritage, etc. sell for you there is no 1099 because they never took ownership of your coins. If you sell certain bullion items like AGEs to APMEX they are tax exempt as discussed here in the past. Leafs and Krugs not so much, but there are quantity limits for those. Check the SD Bullion site and others for specifics.
GC does, In fact, buy coins… but that’s neither here nor there. They did “take ownership” because they receive a payment from the buyer and issue a payment to the seller. The reason they don’t issue 1099s is because they choose not to, and however the business is structured, they evidently are not required to. Judging by the sentiment towards 1099s expressed by collectors, I can understand why they would avoid doing so.
@Bochiman said:
What do companies like Greatcollections, Apmex, etc, send, if anything, to the IRS when you sell to them? What amount would trigger anything?
Does GC buy coins? When they or Heritage, etc. sell for you there is no 1099 because they never took ownership of your coins. If you sell certain bullion items like AGEs to APMEX they are tax exempt as discussed here in the past. Leafs and Krugs not so much, but there are quantity limits for those. Check the SD Bullion site and others for specifics.
GC does, In fact, buy coins… but that’s neither here nor there. They did “take ownership” because they receive a payment from the buyer and issue a payment to the seller. The reason they don’t issue 1099s is because they choose not to, and however the business is structured, they evidently are not required to. Judging by the sentiment towards 1099s expressed by collectors, I can understand why they would avoid doing so.
Is the sentiment against 1099s or in favor of tax evasion?
@Bochiman said:
What do companies like Greatcollections, Apmex, etc, send, if anything, to the IRS when you sell to them? What amount would trigger anything?
Does GC buy coins? When they or Heritage, etc. sell for you there is no 1099 because they never took ownership of your coins. If you sell certain bullion items like AGEs to APMEX they are tax exempt as discussed here in the past. Leafs and Krugs not so much, but there are quantity limits for those. Check the SD Bullion site and others for specifics.
Ebay and PayPal don't take ownership, either, and they issue 1099s.
Also, certain states do tax profits on bullion and they use the 1099s to see who might have reportable income. In fact, certain states have a lower threshold for 1099 issuance and eBay, etc. honors that.
I agree that some operations don't issue them, but I don't understand why.
@Bochiman said:
What do companies like Greatcollections, Apmex, etc, send, if anything, to the IRS when you sell to them? What amount would trigger anything?
Does GC buy coins? When they or Heritage, etc. sell for you there is no 1099 because they never took ownership of your coins. If you sell certain bullion items like AGEs to APMEX they are tax exempt as discussed here in the past. Leafs and Krugs not so much, but there are quantity limits for those. Check the SD Bullion site and others for specifics.
GC does, In fact, buy coins… but that’s neither here nor there. They did “take ownership” because they receive a payment from the buyer and issue a payment to the seller. The reason they don’t issue 1099s is because they choose not to, and however the business is structured, they evidently are not required to. Judging by the sentiment towards 1099s expressed by collectors, I can understand why they would avoid doing so.
Do you issue a 1099 to every individual who you buy a $600 + coin from? I bet not and I bet most dealers don't. When you issue a 1099 you are getting something in return for it whether it be rent, goods, services, etc. Now that I think of it the reason espoused here for Heritage et al not giving a 1099 is because they are giving you YOUR money, not theirs. They are custodians of your coins and they never take ownership IMO. It's on you to report the sales on your tax return. If you netted $100K after sales, nobody would really know unless you were audited and they asked to see your bank records. Maybe Mark Feld will chime in.
Places like PP, eBay, etc. give you 1099s because I believe the IRS specifically requires them to. Too many using those venues as a business and not reporting.
I remember when there was a "feeding frenzy" over buying mint products and selling them to the sharks. A couple asked for SSNs as I recall, but I never gave mine.
BTW I was told by a retired accountant friend that the IRS doesn't get around to matching 1099s, W-2s with returns until August or later. With the new administration it might be never, A few years ago I unintentionally omitted a 1099 and neither the IRS nor my state revenue dept caught it.
@Bochiman said:
What do companies like Greatcollections, Apmex, etc, send, if anything, to the IRS when you sell to them? What amount would trigger anything?
Does GC buy coins? When they or Heritage, etc. sell for you there is no 1099 because they never took ownership of your coins. If you sell certain bullion items like AGEs to APMEX they are tax exempt as discussed here in the past. Leafs and Krugs not so much, but there are quantity limits for those. Check the SD Bullion site and others for specifics.
Ebay and PayPal don't take ownership, either, and they issue 1099s.
Also, certain states do tax profits on bullion and they use the 1099s to see who might have reportable income. In fact, certain states have a lower threshold for 1099 issuance and eBay, etc. honors that.
I agree that some operations don't issue them, but I don't understand why.
Don't 100% of states tax profits on bullion. Who doesn't?
Edited to add: apparently Nebraska and Alabama don't as of last year. I stand corrected and shocked.
@Bochiman said:
What do companies like Greatcollections, Apmex, etc, send, if anything, to the IRS when you sell to them? What amount would trigger anything?
Does GC buy coins? When they or Heritage, etc. sell for you there is no 1099 because they never took ownership of your coins. If you sell certain bullion items like AGEs to APMEX they are tax exempt as discussed here in the past. Leafs and Krugs not so much, but there are quantity limits for those. Check the SD Bullion site and others for specifics.
Ebay and PayPal don't take ownership, either, and they issue 1099s.
Also, certain states do tax profits on bullion and they use the 1099s to see who might have reportable income. In fact, certain states have a lower threshold for 1099 issuance and eBay, etc. honors that.
I agree that some operations don't issue them, but I don't understand why.
EBay and Paypal are using 1099s due to payment processing not sales.
Per the Great Collections Website:
"Are Consignor's Auction Sales Reported to the IRS?
Ian Russell on Sat, Nov 30, 2024 6:52:21 AM
At GreatCollections, we do not report any sales of our consignors to the IRS or tax authorities, as we are not required to. Any tax reporting is up to the consignor, and we recommend talking to your CPA or tax professional about reporting that may be required by you.
