"Is metal detecting proceeds Tax-able ?" Here's what the CPA says:

[Tom_in_CA]

I have a local md'ing friend in my area, who is also a CPA by profession. I asked him:

"Are the proceeds of our hobby technically tax-able income ? Eg.: the face value of clad we spend, the melt value of rings we smelt down, the rare coins we sell on ebay, etc.... ? "

Here was his answer: "Generally speaking, all income or gain is taxable. If you find a nickel on the ground in the parking lot, it's taxable. "

He also agreed that you can take write-offs, for your expenses. Eg. : equipment, batteries, fuel, etc.... But that if, in 3 yrs, you're not showing a profit from this "business", that the IRS can step in, audit you, and decide that it's a "hobby" and not a "business". And thus begin dis-allowing your deductions/write-offs. You would simply be taxed on the income you're reporting, with no write-offs.

He also chuckled that Youtube, as we all know, if FILLED with us md'rs doing our latest show & tell ring dances, eh ? Hence technically nothing to stop the IRS from stepping in to say "where's our cut?". I suppose we could then claim we are not "selling" them, hence not realizing any income, eh ?

I am sending him this link, in the hopes that he'll chime in, to concur I am saying this right. Ok everyone: I know that, at this instant, all T'net members will start properly reporting their md'ing incomes

 

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[Duckshot]

I hope he chimes in, cause although all income is taxable I am not convinced that all nickels are income, or even "gain".

Edit, and what about the guy that lost that nickel? He writes it off and the guy that found it writes it in. Nothing was made by anybody but the taxman.

So, there is a tax on lost nickels? Now I have heard everything- except the statute definition of " income".

 

[Peyton Manning]

bean counters

 

[AlienLifeForm]

Do not ask about it. If a CPA gets wind of it, then the IRS gets wind of it...

 

[Tom_in_CA]

Do not ask about it. If a CPA gets wind of it, then the IRS gets wind of it...

Huh ? You're not advocating Lawlessness here on a public forum, are you? Tsk tsk :/

 

[winmeek]

Any income minus expenses is taxable. If I subtracted all expenses involved to find treasure and still came out in the black I would be sorta happy to pay taxes.

 

[FreeBirdTim]

I'll start reporting every penny I find as soon as the IRS goes after corporations that stash billions in offshore accounts to avoid paying taxes on that income. Why don't lawmakers and the pencil pushers get off their butts and nail the billion dollar businesses that skirt every tax law in this country instead of harassing the middle class over a few dollars? Because they don't have the guts to take on someone who can hire million dollar lawyers who will make them look like the inept clowns they really are, that's why...

 

[AlienLifeForm]

Huh ? You're not advocating Lawlessness here on a public forum, are you? Tsk tsk :/

No, everything I have ever found metal detecting has been in my own yard and previously lost by me.

 

[boogeyman]

Huh ? You're not advocating Lawlessness here on a public forum, are you? Tsk tsk :/

Illegal I don't see any sick birds do you? I only found 7 cents eyeballing parking lots last year.......

 

[Detecto]

Now if you really wanna get picky...

“If you find and keep property that does not belong to you that has been lost or abandoned (treasure-trove), it is taxable to you at its fair market value in the first year it is your undisputed possession.”

So if you find a diamond ring, and it's FMV is $3,000, your supposed to pay tax on it, EVEN IF YOU KEEP IT AND DO NOT SELL IT.

Couple That Found $10 Million in Gold Coins Will Have to Hand Over HOW MUCH in Taxes? ? TheBlaze

So even if they never sold any of the coins, they would of had to of paid taxes on it.

 

[darktower007]

Yeah.. bout that lol [emoji38] Dang IRS


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[Tom_in_CA]

Now if you really wanna get picky...

“If you find and keep property that does not belong to you that has been lost or abandoned (treasure-trove), it is taxable to you at its fair market value in the first year it is your undisputed possession.”

