$600 Sale? Get Ready for Tax Form

[obediah]

*I'd contact your Reps on this one! It was one of literally thousands of things tucked into the Obamanators Healthcare reform.

$600 Sale? Get Ready for Tax Form
money By David L. Ganz, Numismatic News
June 29, 2010
money
Other News & Articles


This article was originally printed in Numismatic News.



A blizzard of paperwork could be about to hit numismatics.

Passage by Congress of the national health care legislation has had an unintended consequence to the nation’s coin collectors, vest-pocket dealers who buy and sell coins, and larger dealers who are frequent buyers of coins that collectors periodically liquidate as they trade up their collections for better coins, or simply sell to take a small profit or loss.

What has happened is that effective Jan. 1, 2012, the whole system of giving and receiving Internal Revenue Service 1099 forms will be turned on its head and all persons (including corporations) who are in business will now have to give 1099 tax reporting forms for coins and other goods that they sell as well as buy.

The responsibility for issuing forms kicks in at $600 for coins or bullion – not a very high level and one that has already started sounding alarm bells. It doesn’t matter in what form payment is made, whether cash, check, credit card, or Yap stone money, the $600 threshold applies.

There’s a bill introduced by Rep. Dan Lungren (H.R. 5141), which has gathered over 80 members of Congress as co-sponsors to repeal this section. Evidently, however, the drafters of the provision think there is a $17 billion loophole that this plugs.

Rare Coin Investing
Rare Coin Investing
Want to broaden your retirement portfolio beyond stocks and bonds?
Buy your copy today!

The Industry Council for Tangible Assets is alerting member dealers and the public at large in the hope that some sense of outrage will lead to a ready modification before the law becomes operational in 2012.

http://www.numismaster.com/ta/numis/Article.jsp?ad=article&ArticleId=11843

 

[AGCoinHunter]

Yep, stock up now. They will be tracking what you buy and sell. This is just the beginning.

 

[d2arcing]

so would be getting a box from a bank be like ordering...?


this is whack

 

[RIcoinhunter]

What next?

 

[mountainman 2]

Would this apply to buying boxes from a bank? You're not really buying, but trading money for money. No profit in and of itself.

 

[obediah]

What next?

History will inform US if we would only examine it; we have maddmen & women in power today- oppression and death is coming upon US!

 

[GMan00001]

So under this new legislation, say I have a silver dollar that is worth $1000.

What's to stop us from selling that $1 silver coin for a $599 and as part of the sale (or a different sale..depending on how it is rung up), sell something nominal (like a 50 cent plastic tube or a coin flip) for $401.


Separate note: (just my observations/thoughts)
The $600 limit just made any coin difficult to cross the $599 threshold, thus holding back appreciation for better coins. Of course, once it gets to $700 or $800 or whatever value is considered enough to pay the "stupidity tax", that really won't apply, but I think getting there will be difficult due to market forces. Thus under the new legislation, it would never make sense to buy anything in the $550-$600 range as it has limited appreciated growth potential near term as it will likely be capped at around $600 for awhile (which could be many years). Of course, I could be wrong or maybe the tax only starts applies after $600 and not for dollars $1 through $599


Oh and I should point out.... I haven't read the bill...

 

[obediah]

So under this new legislation, say I have a silver dollar that is worth $1000.

What's to stop us from selling that $1 silver coin for a $599 and as part of the sale (or a different sale..depending on how it is rung up), sell something nominal (like a 50 cent plastic tube or a coin flip) for $401.


Separate note: (just my observations/thoughts)
The $600 limit just made any coin difficult to cross the $599 threshold, thus holding back appreciation for better coins. Of course, once it gets to $700 or $800 or whatever value is considered enough to pay the "stupidity tax", that really won't apply, but I think getting there will be difficult due to market forces. Thus under the new legislation, it would never make sense to buy anything in the $550-$600 range as it has limited appreciated growth potential near term as it will likely be capped at around $600 for awhile (which could be many years). Of course, I could be wrong or maybe the tax only starts applies after $600 and not for dollars $1 through $599


Oh and I should point out.... I haven't read the bill...

That is not the point my friend- we have a CRIMINAL government that is fully committed to oppressing US; sure some will find ways to evade the draconian measures but I'd not find any solace in this while my nation under such tyranny.

 

[firebird21]

Big Brother is watching and taxing for the air we breath ( a meter on the body will moniter the amount) is coming soon.

 

[Rich Hartford]

What next?

History will inform US if we would only examine it; we have maddmen & women in power today- oppression and death is coming upon US!

