Just sittin' here, doin' my taxes, and...........

DBSTrader2 · February 10, 2012 1:56AM

... as it usually does, my mind starts to wander...........

This past year has been a rough one, personally, for me. I started thinking about what if I suddenly awoke & found it had all just been a bad dream, BUT I still somehow knew in general what the next year held for stocks, silver & gold, etc......

Naturally, that led me to think what I'd invest in to make a killing off that knowledge, which led me to thinking about gold.....

Anyway, to make a long daydream story short, I started wondering about the tax implications of making a killing this past year in gold. In reality, I don't have any gold and just a few pieces of "sellable" silver coins, so I can't do any of what I'm daydreaming about, but what if I did & made a HUGE profit on gold's run-up? My understanding is that I'd have to pay taxes on it, and I'd need some sort of proof of purchase & sales prices, but how would that work in REALITY?

When Forum members buy or sell small lots of silver/gold on the BST Forum, is everyone expected to keep records? What if their transactions are done thru hotel "cash-for-gold" or pawn shops or B&M stores, or the big gold sellers/buyers? What are the record-keeping requirements for each of those? And how does Uncle Sam keep track?

And....... what % of Forum members do you figure actually FOLLOW all those rules?

Just curious. At this point, I don't expect to wake up or take a shower anytime soon "Dallas"-style, and find out this past year has been just one cruel hoax............

- - Dave

guitarwes · February 10, 2012 2:04AM

You're "supposed" to report ANY and ALL capital gains for anything and everything. With that said, some people do, some people don't.

Uncle Sam can't keep track of everything, that's where honesty in reporting comes in. Of course, everyone isn't honest.

Cash speaks loudly, but is very quiet in alot of cases.

DBSTrader2 · February 10, 2012 2:11AM

QUIET?! My cash has been practically S I L E N T this past year!!

- - Dave

TwoSides2aCoin · February 10, 2012 2:23AM

I have some tax tokens in my token box. Would you like to buy some ? Sorry, that's like spam.

Justacommeman · February 10, 2012 2:26AM

Just sent in my stuff to my accountant. I sold some silver in 2011 that I bought in 2006. It was a taxable event and I will report it.

MJ

Unknown · February 10, 2012 2:44AM

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dcarr · February 10, 2012 2:47AM

If you bought gold, and then gold goes way up in price, then you have a profit "on paper".
But you don't have a taxable event until you actually sell it.

mariner67 · February 10, 2012 2:50AM

<< I don't report losses or depreciation on my assets, so why should I report gains? >>

Maybe because it is the law?

Justacommeman · February 10, 2012 2:50AM

<< I don't report losses or depreciation on my assets, so why should I report gains? >>

Because it's the law and you could get fined or thrown in jail I suppose if audited. That is plenty of motivation for most.

You don't pay taxes on appreciation of assets either so why would you report losses on depreciation? The taxable event happens when selling not holding.

MJ

PerryHall · February 10, 2012 2:56AM

<< 

<< I don't report losses or depreciation on my assets, so why should I report gains? >>

Because it's the law and you could get fined or thrown in jail I suppose if audited. That is plenty of motivation for most.

You don't pay taxes on appreciation of assets either so why would you report losses on depreciation? The taxable event happens when selling not holding.

MJ >>

If your losses exceed your gains, do you have to report them on your taxes?

Bankerbob56 · February 10, 2012 3:19AM

<< Just sent in my stuff to my accountant. I sold some silver in 2011 that I bought in 2006. It was a taxable event and I will report it.

MJ >>

Hear Ye! Hear Ye!

That is the way it's SUPPOSED to work!

In the banking business, if you need a loan all of your income best be on your tax returns or we won't count it towards your ability to repay said loan!!

Amazing how many people look at us like we are from Mars when we EXPECT customers to REPORT their income!

Well Done MJ!!

Bankerbob56 · February 10, 2012 3:21AM

<< 

<< 

<< I don't report losses or depreciation on my assets, so why should I report gains? >>

Because it's the law and you could get fined or thrown in jail I suppose if audited. That is plenty of motivation for most.

You don't pay taxes on appreciation of assets either so why would you report losses on depreciation? The taxable event happens when selling not holding.

MJ >>

If your losses exceed your gains, do you have to report them on your taxes? >>

The NET event is a Loss, so you would have a tax benefit. So why wouldnt you want to report it????