Every few years, the government comes up with a new bill that would require auction houses to report sales of consignors to the IRS, however, so far they have been fought by the auction industry and have not been written into any law. If this changes in the future, we will definitely let all of our consignors know."
@JW77 said:
Per the Great Collections Website:
"Are Consignor's Auction Sales Reported to the IRS?
Ian Russell on Sat, Nov 30, 2024 6:52:21 AM
At GreatCollections, we do not report any sales of our consignors to the IRS or tax authorities, as we are not required to. Any tax reporting is up to the consignor, and we recommend talking to your CPA or tax professional about reporting that may be required by you.
Every few years, the government comes up with a new bill that would require auction houses to report sales of consignors to the IRS, however, so far they have been fought by the auction industry and have not been written into any law. If this changes in the future, we will definitely let all of our consignors know."
He didn't elaborate as to why they are not required to, but maybe he will here.
@Bochiman said:
What do companies like Greatcollections, Apmex, etc, send, if anything, to the IRS when you sell to them? What amount would trigger anything?
Does GC buy coins? When they or Heritage, etc. sell for you there is no 1099 because they never took ownership of your coins. If you sell certain bullion items like AGEs to APMEX they are tax exempt as discussed here in the past. Leafs and Krugs not so much, but there are quantity limits for those. Check the SD Bullion site and others for specifics.
Ebay and PayPal don't take ownership, either, and they issue 1099s.
Also, certain states do tax profits on bullion and they use the 1099s to see who might have reportable income. In fact, certain states have a lower threshold for 1099 issuance and eBay, etc. honors that.
I agree that some operations don't issue them, but I don't understand why.
100% of states tax profits on bullion. Who doesn't?
Mine does so I don't have a personal need to learn about the others. 🙂
@Bochiman said:
What do companies like Greatcollections, Apmex, etc, send, if anything, to the IRS when you sell to them? What amount would trigger anything?
Does GC buy coins? When they or Heritage, etc. sell for you there is no 1099 because they never took ownership of your coins. If you sell certain bullion items like AGEs to APMEX they are tax exempt as discussed here in the past. Leafs and Krugs not so much, but there are quantity limits for those. Check the SD Bullion site and others for specifics.
Ebay and PayPal don't take ownership, either, and they issue 1099s.
Also, certain states do tax profits on bullion and they use the 1099s to see who might have reportable income. In fact, certain states have a lower threshold for 1099 issuance and eBay, etc. honors that.
I agree that some operations don't issue them, but I don't understand why.
100% of states tax profits on bullion. Who doesn't?
Mine does so I don't have a personal need to learn about the others. 🙂
What state is that? I find it hard to believe that any state doesn't tax cap gains on bullion.
Apparently Nebraska and Alabama don't as of last year... I'm shocked
@Bochiman said:
What do companies like Greatcollections, Apmex, etc, send, if anything, to the IRS when you sell to them? What amount would trigger anything?
Does GC buy coins? When they or Heritage, etc. sell for you there is no 1099 because they never took ownership of your coins. If you sell certain bullion items like AGEs to APMEX they are tax exempt as discussed here in the past. Leafs and Krugs not so much, but there are quantity limits for those. Check the SD Bullion site and others for specifics.
GC does, In fact, buy coins… but that’s neither here nor there. They did “take ownership” because they receive a payment from the buyer and issue a payment to the seller. The reason they don’t issue 1099s is because they choose not to, and however the business is structured, they evidently are not required to. Judging by the sentiment towards 1099s expressed by collectors, I can understand why they would avoid doing so.
Do you issue a 1099 to every individual who you buy a $600 + coin from? I bet not and I bet most dealers don't. When you issue a 1099 you are getting something in return for it whether it be rent, goods, services, etc. Now that I think of it the reason espoused here for Heritage et al not giving a 1099 is because they are giving you YOUR money, not theirs. They are custodians of your coins and they never take ownership IMO. It's on you to report the sales on your tax return. If you netted $100K after sales, nobody would really know unless you were audited and they asked to see your bank records. Maybe Mark Feld will chime in.
Places like PP, eBay, etc. give you 1099s because I believe the IRS specifically requires them to. Too many using those venues as a business and not reporting.
I remember when there was a "feeding frenzy" over buying mint products and selling them to the sharks. A couple asked for SSNs as I recall, but I never gave mine.
BTW I was told by a retired accountant friend that the IRS doesn't get around to matching 1099s, W-2s with returns until August or later. With the new administration it might be never, A few years ago I unintentionally omitted a 1099 and neither the IRS nor my state revenue dept caught it.
And what about the coins that GC does buy and own, and consign to the auctions? They still don't issue 1099's for those. The point I was making is that the "take ownership" distinction you're trying to draw is evidently not what matters, heritage's balance sheet would look the same. If you look at the books, there's money in, money out and a profit. You couldn't discern what's "your money" and "their money" in a bank account with millions of dollars coming in and out. Do you really think Heritage doesn't own any of the coins in their auctions? What about all the dealers, including myself, who also "take ownership"? Neither of which requires 1099s to be issued. That's what I'm getting at, apparently there's some other factor that makes the difference.
@Bochiman said:
What do companies like Greatcollections, Apmex, etc, send, if anything, to the IRS when you sell to them? What amount would trigger anything?
Does GC buy coins? When they or Heritage, etc. sell for you there is no 1099 because they never took ownership of your coins. If you sell certain bullion items like AGEs to APMEX they are tax exempt as discussed here in the past. Leafs and Krugs not so much, but there are quantity limits for those. Check the SD Bullion site and others for specifics.
Ebay and PayPal don't take ownership, either, and they issue 1099s.
Also, certain states do tax profits on bullion and they use the 1099s to see who might have reportable income. In fact, certain states have a lower threshold for 1099 issuance and eBay, etc. honors that.
I agree that some operations don't issue them, but I don't understand why.
Don't 100% of states tax profits on bullion. Who doesn't?
Edited to add: apparently Nebraska and Alabama don't as of last year. I stand corrected and shocked.
My state (Florida) doesn't have an income tax and neither does a few other states.
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
@Bochiman said:
What do companies like Greatcollections, Apmex, etc, send, if anything, to the IRS when you sell to them? What amount would trigger anything?