I highly doubt it.
HH
Rich

 

[GMan00001]

So under this new legislation, say I have a silver dollar that is worth $1000.

What's to stop us from selling that $1 silver coin for a $599 and as part of the sale (or a different sale..depending on how it is rung up), sell something nominal (like a 50 cent plastic tube or a coin flip) for $401.


Separate note: (just my observations/thoughts)
The $600 limit just made any coin difficult to cross the $599 threshold, thus holding back appreciation for better coins. Of course, once it gets to $700 or $800 or whatever value is considered enough to pay the "stupidity tax", that really won't apply, but I think getting there will be difficult due to market forces. Thus under the new legislation, it would never make sense to buy anything in the $550-$600 range as it has limited appreciated growth potential near term as it will likely be capped at around $600 for awhile (which could be many years). Of course, I could be wrong or maybe the tax only starts applies after $600 and not for dollars $1 through $599


Oh and I should point out.... I haven't read the bill...

That is not the point my friend- we have a CRIMINAL government that is fully committed to oppressing US; sure some will find ways to evade the draconian measures but I'd not find any solace in this while my nation under such tyranny.

I didn't miss the point, nor will I try to argue that I think our government is currently on the right path because I don't believe we are. I was just pointing out that I think the legislation will oppress our hobby in other indirect ways as well.

 

[2Cents]

So under this new legislation, say I have a silver dollar that is worth $1000.
What's to stop us from selling that $1 silver coin for a $599 and as part of the sale (or a different sale..depending on how it is rung up), sell something nominal (like a 50 cent plastic tube or a coin flip) for $401.

Still over $600. You will get a 1099. If it’s like normal 1099s then you would get one at the beginning of the year for all of the transactions from that entity for the previous year. If you sold 300 pennies for $2 each on 200 different days to the same dealer then you would get a 1099.

Separate note: (just my observations/thoughts)
The $600 limit just made any coin difficult to cross the $599 threshold, thus holding back appreciation for better coins. Of course, once it gets to $700 or $800 or whatever value is considered enough to pay the "stupidity tax", that really won't apply, but I think getting there will be difficult due to market forces. Thus under the new legislation, it would never make sense to buy anything in the $550-$600 range as it has limited appreciated growth potential near term as it will likely be capped at around $600 for awhile (which could be many years). Of course, I could be wrong or maybe the tax only starts applies after $600 and not for dollars $1 through $599
Oh and I should point out.... I haven't read the bill...

You only pay the tax on the gain. If you bought a silver dollar for $500 and sold it for $800 you would get a 1099 showing the $800.sale but would only be taxed on $300.

I have not read the fine print but based on how simlar gains are taxed and reported that is how it will most likely work.

 

[obediah]

So under this new legislation, say I have a silver dollar that is worth $1000.

What's to stop us from selling that $1 silver coin for a $599 and as part of the sale (or a different sale..depending on how it is rung up), sell something nominal (like a 50 cent plastic tube or a coin flip) for $401.


Separate note: (just my observations/thoughts)
The $600 limit just made any coin difficult to cross the $599 threshold, thus holding back appreciation for better coins. Of course, once it gets to $700 or $800 or whatever value is considered enough to pay the "stupidity tax", that really won't apply, but I think getting there will be difficult due to market forces. Thus under the new legislation, it would never make sense to buy anything in the $550-$600 range as it has limited appreciated growth potential near term as it will likely be capped at around $600 for awhile (which could be many years). Of course, I could be wrong or maybe the tax only starts applies after $600 and not for dollars $1 through $599


Oh and I should point out.... I haven't read the bill...

That is not the point my friend- we have a CRIMINAL government that is fully committed to oppressing US; sure some will find ways to evade the draconian measures but I'd not find any solace in this while my nation under such tyranny.

I didn't miss the point, nor will I try to argue that I think our government is currently on the right path because I don't believe we are. I was just pointing out that I think the legislation will oppress our hobby in other indirect ways as well.

Obama is only carrying on the Bush agenda.

 

[firebird21]

How can they tax you on something like this, even if it's over $600? Obama promised that there would be NO new taxes for anyone making less than $250,000 per year. Answer that one please.

 

[GMan00001]

So under this new legislation, say I have a silver dollar that is worth $1000.
What's to stop us from selling that $1 silver coin for a $599 and as part of the sale (or a different sale..depending on how it is rung up), sell something nominal (like a 50 cent plastic tube or a coin flip) for $401.