Justacommeman · February 10, 2012 3:24AM

<< 

<< 

<< I don't report losses or depreciation on my assets, so why should I report gains? >>

Because it's the law and you could get fined or thrown in jail I suppose if audited. That is plenty of motivation for most.

You don't pay taxes on appreciation of assets either so why would you report losses on depreciation? The taxable event happens when selling not holding.

MJ >>

If your losses exceed your gains, do you have to report them on your taxes? >>

I will let an accountant field that loaded question. If there is a check, deposit or withdrawal involved I like to report it or make my accountant aware of it. MJ

19Lyds · February 10, 2012 3:26AM

<< I don't report losses or depreciation on my assets, so why should I report gains? >>

ou mean like the modern I purchased back in 2007 for $500 which I could not sell for $100 today?

But then, I don't pay taxes on my inventory (collection) so its a push. It is an interesting subject though since many folks "sell" to collect and are not necessarily a business per say even though it appears that way.

At what point does "profit" come into play?

Raufus · February 10, 2012 3:32AM

I love how taxes on all gains are due the year earned (if not sooner, i.e., quarterly) but losses end up getting carried over for years. The Govt. is your non-contributing partner in the good times but not the bad. Ticks me off every year when I think about it.

Raufus · February 10, 2012 3:37AM

<< 

<< I don't report losses or depreciation on my assets, so why should I report gains? >>

ou mean like the modern I purchased back in 2007 for $500 which I could not sell for $100 today?

But then, I don't pay taxes on my inventory (collection) so its a push. It is an interesting subject though since many folks "sell" to collect and are not necessarily a business per say even though it appears that way.

At what point does "profit" come into play? >>

Appreciated inventory is unrealized gain, just like a stock which has gone up. You don't realize the gain nor owe cap gains on it until you sell.

That said, I'm not an accountant. I let my accountant deal with this. That's what I pay him for (the second tax as I look at it - compliance and paying the accountant - never ends).

RYK · February 10, 2012 3:43AM

I do my best to honestly report gains and losses from sales of coins. They are more complicated to record and report than stocks and mutual funds, IMO. Near the end of the calendar year, if I see a lot in the way of gains, I may find some stuff I no longer want that I am underwater in to sell for a loss.

PerryHall · February 10, 2012 3:59AM

<< 

<< 

<< 

<< I don't report losses or depreciation on my assets, so why should I report gains? >>

Because it's the law and you could get fined or thrown in jail I suppose if audited. That is plenty of motivation for most.

You don't pay taxes on appreciation of assets either so why would you report losses on depreciation? The taxable event happens when selling not holding.

MJ >>

If your losses exceed your gains, do you have to report them on your taxes? >>

The NET event is a Loss, so you would have a tax benefit. So why wouldnt you want to report it???? >>

If the loss were small, would it be worth possibily triggering an audit by the IRS?

Eagleguy · February 10, 2012 4:02AM

Here's the thing I have a problem with:

If you make a profit of $100,000 selling gold or stocks for instance, you have to pay ALL the taxes on it this year.

If you take a $100,000 loss, you get to write off only $3,000 each year (in this case for 33 years). If you die before you collect it all, too bad.

JH

Unknown · February 10, 2012 4:06AM

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yellowkid · February 10, 2012 4:26AM

<< I don't report losses or depreciation on my assets, so why should I report gains? >>

The IRS raked me over the coals for forty years, if I happen to make a few bucks on something let them come and find me.

ModernCoin · February 10, 2012 4:31AM

The thread title immediately made me think of my favorite bumper sticker:

Justacommeman · February 10, 2012 4:42AM

<< 

<< 

<< I don't report losses or depreciation on my assets, so why should I report gains? >>

Because it's the law and you could get fined or thrown in jail I suppose if audited. That is plenty of motivation for most.

You don't pay taxes on appreciation of assets either so why would you report losses on depreciation? The taxable event happens when selling not holding.

MJ >>

I find most of mine roll searching. Should I bill myself out at $20/hr for labor purposes? I could report a huge loss to write off then. Let's see, 10 hours or so a week, $200/week, times 52... $10,400 in losses, offset by maybe $4k in silver a year. That's a net loss around $6k.

Bet if I wrote that off, they'd be on me in ten seconds.

EDIT: 10 hours a week is an average... it's probably closer to 12-14 hours a week.