Does GC buy coins? When they or Heritage, etc. sell for you there is no 1099 because they never took ownership of your coins. If you sell certain bullion items like AGEs to APMEX they are tax exempt as discussed here in the past. Leafs and Krugs not so much, but there are quantity limits for those. Check the SD Bullion site and others for specifics.
Ebay and PayPal don't take ownership, either, and they issue 1099s.
Also, certain states do tax profits on bullion and they use the 1099s to see who might have reportable income. In fact, certain states have a lower threshold for 1099 issuance and eBay, etc. honors that.
I agree that some operations don't issue them, but I don't understand why.
Don't 100% of states tax profits on bullion. Who doesn't?
Edited to add: apparently Nebraska and Alabama don't as of last year. I stand corrected and shocked.
My state (Florida) doesn't have an income tax and neither does a few other states.
I was thinking, based on the way it was phrased, that he was talking about a bullion exemption. But, you're right, he could have just meant no income tax.
@Bochiman said:
What do companies like Greatcollections, Apmex, etc, send, if anything, to the IRS when you sell to them? What amount would trigger anything?
Does GC buy coins? When they or Heritage, etc. sell for you there is no 1099 because they never took ownership of your coins. If you sell certain bullion items like AGEs to APMEX they are tax exempt as discussed here in the past. Leafs and Krugs not so much, but there are quantity limits for those. Check the SD Bullion site and others for specifics.
GC does, In fact, buy coins… but that’s neither here nor there. They did “take ownership” because they receive a payment from the buyer and issue a payment to the seller. The reason they don’t issue 1099s is because they choose not to, and however the business is structured, they evidently are not required to. Judging by the sentiment towards 1099s expressed by collectors, I can understand why they would avoid doing so.
Do you issue a 1099 to every individual who you buy a $600 + coin from? I bet not and I bet most dealers don't. When you issue a 1099 you are getting something in return for it whether it be rent, goods, services, etc. Now that I think of it the reason espoused here for Heritage et al not giving a 1099 is because they are giving you YOUR money, not theirs. They are custodians of your coins and they never take ownership IMO. It's on you to report the sales on your tax return. If you netted $100K after sales, nobody would really know unless you were audited and they asked to see your bank records. Maybe Mark Feld will chime in.
Places like PP, eBay, etc. give you 1099s because I believe the IRS specifically requires them to. Too many using those venues as a business and not reporting.
I remember when there was a "feeding frenzy" over buying mint products and selling them to the sharks. A couple asked for SSNs as I recall, but I never gave mine.
BTW I was told by a retired accountant friend that the IRS doesn't get around to matching 1099s, W-2s with returns until August or later. With the new administration it might be never, A few years ago I unintentionally omitted a 1099 and neither the IRS nor my state revenue dept caught it.
And what about the coins that GC does buy and own, and consign to the auctions? They still don't issue 1099's for those. The point I was making is that the "take ownership" distinction you're trying to draw is evidently not what matters, heritage's balance sheet would look the same. If you look at the books, there's money in, money out and a profit. You couldn't discern what's "your money" and "their money" in a bank account with millions of dollars coming in and out. Do you really think Heritage doesn't own any of the coins in their auctions? What about all the dealers, including myself, who also "take ownership"? Neither of which requires 1099s to be issued. That's what I'm getting at, apparently there's some other factor that makes the difference.
People are focusing on sales and purchases. The 1099 is for alternate income payments not all purchases.
@Bochiman said:
What do companies like Greatcollections, Apmex, etc, send, if anything, to the IRS when you sell to them? What amount would trigger anything?
Does GC buy coins? When they or Heritage, etc. sell for you there is no 1099 because they never took ownership of your coins. If you sell certain bullion items like AGEs to APMEX they are tax exempt as discussed here in the past. Leafs and Krugs not so much, but there are quantity limits for those. Check the SD Bullion site and others for specifics.
GC does, In fact, buy coins… but that’s neither here nor there. They did “take ownership” because they receive a payment from the buyer and issue a payment to the seller. The reason they don’t issue 1099s is because they choose not to, and however the business is structured, they evidently are not required to. Judging by the sentiment towards 1099s expressed by collectors, I can understand why they would avoid doing so.
Do you issue a 1099 to every individual who you buy a $600 + coin from? I bet not and I bet most dealers don't. When you issue a 1099 you are getting something in return for it whether it be rent, goods, services, etc. Now that I think of it the reason espoused here for Heritage et al not giving a 1099 is because they are giving you YOUR money, not theirs. They are custodians of your coins and they never take ownership IMO. It's on you to report the sales on your tax return. If you netted $100K after sales, nobody would really know unless you were audited and they asked to see your bank records. Maybe Mark Feld will chime in.
Places like PP, eBay, etc. give you 1099s because I believe the IRS specifically requires them to. Too many using those venues as a business and not reporting.
I remember when there was a "feeding frenzy" over buying mint products and selling them to the sharks. A couple asked for SSNs as I recall, but I never gave mine.
BTW I was told by a retired accountant friend that the IRS doesn't get around to matching 1099s, W-2s with returns until August or later. With the new administration it might be never, A few years ago I unintentionally omitted a 1099 and neither the IRS nor my state revenue dept caught it.
And what about the coins that GC does buy and own, and consign to the auctions? They still don't issue 1099's for those. The point I was making is that the "take ownership" distinction you're trying to draw is evidently not what matters, heritage's balance sheet would look the same. If you look at the books, there's money in, money out and a profit. You couldn't discern what's "your money" and "their money" in a bank account with millions of dollars coming in and out. Do you really think Heritage doesn't own any of the coins in their auctions? What about all the dealers, including myself, who also "take ownership"? Neither of which requires 1099s to be issued. That's what I'm getting at, apparently there's some other factor that makes the difference.
I was talking about consignment coins. In that case the "their" money is the commish and juice. What they buy and sell or auction off would be of no concern to me. If they issued a 1099 for every $2500 coin that they bought it would take one person to keep track of it all. The sheer volume of 1099s for both Heritage and the IRS is probably why they aren't required. BTW are set up to issue a 1099 electronically if needed or would you use snailmail?
