Do large auction houses report payments to sellers to IRS??
2manycoins2fewfunds
Posts: 3,039 ✭✭✭
Is it correct to assume all payments to sellers are reported to IRS?
If not why would they not be required beyond a certain level say 10K??
If not why would they not be required beyond a certain level say 10K??
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I firmly believe in numismatics as the world's greatest hobby, but recognize that this is a luxury and without collectors, we can all spend/melt our collections/inventories.
eBaystore
Given the outlook for government finances, I wouldn't count on it remaining that way much longer.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
<< <i>Is it correct to assume all payments to sellers are reported to IRS?
If not why would they not be required beyond a certain level say 10K?? >>
The taxes owed would be on any profit which may be a negative amount.
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 may have to send a few recent sales catalogs to my local IRS office and see if I can claim a 10% reward.
<< <i>I hope all sellers are reporting gains as those 5-6-7 figure sales are bound to draw attention.
I may have to send a few recent sales catalogs to my local IRS office and see if I can claim a 10% reward. >>
With friends like you, who needs enemas?
Mystery consignor?...................is anyone so stupid as to believe the auction house doesn't know who consigned coins and to whom checks are written??
These guys are not priests.
Any and all requests for information from IRS will be answered without exception.
Many high dollar coins have well published histories of prior sales prices and profit/losses are easy to establish.
Now 40 years ago this might have been small potatos to IRS but with multi-million dollar sales becoming very common it is very foolish, stupid and potentially criminal to think you can sell a coin for 95K today that you purchased 20 years earlier for 10K and not potentially owe taxes.
I'm not joking that someone should forward a few of Heritages auction catalogs to the IRS investigative/fraud division for their interest and claim a 10% reward.
I suspect the true high end guys are all OK as they likely have very well paid lawyers and tax advisors to be sure they pay all appropriate taxes.
It is the sales in the 10K-250K range where I suspect there is gross underreporting.
<< <i>So how does the awkshun house report its income to the IRS; $39,000 commish income from anonymous consignor #321 and 132,000 commish income from mystery consignor 487? you'd think the IRS would want to know the source of that consignment income. >>
When it comes to an IRS inquiry, these "consignors" will not remain anonymous. There may be no reporting requirement, but they still need to have all the records in case the IRS comes a-callin'.
<< <i>You are joking correct??
Mystery consignor?...................is anyone so stupid as to believe the auction house doesn't know who consigned coins and to whom checks are written??
These guys are not priests.
Any and all requests for information from IRS will be answered without exception.
Many high dollar coins have well published histories of prior sales prices and profit/losses are easy to establish.
Now 40 years ago this might have been small potatos to IRS but with multi-million dollar sales becoming very common it is very foolish, stupid and potentially criminal to think you can sell a coin for 95K today that you purchased 20 years earlier for 10K and not potentially owe taxes.
I'm not joking that someone should forward a few of Heritages auction catalogs to the IRS investigative/fraud division for their interest and claim a 10% reward.
I suspect the true high end guys are all OK as they likely have very well paid lawyers and tax advisors to be sure they pay all appropriate taxes.
It is the sales in the 10K-250K range where I suspect there is gross underreporting. >>
Why are you suggesting that someone else should turn in auction house consignors for a 10% bounty? Why not do it yourself if you feel so strongly about it?Nothing personal, I just was wondering-------BigE
<< <i>
<< <i>You are joking correct??
Mystery consignor?...................is anyone so stupid as to believe the auction house doesn't know who consigned coins and to whom checks are written??
These guys are not priests.
Any and all requests for information from IRS will be answered without exception.
Many high dollar coins have well published histories of prior sales prices and profit/losses are easy to establish.
Now 40 years ago this might have been small potatos to IRS but with multi-million dollar sales becoming very common it is very foolish, stupid and potentially criminal to think you can sell a coin for 95K today that you purchased 20 years earlier for 10K and not potentially owe taxes.
