taxes

[FormerTeller]

Been mulling this over for awhile, and with tax time coming up thought I'd throw this out to you all for input.

How many of you either pay taxes, or plan to pay taxes once you eventually sell your silver? Assuming you have to pay capital gains taxes, it would seem prudent to keep track of your expenses each year (mileage at least), and claim that as a deduction each year.

On the other hand, I've heard that profit gained from a "hobby" is not taxable.

Comments?

 

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[Diver_Down]

Profit? Selling coins? I thought it was catch-and-release.

 

[The_EE]

Been mulling this over for awhile, and with tax time coming up thought I'd throw this out to you all for input.

How many of you either pay taxes, or plan to pay taxes once you eventually sell your silver? Assuming you have to pay capital gains taxes, it would seem prudent to keep track of your expenses each year (mileage at least), and claim that as a deduction each year.

On the other hand, I've heard that profit gained from a "hobby" is not taxable.

Comments?

Buying and selling American coins cannot be taxed by the Feds as far as I am aware of. Some States might do it but not many. I know Commiefornia does.

 

[Numismaniac]

This topic has been on here numerous times. Bottom line is that if you make a capital gain from coins (even if it's a hobby) you have to claim it as income on your taxes. It's crystal clear in the tax code. Turbotax even asks you if you made any money from a hobby such as coin or stamp collecting.

I'm not going to get into the question of who does and who doesn't claim it....

The Government does tax coin sales BTW. Coin dealers have to pay income tax (and even sales tax in some states) on their profits/sales...

I will say that if you sell small amounts in a cash transaction the odds of the IRS ever tracking you down are exceptionally small. Now, if you get a 1099 from whoever purchases your bullion you better report it because the IRS will find you in that case. My Dad made a ton of money in the gold market over the past few years and his transactions where large enough to require 1099s. You bet he paid the taxes. He still made a huge profit even after taxes.

HH

 

[conleytheking]

How much silver would make you get a 1099

 

[Numismaniac]

I'm not 100% sure on the figure for a 1099, and they have been changing the laws lately. I think at least a grand. Any coin dealer will be able to tell you for sure as they have to be up on the laws. They can get in big trouble for not complying.

Here is one story I found from 2010, but I remember hearing that the dollar amount was raised because of all the backlash:

http://www.economicpolicyjournal.com/2010/07/irs-clarification-on-1099-forms-for.html

 

[FormerTeller]

This topic has been on here numerous times. Bottom line is that if you make a capital gain from coins (even if it's a hobby) you have to claim it as income on your taxes. It's crystal clear in the tax code. Turbotax even asks you if you made any money from a hobby such as coin or stamp collecting.

I'm not going to get into the question of who does and who doesn't claim it....

The Government does tax coin sales BTW. Coin dealers have to pay income tax (and even sales tax in some states) on their profits/sales...

I will say that if you sell small amounts in a cash transaction the odds of the IRS ever tracking you down are exceptionally small. Now, if you get a 1099 from whoever purchases your bullion you better report it because the IRS will find you in that case. My Dad made a ton of money in the gold market over the past few years and his transactions where large enough to require 1099s. You bet he paid the taxes. He still made a huge profit even after taxes.

HH

This is what led me to consider claiming a deduction for expenses this year. I figure if I'm going to have to pay taxes eventually, I might as well get everything I can from the IRS right now. Think about how many miles each of us drives to and from banks picking up and dumping. At 55.5 cents per mile deduction, that adds up pretty quick. Not sure how it works if you claim expenses during a year in which you don't sell, but surely there's got to be a rule for taking a business loss while accumulating inventory.

I just can't decide if I want to let the IRS know how much silver I'm accumulating. Granted, my bank activity will give something away, but when it comes time to sell, I plan on using every trick in the book to keep under the minimum reportable amount each time I sell, and thus not pay taxes.

 

[Numismaniac]

I would advise you to talk to a tax pro and come up with a good plan on this one. The IRS doesn't play around.... No need to risk getting sideways with them, they are a ruthless bunch.

 

[Lyfeguard]

Profit? Selling coins? I thought it was catch-and-release.

 

[MIhunter]

I would adivse against taking a deduction for expenses in any tax year unless you claim some profits.

It is a RED FLAG to the IRS if you claim a loss in a business for multiple years.

I know it sounds unfair but the IRS will disallow expenses unless you show profits. They will claim that CRH is a hobby and can't be claimed as a deduction. If you make money CRHing they will want taxes paid on the profits. It is a double standard but they have been sucessful in defending this practice in court.

Example, your are CRHing and spending $2000-3000 on gas, computers, plastic tubes, internet serivce, etc. DO NOT claim these as deductions unless your are selling coins and making some money. Then it is okay to list your expenses, but it is red flag to claim a business enity that loses money multiple years in a row! Even if you think it will show a profit some time in the future.

Your should keep records on your purchase price of any coins or precious metals, unless you bought it for face value!

 

[$nack-Money]

this is solely a catch and release hobby as mentioned earlier. Preferably being released 2-3 weeks after capture into a coinstar for good measure

And as far as Uncle Obammy goes, when he pries my silver coins from my cold, dead hands! ... because, obviously, they will never be sold for profit (just dumped into the coinstar as mentioned above).