EDIT: Wait, if I set up a sole proprietorship with myself as the only employee, invested $2k into it, and paid myself at a rate of say, $15/hr plus reimbursement for mileage and wear+tear on my car, I could legally get a nice tax write-off every year... hmm... Because it would never, ever pull a profit. Then I can just keep the silver. >>

Nope you can only offset by $3000 and not $6000. You could carry the loss over. You don't need to explain this scenario to me but you may have to the IRS one day. I'm not sure it passes the smell test.

To each is own.

MJ

RYK · February 10, 2012 4:46AM

<< 

<< 

<< I don't report losses or depreciation on my assets, so why should I report gains? >>

Because it's the law and you could get fined or thrown in jail I suppose if audited. That is plenty of motivation for most.

You don't pay taxes on appreciation of assets either so why would you report losses on depreciation? The taxable event happens when selling not holding.

MJ >>

I find most of mine roll searching. Should I bill myself out at $20/hr for labor purposes? I could report a huge loss to write off then. Let's see, 10 hours or so a week, $200/week, times 52... $10,400 in losses, offset by maybe $4k in silver a year. That's a net loss around $6k.

Bet if I wrote that off, they'd be on me in ten seconds.

EDIT: 10 hours a week is an average... it's probably closer to 12-14 hours a week.

EDIT: Wait, if I set up a sole proprietorship with myself as the only employee, invested $2k into it, and paid myself at a rate of say, $15/hr plus reimbursement for mileage and wear+tear on my car, I could legally get a nice tax write-off every year... hmm... Because it would never, ever pull a profit. Then I can just keep the silver. >>

Don't forget that you will pay income tax rate on your salary, in addition to SS tax and FICA (13%), in which case you might be better off doing it the regular way.

ranshdow · February 10, 2012 4:51AM

*warning* topic drift below

Ok, so pardon my ignorance, but how do you figure cost basis on a gift?

And what do you do if you don't have receipts for half the transaction?

Raufus · February 10, 2012 4:52AM

<< The thread title immediately made me think of my favorite bumper sticker:

>>

That sticker is the ultimate truism. A great visual as I prepare my taxes for the accountant.

Raufus · February 10, 2012 4:54AM

<< Here's the thing I have a problem with:

If you make a profit of $100,000 selling gold or stocks for instance, you have to pay ALL the taxes on it this year.

If you take a $100,000 loss, you get to write off only $3,000 each year (in this case for 33 years). If you die before you collect it all, too bad.

JH >>

Exactly! This is why I said what I did earlier in the thread. Such B.S.

droopyd · February 10, 2012 5:03AM

<< You're "supposed" to report ANY and ALL capital gains for anything and everything. With that said, some people do, some people don't. >>

If you find money lying in the street, you're suposed to report it.

Justacommeman · February 10, 2012 5:16AM

<< 

<< Here's the thing I have a problem with:

If you make a profit of $100,000 selling gold or stocks for instance, you have to pay ALL the taxes on it this year.

If you take a $100,000 loss, you get to write off only $3,000 each year (in this case for 33 years). If you die before you collect it all, too bad.

JH >>

Exactly! This is why I said what I did earlier in the thread. Such B.S. >>

Moral hazard. Everyone would be taking huge risk reward plays if they knew it could all be written off.

Obviously, the banksters get a pass..............MJ

Raufus · February 10, 2012 5:29AM

I understand your point. That said, people's goal is still not to loose. I think that it's just plain Govt. greed - they need as much of my money as possible to waste on buying votes.

Justacommeman · February 10, 2012 5:31AM

<< I understand your point. That said, people's goal is still not to loose. I think that it's just plain Govt. greed - they need as much of my money as possible to waste on buying votes. >>

I get your point as well. MJ

DBSTrader2 · February 10, 2012 7:28AM

Didn't you hear?! They're no longer wasting public tax money on buying your vote - - the Super-PACs, paid for by the super-1% have already bought Congress, which is spending most of their time now figuring out how to re-write the Constitution so that they will someday no longer NEED us to vote...........

BAJJERFAN · February 10, 2012 7:39AM

<< 

<< 

<< 

<< I don't report losses or depreciation on my assets, so why should I report gains? >>

Because it's the law and you could get fined or thrown in jail I suppose if audited. That is plenty of motivation for most.

You don't pay taxes on appreciation of assets either so why would you report losses on depreciation? The taxable event happens when selling not holding.