I'm not joking that someone should forward a few of Heritages auction catalogs to the IRS investigative/fraud division for their interest and claim a 10% reward.
I suspect the true high end guys are all OK as they likely have very well paid lawyers and tax advisors to be sure they pay all appropriate taxes.
It is the sales in the 10K-250K range where I suspect there is gross underreporting. >>
Why are you suggesting that someone else should turn in auction house consignors for a 10% bounty? Why not do it yourself if you feel so strongly about it?Nothing personal, I just was wondering-------BigE >>
How does one even know that such auction income has not been reported and the taxes paid? Before one squeals, one better have proof.
The same with the galleries. They report they made y amount from the year (detailed from how each day) and then write their expenses. The payments they make to the consigners will and should come up as expenses.
<< <i>You are joking correct??
Mystery consignor?...................is anyone so stupid as to believe the auction house doesn't know who consigned coins and to whom checks are written??
These guys are not priests.
Any and all requests for information from IRS will be answered without exception.
Many high dollar coins have well published histories of prior sales prices and profit/losses are easy to establish.
Now 40 years ago this might have been small potatos to IRS but with multi-million dollar sales becoming very common it is very foolish, stupid and potentially criminal to think you can sell a coin for 95K today that you purchased 20 years earlier for 10K and not potentially owe taxes.
I'm not joking that someone should forward a few of Heritages auction catalogs to the IRS investigative/fraud division for their interest and claim a 10% reward.
I suspect the true high end guys are all OK as they likely have very well paid lawyers and tax advisors to be sure they pay all appropriate taxes.
It is the sales in the 10K-250K range where I suspect there is gross underreporting. >>
No, I am not joking; actually I was being a wiseass, but forgot the winky.
While I believe the house does not report every situation in detail, they do have the info available if something catches the eye of the IRS. Actually I should have said proceeds and not commish. Is it fair to assume the action house will counsel the recipients of large consignment proceed checks?
roadrunner
Empty Nest Collection
The consignor and the owner of the coins are two different quantities. Often times, dealers and/or collectors will pool high value coins together with other parties, as many as 5-10, to get better terms on the consignment. The auction does not know this. In addition, collectors often let major dealers submit to auction houses on thier behalf. Again, the auction house does not know this. If any government agency like the IRS seeks to know who are the consignors, the the auction best inform the consignors in the TOS. Consignor doesn't always equate to owner.
TRUTH
This is a public forum. If your "gains have handily overshadowed that loss", your height in inches must similarly overshadow your IQ.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
<< <i>You are joking correct??
Mystery consignor?...................is anyone so stupid as to believe the auction house doesn't know who consigned coins and to whom checks are written??
These guys are not priests.
Any and all requests for information from IRS will be answered without exception.
Many high dollar coins have well published histories of prior sales prices and profit/losses are easy to establish.
Now 40 years ago this might have been small potatos to IRS but with multi-million dollar sales becoming very common it is very foolish, stupid and potentially criminal to think you can sell a coin for 95K today that you purchased 20 years earlier for 10K and not potentially owe taxes.
I'm not joking that someone should forward a few of Heritages auction catalogs to the IRS investigative/fraud division for their interest and claim a 10% reward.
I suspect the true high end guys are all OK as they likely have very well paid lawyers and tax advisors to be sure they pay all appropriate taxes.
It is the sales in the 10K-250K range where I suspect there is gross underreporting. >>
Actually too, I used mystery consignor as any ol person instead of Joe the Plumber or Joe Sixpack or Clarence Collector. Just a made up name is all.
<< <i>Mystery consignor?...................is anyone so stupid as to believe the auction house doesn't know who consigned coins and to whom checks are written??
The consignor and the owner of the coins are two different quantities. Often times, dealers and/or collectors will pool high value coins together with other parties, as many as 5-10, to get better terms on the consignment. The auction does not know this. In addition, collectors often let major dealers submit to auction houses on thier behalf. Again, the auction house does not know this. If any government agency like the IRS seeks to know who are the consignors, the the auction best inform the consignors in the TOS. Consignor doesn't always equate to owner.