Still over $600. You will get a 1099. If it’s like normal 1099s then you would get one at the beginning of the year for all of the transactions from that entity for the previous year. If you sold 300 pennies for $2 each on 200 different days to the same dealer then you would get a 1099.

Separate note: (just my observations/thoughts)
The $600 limit just made any coin difficult to cross the $599 threshold, thus holding back appreciation for better coins. Of course, once it gets to $700 or $800 or whatever value is considered enough to pay the "stupidity tax", that really won't apply, but I think getting there will be difficult due to market forces. Thus under the new legislation, it would never make sense to buy anything in the $550-$600 range as it has limited appreciated growth potential near term as it will likely be capped at around $600 for awhile (which could be many years). Of course, I could be wrong or maybe the tax only starts applies after $600 and not for dollars $1 through $599
Oh and I should point out.... I haven't read the bill...

You only pay the tax on the gain. If you bought a silver dollar for $500 and sold it for $800 you would get a 1099 showing the $800.sale but would only be taxed on $300.

I have not read the fine print but based on how simlar gains are taxed and reported that is how it will most likely work.

Good points. I take back what I said before as it no longer makes sense.

Obama is only carrying on the Bush agenda.

I think the government has been on the wrong path for quite some time. Both parties are essentially equal right now (and equally guilty). The primary difference between them is which pet projects they choose to spend our money on when they get power. And lately apparently the race is to see who can bankrupt the U.S. faster.

 

[Rich Hartford]

How can they tax you on something like this, even if it's over $600? Obama promised that there would be NO new taxes for anyone making less than $250,000 per year. Answer that one please.

Just google no new taxes for anyone making less than $250,000 per year. You will get your answer
Rich

 

[AGCoinHunter]

How can they tax you on something like this, even if it's over $600? Obama promised that there would be NO new taxes for anyone making less than $250,000 per year. Answer that one please.

No offense, but if you are that naive.... I have a bridge to sell you along with some waterfront property in the desert.

 

[lahmejoon]

There is no such thing as materiality when it comes to the internal revenue code. If you sold a coin for $100 for which you paid $5, you technically have reportable income of $95, regardless of whether or not you received a 1099. Of course, very few people are this honest and the reality is that the IRS will not make a big deal out of $95 of reportable income. However, if you have a series of these that adds up to a more substantial amount and you deposited the proceeds into a bank account, upon doing a cash analysis they may see that your deposits (net of balance transfers) greatly exceed your reported income and want to know where these additional deposits came from.

All that being said, although the government is probably missing out on a stream of tax revenue, I agree that imposing 1099 reporting on coin transactions is foolish. As it is, the left hand doesn't know what the right hand is doing. It's just complicating things more.

 

[ivan salis]

do you coin roll for silver --then sell it off now and then for a bit of extra cash ? well good old uncle sam wants a piece of your "profiets"--- and if you say cash in say $600 or more dollars worth of crh gained silver per year he wants a cut of it --- have a nice day.


good ole grubbermint 101 --- find out all the ways folks might can possibly make a bit of "side" money ( coin rolling for silver and cashing it in , scrap metal recycling , ect --then you track what they do --if they make any money at it == tax that "income" --if they do not "declare it" on the income tax forms -- hit em with penalities and high interest too as well-- oldest trick in the book.

gambling is the same way once a $2 bet wins over $600 bucks --20% is automatically witheld *at the horse or dog track -- so long as your losing its a "hobby" and losses are not deductible , however if you win over $600 they treat you like your "hobby" just became a "bussiness" and they want to tax your "profiets" -- of course if you can "show" losses ( say $600 bucks of losing tickets) that prove you did not "pull" ahead any --they will rebate the 20% (*$120) witheld for taxes at the end of the year after hold it interest free all that time but you can only show a loss to the amount of winnings * not more than that.-- so you lose --too bad its a "hobby" and you can not write off the losses unless you claim to be a "professional gambler" for a living -- but if you win --uh its a "bussiness" -- yep gives a new meaning to rigged game .

 

[obediah]

How can they tax you on something like this, even if it's over $600? Obama promised that there would be NO new taxes for anyone making less than $250,000 per year. Answer that one please.

Have you ever heard a politician who did not lie! Obama's heathcare "reform" will tax all who make more than $14K who must pay their own healthcare tax; we will see dramatic new taxes as well as inflation which will help the States who use sales tax revenues. Inflation is the only way the governments can hopeto recover but it will be at our expense the people of AmeriKa, and I say it that way with a "K" cause we are a socialist land now, we will be pressed & oppressed beyond measure.