@Bochiman said:
What do companies like Greatcollections, Apmex, etc, send, if anything, to the IRS when you sell to them? What amount would trigger anything?
Does GC buy coins? When they or Heritage, etc. sell for you there is no 1099 because they never took ownership of your coins. If you sell certain bullion items like AGEs to APMEX they are tax exempt as discussed here in the past. Leafs and Krugs not so much, but there are quantity limits for those. Check the SD Bullion site and others for specifics.
GC does, In fact, buy coins… but that’s neither here nor there. They did “take ownership” because they receive a payment from the buyer and issue a payment to the seller. The reason they don’t issue 1099s is because they choose not to, and however the business is structured, they evidently are not required to. Judging by the sentiment towards 1099s expressed by collectors, I can understand why they would avoid doing so.
Do you issue a 1099 to every individual who you buy a $600 + coin from? I bet not and I bet most dealers don't. When you issue a 1099 you are getting something in return for it whether it be rent, goods, services, etc. Now that I think of it the reason espoused here for Heritage et al not giving a 1099 is because they are giving you YOUR money, not theirs. They are custodians of your coins and they never take ownership IMO. It's on you to report the sales on your tax return. If you netted $100K after sales, nobody would really know unless you were audited and they asked to see your bank records. Maybe Mark Feld will chime in.
Places like PP, eBay, etc. give you 1099s because I believe the IRS specifically requires them to. Too many using those venues as a business and not reporting.
I remember when there was a "feeding frenzy" over buying mint products and selling them to the sharks. A couple asked for SSNs as I recall, but I never gave mine.
BTW I was told by a retired accountant friend that the IRS doesn't get around to matching 1099s, W-2s with returns until August or later. With the new administration it might be never, A few years ago I unintentionally omitted a 1099 and neither the IRS nor my state revenue dept caught it.
And what about the coins that GC does buy and own, and consign to the auctions? They still don't issue 1099's for those. The point I was making is that the "take ownership" distinction you're trying to draw is evidently not what matters, heritage's balance sheet would look the same. If you look at the books, there's money in, money out and a profit. You couldn't discern what's "your money" and "their money" in a bank account with millions of dollars coming in and out. Do you really think Heritage doesn't own any of the coins in their auctions? What about all the dealers, including myself, who also "take ownership"? Neither of which requires 1099s to be issued. That's what I'm getting at, apparently there's some other factor that makes the difference.
People are focusing on sales and purchases. The 1099 is for alternate income payments not all purchases.
@Bochiman said:
What do companies like Greatcollections, Apmex, etc, send, if anything, to the IRS when you sell to them? What amount would trigger anything?
Does GC buy coins? When they or Heritage, etc. sell for you there is no 1099 because they never took ownership of your coins. If you sell certain bullion items like AGEs to APMEX they are tax exempt as discussed here in the past. Leafs and Krugs not so much, but there are quantity limits for those. Check the SD Bullion site and others for specifics.
GC does, In fact, buy coins… but that’s neither here nor there. They did “take ownership” because they receive a payment from the buyer and issue a payment to the seller. The reason they don’t issue 1099s is because they choose not to, and however the business is structured, they evidently are not required to. Judging by the sentiment towards 1099s expressed by collectors, I can understand why they would avoid doing so.
Do you issue a 1099 to every individual who you buy a $600 + coin from? I bet not and I bet most dealers don't. When you issue a 1099 you are getting something in return for it whether it be rent, goods, services, etc. Now that I think of it the reason espoused here for Heritage et al not giving a 1099 is because they are giving you YOUR money, not theirs. They are custodians of your coins and they never take ownership IMO. It's on you to report the sales on your tax return. If you netted $100K after sales, nobody would really know unless you were audited and they asked to see your bank records. Maybe Mark Feld will chime in.
Places like PP, eBay, etc. give you 1099s because I believe the IRS specifically requires them to. Too many using those venues as a business and not reporting.
I remember when there was a "feeding frenzy" over buying mint products and selling them to the sharks. A couple asked for SSNs as I recall, but I never gave mine.
BTW I was told by a retired accountant friend that the IRS doesn't get around to matching 1099s, W-2s with returns until August or later. With the new administration it might be never, A few years ago I unintentionally omitted a 1099 and neither the IRS nor my state revenue dept caught it.
And what about the coins that GC does buy and own, and consign to the auctions? They still don't issue 1099's for those. The point I was making is that the "take ownership" distinction you're trying to draw is evidently not what matters, heritage's balance sheet would look the same. If you look at the books, there's money in, money out and a profit. You couldn't discern what's "your money" and "their money" in a bank account with millions of dollars coming in and out. Do you really think Heritage doesn't own any of the coins in their auctions? What about all the dealers, including myself, who also "take ownership"? Neither of which requires 1099s to be issued. That's what I'm getting at, apparently there's some other factor that makes the difference.
People are focusing on sales and purchases. The 1099 is for alternate income payments not all purchases.
@Bochiman said:
What do companies like Greatcollections, Apmex, etc, send, if anything, to the IRS when you sell to them? What amount would trigger anything?
Does GC buy coins? When they or Heritage, etc. sell for you there is no 1099 because they never took ownership of your coins. If you sell certain bullion items like AGEs to APMEX they are tax exempt as discussed here in the past. Leafs and Krugs not so much, but there are quantity limits for those. Check the SD Bullion site and others for specifics.
GC does, In fact, buy coins… but that’s neither here nor there. They did “take ownership” because they receive a payment from the buyer and issue a payment to the seller. The reason they don’t issue 1099s is because they choose not to, and however the business is structured, they evidently are not required to. Judging by the sentiment towards 1099s expressed by collectors, I can understand why they would avoid doing so.
Do you issue a 1099 to every individual who you buy a $600 + coin from? I bet not and I bet most dealers don't. When you issue a 1099 you are getting something in return for it whether it be rent, goods, services, etc. Now that I think of it the reason espoused here for Heritage et al not giving a 1099 is because they are giving you YOUR money, not theirs. They are custodians of your coins and they never take ownership IMO. It's on you to report the sales on your tax return. If you netted $100K after sales, nobody would really know unless you were audited and they asked to see your bank records. Maybe Mark Feld will chime in.