So if you find a diamond ring, and it's FMV is $3,000, your supposed to pay tax on it, EVEN IF YOU KEEP IT AND DO NOT SELL IT.

Couple That Found $10 Million in Gold Coins Will Have to Hand Over HOW MUCH in Taxes? ? TheBlaze

So even if they never sold any of the coins, they would of had to of paid taxes on it.

Excellent link detecto. Thanx ! The same principle applies with a lesser value item(s), but just on a smaller scale.

Ok forumites, you are now crying alligator tears of grief and guilt. Right?

 

[Tom_in_CA]

And I think I understand the logic of that . It would be no different than when your employer pays your paycheck. You are taxed at the time he cuts your check. Whether or not you spend the money right then or not.

 

[ivan salis]

when one factors in gas and other car upkeep spent , batteries bought , machine cost to buy , digging tools and pin pointer and other "hobby cost" like lunch out and so on ...most folks would safely be "in the hole" ..fiscally if it loses money --its a "hobby" if you earn any positive cash flow money at it the irs thinks of it as a bussiness

 

[Brian Finder]

I don't think they would look twice unless you set it up as a business and try to deduct all the expenses.

 

[Tom_in_CA]

I don't think they would look twice unless you set it up as a business and try to deduct all the expenses.

Sure. No one's denying that they've got "bigger fish to fry " But for a mere $100 (I accept PayPal), we can be persuaded to keep quiet about your md'ing proceeds to them! Haha

 

[Chadeaux]

"Generally speaking, all income or gain is taxable. If you find a nickel on the ground in the parking lot, it's taxable. "

So . . . the medical bills resulting from an accident while picking up a dime on the Wally's World parking lot is actually now an "business expense" as the dime is taxable income thus meaning that I was engaged in a for profit activity (business)?

 

[Tom_in_CA]

So . . . the medical bills resulting from an accident while picking up a dime on the Wally's World parking lot is actually now an "business expense" as the dime is taxable income thus meaning that I was engaged in a for profit activity (business)?

Sure. If you "threw out your back" while picking up that dime (or were injured while md'ing), then sure: Those medical bills would be an expense to offset your income.

HOWEVER, if you fail to show a profit after 3 yrs. of this "business", then it can be re-classified by an auditor as a "Hobby", not a "business". And perhaps they can dis-allow future business deductions. In which case, all your income is no longer offset by expenses anymore ?

Try this:

https://www.irs.gov/uac/business-or-hobby-answer-has-implications-for-deductions

This is only for whether it's "hobby" or "business" . So the parts alluding to "intent" (ie.: do you intend to live off this income) is NOT saying that you're still not liable to report the income. But it's more for whether or not you can label it as "hobby" versus "business".

Not sure. I haven't studied it too deeply. Any CPA's to chime in now ?

 

[darktower007]

Sure. If you "threw out your back" while picking up that dime (or were injured while md'ing), then sure: Those medical bills would be an expense to offset your income.

HOWEVER, if you fail to show a profit after 3 yrs. of this "business", then it can be re-classified by an auditor as a "Hobby", not a "business". And perhaps they can dis-allow future business deductions. In which case, all your income is no longer offset by expenses anymore ?

Try this:

https://www.irs.gov/uac/business-or-hobby-answer-has-implications-for-deductions

This is only for whether it's "hobby" or "business" . So the parts alluding to "intent" (ie.: do you intend to live off this income) is NOT saying that you're still not liable to report the income. But it's more for whether or not you can label it as "hobby" versus "business".

Not sure. I haven't studied it too deeply. Any CPA's to chime in now ?

There are always loopholes. This is the right path if you have a card and a locating business that always looses money.. than you are in better shape on paper. Also knowing the IRS rules helps. I know enough to be dangerous I guess. Depositing sums of cash frequently and you have a direct deposit job is audit city. Buy a safe and keep cash in it or a safety deposit box if your really making a lot selling your finds.

 

[b3y0nd3r]

I donate ALL my finds to charity.