 

[Darth Walker]

What is CRH? Silver coins stoped circulating more than 40 years ago. There is nothing out there. We all here are liers and we do not find anything so you can not sell anything.

DW

 

[SFBayArea]

Can't believe people here are advocating for tax dodging. If you can count your miles and your gas receipts for deductions, then do it. Obviously if you made only a couple bucks, it's not worth it to report it. But if you sold and you got a couple thousand in profit, those are capital gains. You can probably do it the Romney way and get away with 15% if those coins you got over a year ago. No one keeps track of when they got the specific coin anyhow. I hope people here will do the right thing and not become tax dodgers. Reporting sales of coins is nothing compared to reporting tons of stock trades. Now that is a pain in the A$$. Hopefully people here will do the right thing and put it down. You lump the sum of all coin sales minus costs & face value into one transaction to make it easy. IRS is not going to question you on that.

Doesn't count if you are just holding. Only counts when you sell.

 

[minkybodl]

I know that they have recently passed laws where any amount over 600 has to be reported by the coin shops so what might not have been a problem before may start to be one. Depends on the coin shop if they report it or not right now I guess.
Back in the 80's I read a book that said a good way to save on taxes was to turn a hobby into a business which we did with papered Siberian Huskies we raised. Had to INC and get a name, we got a tax number so that we could buy things, dog food and supplies, without paying sales tax. The trick was to have enough expenses like gas, mileage, belonged to a dogsled club, and supplies to lower your tax libility. You only had to make a profit in one out of six or seven years to make it legal which we did with selling two litters. I don't know for sure if a coin hobby is legal or not I just know that we did it with dogs and reported everything for 6 or 7 years until we sold the female once my wife had our son.
Just saying that for people who do sell alot they might want to check into if turning a coin collecting hobby into a business is IRS legal with an accountant.

 

[StevoCBR]

What is CRH? Silver coins stoped circulating more than 40 years ago. There is nothing out there. We all here are liers and we do not find anything so you can not sell anything.

DW

nothing to see here, these are not the coin roll hunters you are looking for!

 

[Numismaniac]

nothing to see here, these are not the coin roll hunters you are looking for!

Exactly! I can find and stockpile as much silver as I want. The Gov't (AKA The MAN) can't keep me down for that.

I may just decide to feed it all back into a Coinstar someday (If I actually find any)

 

[legend76]

What is CRH? Silver coins stoped circulating more than 40 years ago. There is nothing out there. We all here are liers and we do not find anything so you can not sell anything.

DW

nothing to see here, these are not the coin roll hunters you are looking for!

I thought of the force halfway through the thread, you beat me to it

 

[legend76]

I know that they have recently passed laws where any amount over 600 has to be reported by the coin shops so what might not have been a problem before may start to be one. Depends on the coin shop if they report it or not right now I guess.

That law you speak of, has been repealed.

"New York entrepreneurs are breathing a collective sigh of relief after President Barack Obama last week signed a bill to repeal a provision of the federal health care reform law. It would have required small business and real estate owners to file 1099 forms with the government for purchases of $600 or more.

"It's very helpful," said David Vinjamuri, president of ThirdWay Inc., a marketing training company in Manhattan. "My business outsources many functions to freelancers. It's a hassle every year. Not having to track smaller payments and report them relieves me of extra paperwork."

Mr. Obama on April 14 signed H.R. 4, repealing the provision of the Patient Protection and Affordable Care Act. The law was scheduled to take effect in January 2012. "

http://www.gata.org/node/10085

 

[jr98119]

I'm hard at work preparing tax returns for millionaires, but i will take 2 minutes to quickly reply to several things mentioned above:

1. The threshhold for a 1099-Misc is $600.
2. The "hobby loss rules" mean that you have to make a profit in at least 2 out of the last 5 years to be able to deduct expenses in any year.
3. Um, gold and silver sales are taxed at a "collectable" rate of 28%, not a long-term capital gains rate of $15%.

I'm in a generous mood today after finding 4 40%'ers in 2 boxes last night. Ask me any questions on this topic for the next 2 hours and I will waive my hourly fee!

 

[FormerTeller]

I'm hard at work preparing tax returns for millionaires, but i will take 2 minutes to quickly reply to several things mentioned above:

1. The threshhold for a 1099-Misc is $600.
2. The "hobby loss rules" mean that you have to make a profit in at least 2 out of the last 5 years to be able to deduct expenses in any year.
3. Um, gold and silver sales are taxed at a "collectable" rate of 28%, not a long-term capital gains rate of $15%.

I'm in a generous mood today after finding 4 40%'ers in 2 boxes last night. Ask me any questions on this topic for the next 2 hours and I will waive my hourly fee!

Interesting. So it sounds like the double standard is in effect, in that you cannot deduct expenses for collecting year after year unless you sell/make a profit 2 out of every 5 years, and yet when you do sell you get hit with what is currently a 28% tax. I'm not necessarily advocating breaking the law, but it further sounds like they only "catch you" if you sell more than $599 at a time.

I figure all of this is a moot point, as the tax laws will surely change several times before I eventually sell (or before my heirs pour the coins down Coinstar...).


Thanks to all for the responses!