Places like PP, eBay, etc. give you 1099s because I believe the IRS specifically requires them to. Too many using those venues as a business and not reporting.
I remember when there was a "feeding frenzy" over buying mint products and selling them to the sharks. A couple asked for SSNs as I recall, but I never gave mine.
BTW I was told by a retired accountant friend that the IRS doesn't get around to matching 1099s, W-2s with returns until August or later. With the new administration it might be never, A few years ago I unintentionally omitted a 1099 and neither the IRS nor my state revenue dept caught it.
And what about the coins that GC does buy and own, and consign to the auctions? They still don't issue 1099's for those. The point I was making is that the "take ownership" distinction you're trying to draw is evidently not what matters, heritage's balance sheet would look the same. If you look at the books, there's money in, money out and a profit. You couldn't discern what's "your money" and "their money" in a bank account with millions of dollars coming in and out. Do you really think Heritage doesn't own any of the coins in their auctions? What about all the dealers, including myself, who also "take ownership"? Neither of which requires 1099s to be issued. That's what I'm getting at, apparently there's some other factor that makes the difference.
People are focusing on sales and purchases. The 1099 is for alternate income payments not all purchases.
@Bochiman said:
What do companies like Greatcollections, Apmex, etc, send, if anything, to the IRS when you sell to them? What amount would trigger anything?
Does GC buy coins? When they or Heritage, etc. sell for you there is no 1099 because they never took ownership of your coins. If you sell certain bullion items like AGEs to APMEX they are tax exempt as discussed here in the past. Leafs and Krugs not so much, but there are quantity limits for those. Check the SD Bullion site and others for specifics.
GC does, In fact, buy coins… but that’s neither here nor there. They did “take ownership” because they receive a payment from the buyer and issue a payment to the seller. The reason they don’t issue 1099s is because they choose not to, and however the business is structured, they evidently are not required to. Judging by the sentiment towards 1099s expressed by collectors, I can understand why they would avoid doing so.
Do you issue a 1099 to every individual who you buy a $600 + coin from? I bet not and I bet most dealers don't. When you issue a 1099 you are getting something in return for it whether it be rent, goods, services, etc. Now that I think of it the reason espoused here for Heritage et al not giving a 1099 is because they are giving you YOUR money, not theirs. They are custodians of your coins and they never take ownership IMO. It's on you to report the sales on your tax return. If you netted $100K after sales, nobody would really know unless you were audited and they asked to see your bank records. Maybe Mark Feld will chime in.
Places like PP, eBay, etc. give you 1099s because I believe the IRS specifically requires them to. Too many using those venues as a business and not reporting.
I remember when there was a "feeding frenzy" over buying mint products and selling them to the sharks. A couple asked for SSNs as I recall, but I never gave mine.
BTW I was told by a retired accountant friend that the IRS doesn't get around to matching 1099s, W-2s with returns until August or later. With the new administration it might be never, A few years ago I unintentionally omitted a 1099 and neither the IRS nor my state revenue dept caught it.
And what about the coins that GC does buy and own, and consign to the auctions? They still don't issue 1099's for those. The point I was making is that the "take ownership" distinction you're trying to draw is evidently not what matters, heritage's balance sheet would look the same. If you look at the books, there's money in, money out and a profit. You couldn't discern what's "your money" and "their money" in a bank account with millions of dollars coming in and out. Do you really think Heritage doesn't own any of the coins in their auctions? What about all the dealers, including myself, who also "take ownership"? Neither of which requires 1099s to be issued. That's what I'm getting at, apparently there's some other factor that makes the difference.
People are focusing on sales and purchases. The 1099 is for alternate income payments not all purchases.
Do you use the same PP account for buying and selling or do you have separate accounts?
I don't buy any inventory with PayPal.
Edited to add: I just looked and I also only received 3 PayPal payments all of 2024.
EBay Managed Payments don't create a PayPal record even if the buyer used PayPal. Almost all of my business is either eBay or direct with other dealers or the occasional show. None of those venues use PayPal much.
There's no forum member by that name. It's not a link, it's tagging a member.
@BAJJERFAN said:
I just want to make sure that I get the right info to the right spots on Schedule C. I don't care about anything else. The person I'm helping will have have his 1099-K and has kept track of his costs. I expect that the online software knows where to put it as well. Thanks for the comments.
If you use a online tax service like TurboTax you do not have to worry about the forms. Turbotax asks you questions(did you sell any stocks or bonds, did you sell any crypto, did you sell any other assets, etc) and from your responses provides you "cells" to input the raw data. TurboTax takes the information you input and inserts the data on the proper forms and lines within those forms for you. Having a basic knowledge of taxes is helpful to ensure the draft tax return is reasonable before finalizing the e-filing. Just sharing my experience, but certainly this is not meant to be tax advice. I am not a professional, but did sleep at a Holiday Inn express last night If your not comfortable with this process you should consider using a professional tax practitioner.
I suggest being very very careful relying on TurboTax for any kind of sophisticated tax situation.
Sure, but this isn't
TurboTax doesn't walk you through a Schedule C. You will be spending quite a bit of time on the IRS website the first couple years you do it and it's not a simple exercise to be put off until the day before taxes are due.
Most of us aren't natural tax geniuses when we start as a dealer like @jmlanzaf
I use TurboTax and it walks me through Schedule C. I didn't claim to be a tax genius. Despite that, I've had no trouble using TT to fill out Schedule C.
Schedule C itself is fairly straight forward. Of course, I'm not very aggressive with things like home office deductions. It's really not that hard even for a tax moron. You've got purchases and inventory vs sales. Deductions are in several obvious categories: office, shipping, advertising, mileage etc.
What is the complexity that I'm missing?
Schedule C requires significant knowledge of IRS code. Most people’s tax experience prior to operating a business consists of uploading a few forms and letting TT spit out the correct answer. Schedule C is a different beast.
I bought a coin from Heritage for resale and was charged $15 shipping - is that COGS or shipping expense?