TRUTH >>
That sounds like risky business to me. Being the payee of record for a $500K consignment proceeds for coins that don't belong to you seems ill advised. When you divvy up the proceeds among the actual owners, do you collect anything from them to offset any tax liability if the auction house tells the IRS that they paid all that money to you?
<< <i>
<< <i>Mystery consignor?...................is anyone so stupid as to believe the auction house doesn't know who consigned coins and to whom checks are written??
The consignor and the owner of the coins are two different quantities. Often times, dealers and/or collectors will pool high value coins together with other parties, as many as 5-10, to get better terms on the consignment. The auction does not know this. In addition, collectors often let major dealers submit to auction houses on thier behalf. Again, the auction house does not know this. If any government agency like the IRS seeks to know who are the consignors, the the auction best inform the consignors in the TOS. Consignor doesn't always equate to owner.
TRUTH >>
That sounds like risky business to me. Being the payee of record for a $500K consignment proceeds for coins that don't belong to you seems ill advised. When you divvy up the proceeds among the actual owners, do you collect anything from them to offset any tax liability if the auction house tells the IRS that they paid all that money to you? >>
Well, the owners don't divvy up the proceeds as such. There is paperwork involved to verify who is the actual owner of the coins involved. Currently, the auction house does not need to know who owns the coins, only who consigns the coins. There are no 1099 forms issued by the auction house. However, if there is reporting IN THE FUTURE, then I presume these pooling agreements will no longer occur. In addition, dealer representation of a consignor/owner may either cease or the representing dealer may issue his/her own 1099 to the client/owner.
TRUTH
"Seu cabra da peste,
"Sou Mangueira......."
<< <i>Last year I lost $8K on three consignments to Heritage. I didn't even report the loss. Lately my private transaction gains have handily overshadowed that loss, and I don't plan on reporting any of that either. Small potatoes. >>
Who do you think you are? Charlie Rangel? Tim Geither?
Free Trial
<< <i>It is the sales in the 10K-250K range where I suspect there is gross underreporting. >>
And I suspect you are very wrong. But hey, what do I know? Go ahead, send in all your auction catalogs. Betcha spend a helluva lot more on postage than you ever recieve back.
<< <i>As long as you do not offer a Tax ID or SSN I wouldn't worry about taxes. Now the IRS may want to know how large amounts of money are deposited into your bank account, which does have a SSN or Tax ID. Cash deposits over $10,000 requires documentation. Checks do not, but the bank retains the check "payer" info and that can be used for a trail. Odds are multiple cash deposits over $10,000 will catch the eye of the FBI/FDIC before the IRS because money laundering is a bigger issue for banks than someone not paying their taxes. Any financial institution found to be enabling money laundering can and will be fined if not shut down. >>
Would they want to know how or would they want to know why large amounts are being deposited into your account?
Not sure what that has to do with auction houses since they don't pay in cash. IIRC the IRS still does random audits and may go so far as to look into your bank accounts. They might ask about something like a $1200 deposit which doesn't appear to be something regular like a payroll deposit.
No Way Out: Stimulus and Money Printing Are the Only Path Left
<< <i>Cash payments / transfers of $10,000 or more (or a series of such transfers equallingor exceeding this amount) require the completion of the IRS form 8300 within 15 days of the transaction. At present, no additional paperwork is required. >>
So if I send you $1,000 per day as a PayPal gift for 11 days YOU have to fill out the 8300 form?
<< <i>Cash payments / transfers of $10,000 or more (or a series of such transfers equallingor exceeding this amount) require the completion of the IRS form 8300 within 15 days of the transaction. At present, no additional paperwork is required. >>
If I won say $30K as a casino jackpot, I'd have no qualms about depositing the cash in my bank account cuz I know and could prove where it came from. Then again if I found a bag of drug money in an alley, I'd be a bit more hesitant to do that.
