IRS & Your Coins

I heard that the Internal Revenue Service is going to Tax any coin transactions over $600.00. Has anyone else heard of this? Does anyone know when it will take effect? Or is the information incorrect?

Thanks,

Steve

 

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Unless they change the IRS codes it has to be worth more than $9999.99.
But if it is a Metal IRA the codes are up for a review, changing??? if IRS wants a change they normally get there way.:kewl:

 

Jello,
I have more than a few 100oz bars of silver. I was told they were IRA compatable. My thought was that I really didnt want to link them to any of my IRA accounts, because that it would create a record of them that would always be there for IRS scrutiny. Is that what your refering to as a Metal IRA?

Thanks,

Steve

 

Yes, Metal IRA.
the more unlinked/ unreported the better in my book!!!
but store them in a bank Safety Deposit box that is what I do

 

GDJMSP,
This is one of my fears about TPG, it will make a record of the coins owner and the coins preceived value, that will forever remain in NGC"s computer banks for IRS review. They will want to tax me when I sell my coins. My plan was to sell my coins as I bought them one at a time. Do you think it will be long before the IRS begins monitoring the TPG"s?

Jello,
Im clear now, the IRS will be interested in my bulk holdings, I kinda thought so, but didnt want to think it.

Thanks,
Steve

 

There's no telling what they will tax with VAT.

It will soon be the old joke about the new IRS Short Form:

1. How much do you make? __________

2. Send it in. ___________

 

GDJMSP,
I understand that income reporting would be a must. Im glad you feel the TPG records are secure. My thought was that the people setting up registry sets and the like were looking for trouble down the road should the IRS make an arbitary ruling to aquire the records.

Thanks,

Steve

 

I wish there would be some legislation to allow me to cash in my investment coins in as a sort of Roth IRA. I paid for all of my collection with taxed income already, and after inflation I'll most likely lose money on most of it anyway. I know there would be a great deal of paperwork involved, and probably not make it worth peruing. I think I'll just pass it on to my kids and let them decide how to report any financial gains.

 

Like has been mentioned, all gain from the sale of coins, is reportable taxable income, there is no $600 limit. The IRS probably could summons TPG records to prove your gains. Of course, this would only be a concern of those who do not report their gains. Get the point?

 

I agree. You can run, but you can't hide forever. If they want it, they can get it.

You say you're going to sell your coins "one by one". So why are you so paranoid?

And if you do have tens (or hundreds) of thousands of dollars of profit, you SHOULD be paying some taxes.

Sheesh.

 

statequarterguy,
Yes you were quite clear. The situation I am looking at is rather then having a coin shop after I retire, I will become a regular vendor at one of the many farmers markets in my area, and there is a bunch of coin dealers at them. My plan was to fly under the radar as far as much as possible. So hows the market for state quarters? I dont have any of those.

Steve

 

There is something coming up in the laws about reporting transactions $600 and up. It has folks worried. I'll try to find the info and post it. I don't think it is law as of now.

 

Read this link.
http://www.cato-at-liberty.org/2010/04/26/costly-irs-mandate-slipped-into-health-bill/
Check this thread for more info.
http://forums.collectors.com/messageview.cfm?catid=42&threadid=773583&highlight_key=y&keyword1=%24600

 

ldhair,
Im not the brightest bulb in the pack, but I did read that the new transaction reporting level was going to be $600.00, for everyones transactions. Thanks for the links, for the life of me I couldnt remember where I read it.

Thanks for posting,

Steve

 

GDJMSP;
I see. I thought it was going to apply to individual transactions...

Im hoping your right,

Steve

 

Looks like the rules for 1099's are changing. However, the requirement to report the income/gain on your income tax return has not changed, the only thing that's changing may be the requirement to report the amount on a Form 1099, so that fewer will be able to underreport their income. According to this article, the IRS has not yet clarified what those changes are. Of course, you can assume, with the proliferation of computers and automated transactions, the IRS will continue to push for more reporting, not less, thus achieving the goal of reducing the underground economy. However, I'd speculate that the huge increase in the reporting burden will cause the IRS to scale down the increased number of reportable transactions in any one bill. Here's an analysis of current and changed 1099 reporting requirements.


Businesses and not-for-profit organizations are accustomed to IRS rules that require them to report certain payments on annual Form 1099 information returns. However, the recently enacted healthcare law imposes surprising new Form 1099 reporting requirements (no doubt so the Gov’t can better track underreporting of income).
Complying with them may add significantly to your organization's paperwork burden. While the new rules don't apply to payments made before 2012, it's not too early to start gearing up to deal with them.