I traveled to a coin show for 3 days to buy from dealers for resale - do I use actual meal receipts or IRS daily meal allowance? Is my breakfast the morning I travel to the show a business expense? What if I pay my friend to help staff my table and pay for his lunch?
I bought a new high end camera to take coin photos for my website, Can I expense it or does it need to be depreciated?
I guess I am just a tax moron along with the 100,000s of others asking questions and complaining about TT functionality on the TT forums every year.
Please, please be aware that by filing Sch C you have declared what the tax law calls 'earned income' this will result in you being charged an additional 11.5% SSI tax in addition to your federal tax at your bracket rate. Turbo tax will create the additional forms for you automatically and they compute it too. There is no 'free lunch' by using Sch C if you so choose that option over just paying cap gains on any profit from hobby sales
@BAJJERFAN said:
I just want to make sure that I get the right info to the right spots on Schedule C. I don't care about anything else. The person I'm helping will have have his 1099-K and has kept track of his costs. I expect that the online software knows where to put it as well. Thanks for the comments.
If you use a online tax service like TurboTax you do not have to worry about the forms. Turbotax asks you questions(did you sell any stocks or bonds, did you sell any crypto, did you sell any other assets, etc) and from your responses provides you "cells" to input the raw data. TurboTax takes the information you input and inserts the data on the proper forms and lines within those forms for you. Having a basic knowledge of taxes is helpful to ensure the draft tax return is reasonable before finalizing the e-filing. Just sharing my experience, but certainly this is not meant to be tax advice. I am not a professional, but did sleep at a Holiday Inn express last night If your not comfortable with this process you should consider using a professional tax practitioner.
I suggest being very very careful relying on TurboTax for any kind of sophisticated tax situation.
Sure, but this isn't
TurboTax doesn't walk you through a Schedule C. You will be spending quite a bit of time on the IRS website the first couple years you do it and it's not a simple exercise to be put off until the day before taxes are due.
Most of us aren't natural tax geniuses when we start as a dealer like @jmlanzaf
I use TurboTax and it walks me through Schedule C. I didn't claim to be a tax genius. Despite that, I've had no trouble using TT to fill out Schedule C.
Schedule C itself is fairly straight forward. Of course, I'm not very aggressive with things like home office deductions. It's really not that hard even for a tax moron. You've got purchases and inventory vs sales. Deductions are in several obvious categories: office, shipping, advertising, mileage etc.
What is the complexity that I'm missing?
Schedule C requires significant knowledge of IRS code. Most people’s tax experience prior to operating a business consists of uploading a few forms and letting TT spit out the correct answer. Schedule C is a different beast.
I bought a coin from Heritage for resale and was charged $15 shipping - is that COGS or shipping expense?
I traveled to a coin show for 3 days to buy from dealers for resale - do I use actual meal receipts or IRS daily meal allowance? Is my breakfast the morning I travel to the show a business expense? What if I pay my friend to help staff my table and pay for his lunch?
I bought a new high end camera to take coin photos for my website, Can I expense it or does it need to be depreciated?
I guess I am just a tax moron along with the 100,000s of others asking questions and complaining about TT functionality on the TT forums every year.
Hiring a good CPA keeps sounding better and better.
@Mr_Spud said:
I’m not being serious, but I want to discuss something I always wondered about. If I was shady, but wanted to not break any laws, could I ask my employer to pay me $1000 face value in dimes where 1 just happens to be a 1964 dime, can I report my income to IRS as $1000?
If the answer is yes, what about if 10 of the dimes just happen to be 1964 dimes. Can I still report my income as $1000?
If the answer is still yes, what if all the dimes just happen to be 1964 dimes. Can I still report the income as $1000?
If the answer is no, what if I don’t notice that the dime or dimes are 1964 and I use all the dimes to pay a grocery bill that is $1000. Would I still have to legally declare my income as more than $1000 to the IRS?
Once again, I’m not planning on doing this. Just a question regarding what is legal.
Thanks
You can and if for some reason the IRS guy or Gal finds your tax papers interested Expect to be Audited...are you willing to gamble.
@FrancWells said:
Please, please be aware that by filing Sch C you have declared what the tax law calls 'earned income' this will result in you being charged an additional 11.5% SSI tax in addition to your federal tax at your bracket rate. Turbo tax will create the additional forms for you automatically and they compute it too. There is no 'free lunch' by using Sch C if you so choose that option over just paying cap gains on any profit from hobby sales
If you had over $33K in 1099-K income what would you do? Report it as regular income and pay state and Federal taxes on it or file Schedule C and deduct allowable expenses?
Comments
JBK is correct, miscellaneous expenses are not deductible and the taxable income is the gross margin (sales less the purchase price or cost of those sales}. If the gross margin is a loss, that is the cost of the item exceeds the sales price, the loss is not deductible. I believe if you sell several items, some at a loss and some at a profit, you can aggregate the results to determine if you have a taxable income or non deductible loss for the hobby. What you can't aggregate is losses for one hobby against profits for different hobby, say coin collecting and drag racing. These are the general Hobby rules to my knowledge. If your activity is construed as a business, a different set of rules apply. I am not a CPA, so check with a professional tax preparer for advice regarding your specific situation.
I’m not being serious, but I want to discuss something I always wondered about. If I was shady, but wanted to not break any laws, could I ask my employer to pay me $1000 face value in dimes where 1 just happens to be a 1964 dime, can I report my income to IRS as $1000?
If the answer is yes, what about if 10 of the dimes just happen to be 1964 dimes. Can I still report my income as $1000?
If the answer is still yes, what if all the dimes just happen to be 1964 dimes. Can I still report the income as $1000?
If the answer is no, what if I don’t notice that the dime or dimes are 1964 and I use all the dimes to pay a grocery bill that is $1000. Would I still have to legally declare my income as more than $1000 to the IRS?
Once again, I’m not planning on doing this. Just a question regarding what is legal.
Thanks
Mr_Spud
Yes, one must not confuse sales tax and income tax! You might be in a state where you get a break on the sales tax.... but uncle Sam still wants his share!
If you took that $1000 face in 1964 to your bank and wanted to deposit them into your checking account how much would they credit you for? Probably $1000. So if you're using it at face value as intended then I'd say yes.