<< <i>
<< <i>Cash payments / transfers of $10,000 or more (or a series of such transfers equallingor exceeding this amount) require the completion of the IRS form 8300 within 15 days of the transaction. At present, no additional paperwork is required. >>
So if I send you $1,000 per day as a PayPal gift for 11 days YOU have to fill out the 8300 form? >>
Yes, anything that "appears" to be an avoidance of the requirement to generate the form can be cause to generate the form. The IRS puts the responsibility on the receiving party which makes them overreact at times to protect themselves. Any transaction can be reported to the IRS, regardless of amount, if receiving party suspects foul play on the source of funds. The IRS has turned the financial industry, by law, into their "snitches" in the war on illegal funds.
No Way Out: Stimulus and Money Printing Are the Only Path Left
To answer the OP it is no, since if they reported it no one would likely consign to them. I know I wouldn't unless I could document EVERY cost.
<< <i>It really surprises me that the auction company is NOT required to 1099 you. I think it would be a basic requirement. This must be an oversight. I think Obama will fix it though
Do we 1099 the coins to them at the time of consigment then also. I would guess we would use our cost as the basis for that right.
<< <i>It really surprises me that the auction company is NOT required to 1099 you. I think it would be a basic requirement. This must be an oversight. I think Obama will fix it though
Well a lot of folks don't want to pay the taxes and if they can't prove cost then they would be liable for gains on the entire sale instead of just the profits.
<< <i>It really surprises me that the auction company is NOT required to 1099 you. >>
They didn't give you anything that was theirs or that was earned; they merely collected your proceeds on your behalf and sent them to you.
<< <i>
<< <i>
<< <i>Cash payments / transfers of $10,000 or more (or a series of such transfers equallingor exceeding this amount) require the completion of the IRS form 8300 within 15 days of the transaction. At present, no additional paperwork is required. >>
So if I send you $1,000 per day as a PayPal gift for 11 days YOU have to fill out the 8300 form? >>
Yes, anything that "appears" to be an avoidance of the requirement to generate the form can be cause to generate the form. The IRS puts the responsibility on the receiving party which makes them overreact at times to protect themselves. Any transaction can be reported to the IRS, regardless of amount, if receiving party suspects foul play on the source of funds. The IRS has turned the financial industry, by law, into their "snitches" in the war on illegal funds. >>
By receiving party do you mean the financial institution where you deposit or cash it?
Also if one has say 100 coins to consign to TeleTrade is it legit to send them in groups such that the sale of the group will not generate proceeds in excess of $10K?
Huh ...... wouldn't that be a loss??
<< <i>The taxes owed would be on any profit which may be a negative amount.
Huh ...... wouldn't that be a loss??
Yes, but negative profit sounds less painful.
<< <i>
<< <i>
<< <i>
<< <i>Cash payments / transfers of $10,000 or more (or a series of such transfers equallingor exceeding this amount) require the completion of the IRS form 8300 within 15 days of the transaction. At present, no additional paperwork is required. >>
So if I send you $1,000 per day as a PayPal gift for 11 days YOU have to fill out the 8300 form? >>
Yes, anything that "appears" to be an avoidance of the requirement to generate the form can be cause to generate the form. The IRS puts the responsibility on the receiving party which makes them overreact at times to protect themselves. Any transaction can be reported to the IRS, regardless of amount, if receiving party suspects foul play on the source of funds. The IRS has turned the financial industry, by law, into their "snitches" in the war on illegal funds. >>
By receiving party do you mean the financial institution where you deposit or cash it?
Also if one has say 100 coins to consign to TeleTrade is it legit to send them in groups such that the sale of the group will not generate proceeds in excess of $10K? >>
Financial firms that take deposits are under legal requirement to report any deposit below 10,000 that "appears" suspicious and ALL deposits over 10,000.