Key Point: For many organizations, the new rules will require issuing 1099s for all sorts of business payments that they never had to worry about before. And the IRS will receive 1099s detailing how they spend money on a whole new range of business expenses. However, the healthcare legislation does not require Form 1099 reporting of payments that are made for non-business reasons.

Current Rules in a Nutshell

Background: For many years, businesses have been required to report various payments on different versions of Form 1099. For instance, when a business pays $600 or more during a calendar year to an independent contractor for services, the business must issue the contractor a Form 1099-MISC that reports the amount paid that year. The business must also furnish a copy of the Form 1099-MISC to the IRS. This reporting procedure helps contractors remember to include the payments on their tax returns, and it helps the IRS ensure that income is reported.

Under rules now in effect, other types of payments that businesses must report on Forms 1099 include:

1. Commissions, fees, and other compensation paid to a single recipient when the total amount paid in a calendar year is $600 or more.

2. Interest, rents, royalties, annuities, and income items paid to a single recipient when the total amount paid in a calendar year is $600 or more.

When a Form 1099 is required, it must show:

· The total amount for the calendar year;
· The name and address of the payee;
· The tax ID number (TIN) of the payee (For privacy reasons, it's okay to show a truncated TIN on a 1099 issued to an individual);
· Contact information for the payer; and
· The payer's TIN.

If your business doesn't have a payee's TIN, you may be required to institute backup federal income tax withholding at a 28 percent rate on payments.

In most cases, the rules summarized above apply to payments made by not-for-profit organizations since they are generally considered to be businesses for Form 1099 reporting purposes.

If a payer inadvertently fails to issue a proper Form 1099, the IRS can assess a $50 penalty. The penalty for each intentional failure can be $100 or more.

Reporting Payments to Corporations

Under the rules that currently apply, most payments to corporations are exempt from Form 1099 reporting requirements. However, there are a few exceptions. For instance, payments of $600 or more in a calendar year to an incorporated law firm must be reported on Form 1099-MISC.

Example: Your business makes $30,000 in monthly payments to rent office space from a corporate lessor. Under the current rules that apply today, there is no 1099 reporting requirement for the payments, because they are made to a corporation.

Reporting Payments for Property

Under current rules, there is also generally no requirement to issue 1099s to report payments for property (such as merchandise, raw materials and equipment).

Example: Your business buys a delivery van, display shelving, and computer equipment. Under today's rules, there's no 1099 reporting requirement for these purchases.

What Will Change in 2012 and Beyond?

The healthcare legislation makes two big changes to the existing Form 1099 reporting rules and a third change that is hard to assess without further guidance from the IRS.

First Change: Payments to Corporations Must Be Reported. Starting in 2012, if your business pays a corporation $600 or more in a calendar year, you must report the total amount on an information return. Presumably, Form 1099-MISC will be used for this purpose, or the IRS will develop a new form. (Payments to corporations that are tax-exempt organizations will be exempt from this new requirement.)

Another burden: Your business must also obtain a TIN from each affected payee to avoid the requirement for backup withholding of federal income tax.

On the other side of the coin, if your business sells property or you operate a corporate business, you will have to supply customers with your TIN to avoid backup withholding on payments made to you.

Third Change: Payments of "Gross Proceeds" Must Be Reported. Here's where the new upcoming rules get more confusing. Under a third new rule that will take effect in 2012, payments of $600 or more in "gross proceeds" to a payee in a calendar year must be reported on an information return. At this point, it is unclear what this new reporting requirement is meant to cover. The best guess is that it is meant to cover payments made to non-corporate payees, such as restaurants and other small businesses. We are awaiting IRS clarification on this issue.

 

The market for state quarters has been declared dead by the big dealers. lol However, I see today on eBay, rolls are selling well. I'd say the dead market is the "lull after the storm" and the series is and will be popular down the road.

As far as "flying under the radar", I know many do, but I don't and wouldn't recommend it. The IRS views underreporting of income more negatively than over reporting your expenses and has stiff penalties, including fraud, which carries with it monetary penalties and PRISON TIME. Best advice is to report all your income and concentrate on making more money rather than cheating on your taxes. Believe me, most of the big guys pay their taxes and they didn't get big by concentrating on ways to cheat.