OTOH if you went to the bank and got a roll of halves that were all silver would you tell the bank about it? I bet not. Would you come here and brag about your little windfall? I bet you would.
Shady and Illegal. Of course if your employer reported the $1,000 to the IRS it is unlikely to be caught, but that does not make it any more right or legal!
Ok, thanks. But if just 1 dime is silver, and I use it to buy 10 cents worth of candy with it at a store, is it still illegal to report my income as $1000?
And, just FYI, after I milk this hypothetical a little bit longer, I’m going to ask a new hypothetical where my employer pays me $1000 in Cents, and I submit one to PCGS and it gets a pop top grade of 68+ and a PCGS value of $1000 is it legal to report my income to IRS as $1000 or do I legally have to report my income as $2000 minus one cent? And does the answer change if I crack out the 68+ coin and run it through an elongation machine at Disneyland? 😉
Mr_Spud
So we need to differentiate between technical law and practical application. The technical law is when a company compensates you it is reported at the fair value of the compensation. So if you do a job for a company as a contractor and they pay you with a $50 gold eagle for 28 hours of work at $100 an hour, what should be reported to the IRS is the spot value of 1 oz of gold of $2,800, not the legal tender of $50. It does not matter whether you sell that gold eagle for $2,800 or go to convenience store and buy 2 cases of Budweiser and pay with the gold eagle and receive $1.98 in change. Your future spend has no impact on the fair value of the coin that you received for the job you performed. Now the practical side: If you do a 1 hour job for someone for an agreed $20 and you ask to be paid in dimes, so 200 dimes, and 10 of those dimes turn out to be silver, no-one will care. It's not material. There was not an intent to defraud the government, 10 dimes just happen to be silver. Last example, Back to the 200 dimes, the company goes to the bank and gives the teller 2 $100 bills for 200 dimes. He pays you and reports $20 of compensation. After a few weeks you go through the dimes and find a rare numismatic coin worth $17,000. Did anyone do anything wrong-no. Was there any intent to defraud the government-no. Should this windfall be reported now? I lean towards no, although I'm not 100 % positive. However, when you sell the coin you should report the sale as hobby income less the10 cents cost . Your basis in that valuable dime is ten cents. If you find a valuable coin in the parking lot and one day you sell it for say $25,000, you would have a cost of zero and report $25,000 of income at that time of sale. I don't see any difference in the 2 examples. Every day folks conduct business in cash transactions that are not reported with an intent to defraud the gov and avoid income taxes. The key from this lengthy diatribe is income earned is reported at fair value and don't do anything with an intent to defraud. Then you can be Happy and not Worry!
@JW77
Thank you. I like how thoroughly you answered, I don’t feel the need to ask more hypothetical questions even.
Mr_Spud
As I recall, this scenario was already tested and the effort was rejected by the IRS. I think that case involved gold coins where they were trying to pass them at face value for tax purposes.
If you accidentally get a silver dime in payment I assume that's not an issue. But when you sell it for bullion value your taxable profit is proceeds minus 10 cents.
Thanks @JBK , that makes sense
Mr_Spud
The biggest problem I see with the silver dime payments would be that your employer wants to deduct your pay from his gross. So if he has to pay 22x for your dimes, I doubt they want to only take the $1000 deduction.
My Ebay Store
Yup. He's going to W-2 you at the maximum
I am also a CPA with a tax practice. and agree with Elcontador.
I would add one piece of advice. Unless you really know what you are doing stay away from turbo tax to report sales of coins and instead use a local CPA. But suggest you calculate the worst case scenario tax-wise and file and pay the full tax with an extension to October 15th, Seek the CPA now but schedule the appointment for when he is not crazy busy and he can pay more attention to your questions and possibly even charge you less as he would be thankful that you waited until after April 15th to see him or her.
Careful, even some tax CPA’s do not know the tax laws relating to collectibles.
One other thing that coin collectors do not seem to know! There is no longer a tax deferred barter of coins in exchange for other coins!
Speaking of trades, that reminds me question I’ve been meaning to ask. Say theoretically that a collector wants to use gold eagles as payment for another coin, and both parties agree to value them at melt. How would the dealer correctly report that transaction, especially if they don’t liquidate the eagles?
Separately, how about the same situation if numismatic coins are used instead? I imagine it’s always preferred to just make it two separate transactions, but suppose liquidity is an obstacle and it’s not possible to make the bank records match?
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Probably not the legal way, but i don't think I'd report it. It's essentially trading $10k in inventory for $10k in inventory. Kind of a lateral move
what if the coin that was traded for the two eagles was acquired for say $4k and the two eagles have a melt of $5,600 (todays spot). Effectively, dealer made a$1,600 profit. Is that reportable as profit and purchase cost of the 2 eagles is the $5,600 or do you roll the $4,600 basis of the coin as the new basis of the two eagles and don't report income . If i understand what @oreville said, It would seem like the former is the proper IRS treatment.
Technically, there is a barter profit. So it really should be booked that way. But in practice, there is no realized profit until sale, so it's more pay me now or pay me later.
As I said, I'm pretty sure it's not the technically legal way, but you end up paying the same tax either way. You either book the trade now and put the cost basis if the eagles at $5600 or you leave them in inventory at a cost basis of $4k. Either way you pay tax on the $1600 profit.
This is one of the reasons i hate trades. I don't get any cash but potentially owe tax on a paper profit that is still in inventory. For gold, no big deal, it's liquid. But it's the comic book guys that are constantly trying to make trades. I can't pay bills with comic books.
When I spoke of bartering rules, I was referring to the coin collector not the dealer.
However, that being said,when a dealer exchanges one kind of coin in inventory for another, he does not recognize any income until he liquidates his coin inventory for actual US funds OR coins valued within 90% of precious metal melt value. Receiving coins with a high melt value is considered as receiving cash by the IRS.
Coin collectors, even coin investors used to be allowed to barter coins tax deferred until nearly 10 years ago in which section 1031 like-kind exchanges was made more restrictive by the IRS to only permit exchanges of real estate.
What do companies like Greatcollections, Apmex, etc, send, if anything, to the IRS when you sell to them? What amount would trigger anything?