MJ >>

If your losses exceed your gains, do you have to report them on your taxes? >>

I will let an accountant field that loaded question. If there is a check, deposit or withdrawal involved I like to report it or make my accountant aware of it. MJ >>

I don't believe that you can claim a net loss on a hobby like coins. Losses can be used to offset gains but can't exceed them.

derryb · February 10, 2012 8:38AM

Schedule D, Investment income - net losses on investments are capped at $3k per year after you have first offset all your gains with losses. All losses over $3k are carried over to the next year along with any excess you have accumulated from previous year(s) that you haven't used up. Consider it losses in the bank adding up.

amwldcoin · February 10, 2012 9:41AM

This topic brings up some off topic thoughts about the tax system and how it has screwed me in my opinion.

Estimated taxes.....I had a good year....owned equipment etc. Next year was going well....after my 3rd quarter estimated tax payment I had a major equipment failure. All would have been well if I hadn't paid those damn estimated taxes that I no longer owe. Yes....I went out of business....Thank You Mr Fair Uncle Sam! Estmated taxes are a crock a sh*t for small business owners.

Another great situation. I used to be an avid bowler. Played in a few amatuer tournaments. I finally won! Damn...they 1099'd me. No you cannot write of the 10's of thousands of dollars you spent bowling in leagues,purchasing equipment(balls,shoes,etc.)etc. to acquire the skill to win that tournament! Tell me that is fair!!!!

Give it time and the Liberals will spread the wealth by taxing your assets harder and harder....soon to the point no one will own anything.

Raybo · February 10, 2012 10:10AM

I have $300+ of 90% silver that I have accumulated (pulled from circulation from the last........40+ years), if I sell it at melt do I have to pay taxes on the profit over face?
I know i'm free and clear if I throw it in a vending machine but what are the ramifications (tax wise) if I do sell it at melt?

TwoSides2aCoin · February 10, 2012 10:25AM

<< I have $300+ of 90% silver that I have accumulated (pulled from circulation from the last........40+ years), if I sell it at melt do I have to pay taxes on the profit over face?
I know i'm free and clear if I throw it in a vending machine but what are the ramifications (tax wise) if I do sell it at melt? >>

Is there really a profit if you're trading wealth for debt ? That sounds like a recipe for loss of purchasing power tomorrow.

Raybo · February 10, 2012 10:31AM

<< 

<< I have $300+ of 90% silver that I have accumulated (pulled from circulation from the last........40+ years), if I sell it at melt do I have to pay taxes on the profit over face?
I know i'm free and clear if I throw it in a vending machine but what are the ramifications (tax wise) if I do sell it at melt? >>

Is there really a profit if you're trading wealth for debt ? That sounds like a recipe for loss of purchasing power tomorrow. >>

I'm serious Joe!

If the buyer gives me a reciept for the sale am I liable for any taxes?
Heck, I just pulled them from circulation and now the IRS wants to know how much more I made over my investment?

TwoSides2aCoin · February 10, 2012 10:36AM

Ray, the truth is if we make money, we pay taxes on it ( okay, we're obligated to) I'd like to buy your silver.

ModernCoin · February 10, 2012 10:41AM

<< If the buyer gives me a reciept for the sale am I liable for any taxes?
Heck, I just pulled them from circulation and now the IRS wants to know how much more I made over my investment? >>

Some say it's a good idea to simply sell stuff for cash at a show/shop and never look back. People who want to keep their own money and not contribute their fair share are clearly criminals and should be prosecuted to the fullest extent of the law.

Regards,

Your_Congressman

Raybo · February 10, 2012 11:06AM

<< Ray, the truth is if we make money, we pay taxes on it ( okay, we're obligated to) I'd like to buy your silver. >>

Joe,

I started working at a grocery store back in 1972 when the price of silver was? Most of my silver was pulled between 1972 and 1980, I would like to know how the IRS would figure the "profit" of my sale?
If THEY would like to pull up spot prices for those years than yes, I will pay my fair taxes for the profit above spot (than i'd have to figure out how much 90% I aquired each and every year!).
I just happen to be a coin collector and silver goes.................TINK!

lkeigwin · February 10, 2012 11:30AM

<< 

<< Ray, the truth is if we make money, we pay taxes on it ( okay, we're obligated to) I'd like to buy your silver. >>

Joe,

I started working at a grocery store back in 1972 when the price of silver was? Most of my silver was pulled between 1972 and 1980, I would like to know how the IRS would figure the "profit" of my sale?
If THEY would like to pull up spot prices for those years than yes, I will pay my fair taxes for the profit above spot (than i'd have to figure out how much 90% I aquired each and every year!).
I just happen to be a coin collector and silver goes.................TINK!