As a collector who consigns coins, you are free to consign them when and how you see fit. It is not legit to avoid taxes on capital gains. If your actions appear to be doing that, then you might attract attention. Why not use different auction houses or sources to sell? I have a friend who once a month takes a $50 gold eagle out of his safe deposit box and sells it to a different coin dealer for cash. He bought tubes of them years ago and doesn't mind the lower premium paid by the dealers because it's cash and carry.
No Way Out: Stimulus and Money Printing Are the Only Path Left
I generally leave a few deductions off my taxes so "when" the IRS may come calling i will be able to counter what ever they feel i have done wrong. The IRS is not going to audit someone and not find a few items to nail on.
Even if auction houses do not report the money, you still got to cash the check somewhere. Banks are required to report 10k transaction. Now days 10k is no big deal.
A lot of coin deals are all cash and i am sure not everyone claims it. I could care less if someone claims it or not.
NGC registry V-Nickel proof #6!!!!
working on proof shield nickels # 8 with a bullet!!!!
RIP "BEAR"
So if I send you $1,000 per day as a PayPal gift for 11 days YOU have to fill out the 8300 form?
No, the burden of completing and sending the form to the IRS is on the recipient of said cash payment(s).
"Seu cabra da peste,
"Sou Mangueira......."
<< <i>I am amazed at how paranoid people are of the IRS sometimes. >>
I underpaid by 22k a few years back. I got on a payment plan. Last year i overpaid and i knew i would be done since i was down to owing them about 700 dollars in december 2009. My wife called about skipping the payment since we were going to file by Feb. 1st, 2010 and probably get our first refund in 15 years of pennies. First they said NO and then they offered to change the payment terms. They wanted in excess of 100 dollars ( i may be a little off on the actual amount) to change the payment amount. I told my wife to skip decembers payment. Mid January we both got our own certified letter from the IRS saying they were going to freeze, garnish, sieze whatever they felt like.
I pay what i consider to be a lot to the IRS ever year and they want to get all bent over $700 or less dollars.
BTW i am paranoid of an audit even though i feel i pay and file correctly. I have to pay a tax lady cause it is way to complicated for me to figure out the 20 plus pages i file each year. REGUARDLESS of wether you do everything 100 percent right and dot the i's and cross the t's if you get selected for an audit they will find something on YOU. I would think the irs would not be to happy to send an auditor out to 20 different audits and he comes back with ZERO additional dollars in Tax revenue from those 20 reviews. He will not be employeed long.
I create enough headaches on a daily basis for myself that i would not like to add the IRS to the list.
NGC registry V-Nickel proof #6!!!!
working on proof shield nickels # 8 with a bullet!!!!
RIP "BEAR"
<< <i>The taxes owed would be on any profit which may be a negative amount.
Huh ...... wouldn't that be a loss??
Duh! That was my point. Not every big coin sale generates a profit especially if you buy at full retail and sell a few years after your purchase in a down market. So, just because an auction company sends you a big check, you don't necessarily owe any taxes.
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
This article is from last year about the legislation passed:
IRS
<< <i>Last year I lost $8K on three consignments to Heritage. I didn't even report the loss. Lately my private transaction gains have handily overshadowed that loss, and I don't plan on reporting any of that either. Small potatoes. >>
now thats good stuff......
<< <i>All expenses and income from any business are open for IRS inspection any time the IRS wants to see a detailed explanation of what was claimed. Things that might not get "reported" to the IRS are always available to the IRS. Never assume that money you receive from another party (unless it's cash) cannot be traced to you. >>
Ah yes...the biggest mistake a criminal (or potential criminal) makes is underestimating the ability of law enforements tactics to uncover the truth.
<< <i>Starting next year anyone with sales over $20k/yr will get a 1099 and the IRS will also get the report of sales.
This article is from last year about the legislation passed:
IRS >>
Is that just eBay or every selling venue?
<< <i>Starting next year anyone with sales over $20k/yr will get a 1099 and the IRS will also get the report of sales.
This article is from last year about the legislation passed:
IRS >>
Great article. Thanks. It gives good insight to anyone contemplating a side business.