Handling Cash Transactions

How do others handle coin purchases where the dealer will only take green cash and no invoice is provided? Is this a red flag for accounting, tax, and potentially other legal issues?

Of course, an argument can be made that you can always refuse a tempting deal if the terms are not to your liking.

So if I were audited and the IRS or state DRS asks for substantiation of the cost basis of the transaction, are private notes sufficient?

 

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Any high end transaction I've had has always included an invoice. The small stuff (<$100) I don't sweat......

 

I would avoid anyone who refuses to give you a receipt/invoice. Without proof of purchase, what is your recourse if the coin (or whatever) turns out to be counterfeit? Even small amounts add up over time.

Now if the seller is a real jerk, you might even considering him/her to the IRS :devil:. They are always interested in people who attempt to hide income.

 

Actually I think the guy is honest except for the legal compliance issues. When I take cash out of my bank account I note that online on the online account with the dealer's name. So if the busy bees at Bank of America want to connect the dots that is their business. Actually the guy is doing this coin thing in his retirement, he is a nice Siciliano.

 

In that case, I'd just ask for a receipt. If he still won't give one, I'd politely explain to him that he has just lost your business. The receipt is for your protection.

 

Also a receipt helps with any insurance claims for proof of value. I'd walk away if it's more than $100 and they won't provide an invoice or receipt.

 

Frankly, I don't know why the guy does not get into compliance, it doesn't seem that he has anything to hide. A long term dealer has done over $100K cash with him this year.

You work in your deductions and all business expenses and the tax rate is not that bad. But I have seen a lot of "cash only" deals, or a dealer who says he will have to charge sales tax if it is not a cash deal. These days with Turbo Tax and every other software available, there is no excuse. Plus Staples does business cards and invoices for businesses, there is NEBS, too.

 

Totally Agree!! :yes:

 

I do 99% of all my transaction's in cash. The only time I don't is online. If the person doesn't want to take plastic or check's that's their prerogative. I visit quite a few shops that's cash only, dealers at coin shows cash only.

If they set themselves up to take plastic are you willing to pay more for the coin plus an added 3% for the additional fee for them to take your card. From some of your other post's, I would suspect the answer to be no and a thread stating how unethical that person is and how dare they try to make up the cost of doing business the way you want too. Are you willing to wait seven day's for your check to clear when you buy the coin in person.

As for a receipt ,I only get one maybe 50% of the time and then it's only an adding machine type register receipt. Unless I'm dealing with National dealers at show's then I receive invoiced type receipts

 

Good points, and most dealers will eyeball everyone they do business with and make judgments about shady characters that they don't want to buy from.

You are in Northern Wisconsin, say hello to my cousin if you visit Stevens Point. The law is applied differently in different parts of the country. We are not Canada, where they try to standardize tax and other laws throughout the country.

 

Probably IF you include notes on all your transactions. If you only have the occasional note they would probably be skeptical, but with notes on everything they would probably accept them.

 

I also agree I have no problem with cash only. Its the lowest cost transaction cost for him, any other type of payment costs him more money, (check's cost being a bad check). However, a reciept is perfectally acceptable to demand. Many collectors like to keep them for proving basis of their collection. If he refuses to give a reciept, I would not buy from him. Its also crucial to have if any of your purchases end up being stolen goods. If the police confiscate a coin for being stolen, with a reciept you have both proof you did not steal it, and a legal recourse to get your money back. Without a reciept, you are "hanging in the wind".

Chris

 

Simple answer: I will not do business with any dealer that doesn't provide an invoice. Like G, It has never been an issue....Mike

p.s. it is important, for tax purposes, for every collector to have and keep their receipts to establish a cost basis for their coins.

 

Some advise not to give receipts, like "Boston T. Party", aka, Kennth Royce, a prolific author--"Bullet-Proof Privacy", "You and the Police", "Good-bye April 15". Clearly there is a reason, mainly taxes and legal rights of the buyer.

I have not heard of anyone getting a bad check recently, but the buyers and sellers know one another.

 

Interesting thread. "The ethics of coin dealers and taxation." I am not aware of how dealers handle taxes, and am not interested in how they handle it. As far as I am concerned it is none of my business. Just give me a receipt or invoice please. It kind of reminds me of a guy I used to play high stakes cards with. He would donate to every single candidate running for every office, from every party in this County. Do you think he ever got shook down taxes? Personally if I were involved in the trade of precious metals I would want to stay on the up and up, but taxation would drive coin prices up severely.

 

It seems that not wanting to give a receipt is to avoid anything that taxing authorities could use against you (as a seller). Wanting a receipt (as a buyer) establishes ownership and a cost basis. AND legal evidence of the transaction should it need to be returned.

Wanting to avoid taxes could be construed as an attempt to avoid your responsibilities as a citizen (but that gets into an entirely different thread).

As far as checks, the dealers I work with will (to my amazement) accept checks (and even send the coins before they receive the checks. For dealers that do not know me, they always wait until the check has cleared (and if they are smart, would wait a few more days to sure that I'm not running some sort of scam. My preference is to send a U.S. Postal money order as they are safer than any individual's checking account.

Merry Christmas to all!

 

So far all the stores I have been to wants to charge tax on credit card purchases. They don't give receipts either but I have never asked for one. But sometimes I think its a loss for the store when it comes to the credit card. With the prices with some of these coins, who is going to walk around with a thousand dollars or more in their pocket? And if you pay with a cc the interest added onto a thousand dollar purchase is pretty high. I know I wouldn't want to pay that much tax on a coin.

 

Coins are a financial privacy investment both buying and selling. I hardly have anyone asking for receipts on cash transactions unless its some guy who has never been there.

 

I try to have a receipt for all these types of purchases for cost basis/ estate planning issues. Seems prudent. Cash only is fine, but only with a receipt, in my opinion.