>>

Raybo, if you're saying you collected silver from the till at face and later sold it for a profit the tax math is very simple. Your taxable profit is what you sold it for minus what you paid (face).

I try to be a good citizen when it comes to paying my share but really...sometimes the mind boggles.
Lance.

Raufus · February 10, 2012 11:38AM

<< Didn't you hear?! They're no longer wasting public tax money on buying your vote - - the Super-PACs, paid for by the super-1% have already bought Congress, which is spending most of their time now figuring out how to re-write the Constitution so that they will someday no longer NEED us to vote...........

>>

Being that the Super-Pacs are not paying for all of the handouts which are given out to buy votes I think that they're still using the tax dollars which are confiscated from me.

Raufus · February 10, 2012 11:41AM

<< 

<< If the buyer gives me a reciept for the sale am I liable for any taxes?
Heck, I just pulled them from circulation and now the IRS wants to know how much more I made over my investment? >>

Some say it's a good idea to simply sell stuff for cash at a show/shop and never look back. People who want to keep their own money and not contribute their fair share are clearly criminals and should be prosecuted to the fullest extent of the law.

Regards,

Your_Congressman >>

Love the "Fair Share" B.S. which they alway spout.

I think that it's safe to say that it's not the top 10% who pay over 70% of the fed income tax who are not paying thier "fair share"....

TwoSides2aCoin · February 10, 2012 11:55AM

edited for bad behaviour

amwldcoin · February 10, 2012 12:03PM

Ray...I guess the liberals on the board don't want to hear my senario.....Go on take the money and run!

Raybo · February 10, 2012 12:53PM

<< 

<< 

<< Ray, the truth is if we make money, we pay taxes on it ( okay, we're obligated to) I'd like to buy your silver. >>

Joe,

I started working at a grocery store back in 1972 when the price of silver was? Most of my silver was pulled between 1972 and 1980, I would like to know how the IRS would figure the "profit" of my sale?
If THEY would like to pull up spot prices for those years than yes, I will pay my fair taxes for the profit above spot (than i'd have to figure out how much 90% I aquired each and every year!).
I just happen to be a coin collector and silver goes.................TINK!

>>

Raybo, if you're saying you collected silver from the till at face and later sold it for a profit the tax math is very simple. Your taxable profit is what you sold it for minus what you paid (face).

I try to be a good citizen when it comes to paying my share but really...sometimes the mind boggles.
Lance. >>

Wrong Lance,

I pulled most of my silver between the years of 1972 and 1975 when the average price of silver was what?
Are you going to start with the inflation thing?
If my silver is worth $7000 today what was it worth in 1975? How the heck would you or the IRS figure out the difference?
I'm also a "good citizan", but I'm calling shenanigans on your math Lance..........and I didn't sell it yet.

Ray

lkeigwin · February 10, 2012 12:57PM

If you haven't sold it you owe nothing. If you have, then the taxable amount is the difference between what you paid and what you got when you sold. It has nothing to do with what silver was worth then unless you paid the silver price.
Lance.

Raybo · February 10, 2012 1:26PM

<< If you haven't sold it you owe nothing. If you have, then the taxable amount is the difference between what you paid and what you got when you sold. It has nothing to do with what silver was worth then unless you paid the silver price.
Lance. >>

You gotta be kidding me, right?
I'll just buy $300 in gumballs ay my local super market.

lkeigwin · February 10, 2012 1:39PM

Sorry...no joke.

Back in the early '70's my home was burgled and I lost a small collection. Stuff from my grandmother, mid-late 1800's silver. I had no insurance so I looked into the loss I could write off. The IRS insisted I could only declare the value that the gifter paid, not what it was worth when I received it or when it was stolen.

I got to write off a little more than two dollars for 3c pieces, 2c coppers and some seated dimes and quarters. I felt like I was robbed twice. I haven't checked but I don't think the tax code has changed.
Lance.

PerryHall · February 10, 2012 9:19PM

<< I have $300+ of 90% silver that I have accumulated (pulled from circulation from the last........40+ years), if I sell it at melt do I have to pay taxes on the profit over face?
I know i'm free and clear if I throw it in a vending machine but what are the ramifications (tax wise) if I do sell it at melt? >>

Most people would sell it a little at a time for cash to stay under the radar and not pay any tax on it. I'm not saying this is right but tax avoidance is very common especially when people see how our government pisses away their money.

Just sittin' here, doin' my taxes, and...........

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