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
Does GC buy coins? When they or Heritage, etc. sell for you there is no 1099 because they never took ownership of your coins. If you sell certain bullion items like AGEs to APMEX they are tax exempt as discussed here in the past. Leafs and Krugs not so much, but there are quantity limits for those. Check the SD Bullion site and others for specifics.
GC does, In fact, buy coins… but that’s neither here nor there. They did “take ownership” because they receive a payment from the buyer and issue a payment to the seller. The reason they don’t issue 1099s is because they choose not to, and however the business is structured, they evidently are not required to. Judging by the sentiment towards 1099s expressed by collectors, I can understand why they would avoid doing so.
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Is the sentiment against 1099s or in favor of tax evasion?
Asking for a friend. @IRS
Ebay and PayPal don't take ownership, either, and they issue 1099s.
Also, certain states do tax profits on bullion and they use the 1099s to see who might have reportable income. In fact, certain states have a lower threshold for 1099 issuance and eBay, etc. honors that.
I agree that some operations don't issue them, but I don't understand why.
Do you issue a 1099 to every individual who you buy a $600 + coin from? I bet not and I bet most dealers don't. When you issue a 1099 you are getting something in return for it whether it be rent, goods, services, etc. Now that I think of it the reason espoused here for Heritage et al not giving a 1099 is because they are giving you YOUR money, not theirs. They are custodians of your coins and they never take ownership IMO. It's on you to report the sales on your tax return. If you netted $100K after sales, nobody would really know unless you were audited and they asked to see your bank records. Maybe Mark Feld will chime in.
Places like PP, eBay, etc. give you 1099s because I believe the IRS specifically requires them to. Too many using those venues as a business and not reporting.
I remember when there was a "feeding frenzy" over buying mint products and selling them to the sharks. A couple asked for SSNs as I recall, but I never gave mine.
BTW I was told by a retired accountant friend that the IRS doesn't get around to matching 1099s, W-2s with returns until August or later. With the new administration it might be never, A few years ago I unintentionally omitted a 1099 and neither the IRS nor my state revenue dept caught it.
Don't 100% of states tax profits on bullion. Who doesn't?
Edited to add: apparently Nebraska and Alabama don't as of last year. I stand corrected and shocked.
EBay and Paypal are using 1099s due to payment processing not sales.
Per the Great Collections Website:
"Are Consignor's Auction Sales Reported to the IRS?
Ian Russell on Sat, Nov 30, 2024 6:52:21 AM
At GreatCollections, we do not report any sales of our consignors to the IRS or tax authorities, as we are not required to. Any tax reporting is up to the consignor, and we recommend talking to your CPA or tax professional about reporting that may be required by you.
Every few years, the government comes up with a new bill that would require auction houses to report sales of consignors to the IRS, however, so far they have been fought by the auction industry and have not been written into any law. If this changes in the future, we will definitely let all of our consignors know."
He didn't elaborate as to why they are not required to, but maybe he will here.
FWIW I'm recommending that my son take his tax stuff to H & R Block at least for this year.
Mine does so I don't have a personal need to learn about the others. 🙂
What state is that? I find it hard to believe that any state doesn't tax cap gains on bullion.
Apparently Nebraska and Alabama don't as of last year... I'm shocked
And what about the coins that GC does buy and own, and consign to the auctions? They still don't issue 1099's for those. The point I was making is that the "take ownership" distinction you're trying to draw is evidently not what matters, heritage's balance sheet would look the same. If you look at the books, there's money in, money out and a profit. You couldn't discern what's "your money" and "their money" in a bank account with millions of dollars coming in and out. Do you really think Heritage doesn't own any of the coins in their auctions? What about all the dealers, including myself, who also "take ownership"? Neither of which requires 1099s to be issued. That's what I'm getting at, apparently there's some other factor that makes the difference.
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My state (Florida) doesn't have an income tax and neither does a few other states.
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
I was thinking, based on the way it was phrased, that he was talking about a bullion exemption. But, you're right, he could have just meant no income tax.
People are focusing on sales and purchases. The 1099 is for alternate income payments not all purchases.
https://www.irs.gov/forms-pubs/about-form-1099-misc
I was talking about consignment coins. In that case the "their" money is the commish and juice. What they buy and sell or auction off would be of no concern to me. If they issued a 1099 for every $2500 coin that they bought it would take one person to keep track of it all. The sheer volume of 1099s for both Heritage and the IRS is probably why they aren't required. BTW are set up to issue a 1099 electronically if needed or would you use snailmail?
Do you use the same PP account for buying and selling or do you have separate accounts?
I don't buy any inventory with PayPal.
Edited to add: I just looked and I also only received 3 PayPal payments all of 2024.
All this tax talk is making me very Whoozey. Hello H&R Block!
All of this has to be an absolute boon for Great Collections.
Dave
Technically, that would give you more paperwork not less. Unless you're a tax evade, of course.
I wonder what happens if an auction company gets audited. Would they look at consignors reporting?
@IRSaudit
Only three paypal transactions for you in 2024 ?
By the way your irs audit link does not work
Happy Monday !
EBay Managed Payments don't create a PayPal record even if the buyer used PayPal. Almost all of my business is either eBay or direct with other dealers or the occasional show. None of those venues use PayPal much.
There's no forum member by that name. It's not a link, it's tagging a member.
What about Heritage?
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
Please, please be aware that by filing Sch C you have declared what the tax law calls 'earned income' this will result in you being charged an additional 11.5% SSI tax in addition to your federal tax at your bracket rate. Turbo tax will create the additional forms for you automatically and they compute it too. There is no 'free lunch' by using Sch C if you so choose that option over just paying cap gains on any profit from hobby sales
Hiring a good CPA keeps sounding better and better.
You can and if for some reason the IRS guy or Gal finds your tax papers interested Expect to be Audited...are you willing to gamble.
If you had over $33K in 1099-K income what would you do? Report it as regular income and pay state and Federal taxes on it or file Schedule C and deduct allowable expenses?
"Sell for CASH" - "Keep the STASH!"
"When they can't find anything wrong with you, they create it!"