What tax to I pay on selling a coin I didn't pay an exact amount for?

The IRS and your state board ( if you have such) is hard to convince that your expenses are part of a business rather than part of your hobby. Deducting 500 in hotel and travel to go to a show where you buy $200 of coins and eventually sell them for $400 will not make them happy. Read your tax guides

 

Log in or Sign up to hide this ad.

No.

 

It seems to have not been mentioned here so far, but if you have sales over $20,000 on Ebay, they will generate a 1099K for you and the IRS. And you would be liable for taxes that way.

 

If I remember correctly, you only have to pay taxes on capital gains if you don't reinvest them. I believe you have 2 years to reinvest before you have to pay the taxes. Capital gains aren't like profit as in a business, taxes on profits are due each year but you file those as a sole proprietor as a business owner. If you are an individual reinvesting capital gains, upgrades to your home are concidered investment as are other purchases that are not concidered consumables but investments. Art is an investment.

 

Just use the price guide for the period of time when you bought the coin. If you don't have a red book back that far, look at auction records.

 

The $10,000 threshold is for financial institutions (i.e. your bank) reporting the transaction to the Feds for, among other things, tax purposes and to discourage illicit activities such as money laundering. It says nothing about the tax obligation.

 

Don't sweat the small stuff brother, till you have the Black 'Blackhawks' flyin' over your abode.........

 

T

That's also really good to know!

 

There seems to be a lot of confusion here between capital gains and trading profits.

 

Actually it has to fit two requirements of which you only mentioned one.


"Starting in 2011, PayPal is required by the IRS to report the sales of goods and services for customers who, in a single year receive:

• More than $20,000, AND
• 200 or more payments.

The new IRS 6050W changes apply to all payment providers, including PayPal. This includes payments received after January 1, 2011, with the first reports sent to the IRS in early 2012.

You can find more information and FAQs about the new IRS 6050W requirements on the PayPal IRS 6050W website."

 

Why would you have to pay taxes on a $12 profit?

 

very wrong

 

ditto.

 

Tired, but I'll try:

1) Wrong. "If I remember correctly, you only have to pay taxes on capital gains if you don't reinvest them. I believe you have 2 years to reinvest before you have to pay the taxes." In fact, very wrong. The old (very old) rollover rule) was for personal residences, no longer applicable.

2) wrong. " Capital gains aren't like profit as in a business, taxes on profits are due each year but you file those as a sole proprietor as a business owner. If you are an individual reinvesting capital gains, upgrades to your home are concidered investment as are other purchases that are not concidered consumables but investments. Art is an investment" Too wrong to reply here, I'd need an essay.
1) 'Capital gains aren't like profit as in a business' correct
2) " taxes on profits are due each year but you file those as a sole proprietor as a business owner" kinda correct, use schedule C.
3) " If you are an individual reinvesting capital gains, upgrades to your home are concidered investment as are other purchases that are not concidered consumables but investments." Ignore this statement, I don't have time. Far too wrong. a) Reinvesting gains, wrong, see above b) homes are an investment, capital improvements are added to basis ; c) "upgrades to your home are concidered investment as are other purchases that are not concidered consumables but investments." " what the heck does this mean?
4) "Art is an investment." correct sentence: Art CAN BE an investment.

PLEASE do NOT rely on the above gibberish.


more to follow.

 

True, you can only realize losses in 2 of 5 contiguous years, and must show a profit in the other 3 years, or the IRS can declare it [the losses] a hobby loss, and not deductible.

So many rules, so little time

 

Technically, you must report miscl income [from a 1099 miscl of $600 or more. against that you can deduct expenses.
The net [here $12] is profit and taxable. However, under $600 nest, not subject to Social Security and medicare taxes, as earned income

 

best answer in this thread.
allocate your cost basis, vs sales price, or value.

 

going back to sleep.

 

Partially right (from my experience).

A hobby loss for an individual can be deducted but only up to the amount of income.

IRS Publication 535 covers the IRS determination of whether you are "carrying on an activity for profit" and the above is only one of the 9 useable measures and "no one factor alone is decisive."

IRS Publication 525 covers deductions for Not-For-Profit activities and hobbies.

"Other Income

The following brief discussions are arranged in alphabetical order. Other income items briefly discussed below are referenced to publications which provide more information. Activity not for profit. You must include on your return income from an activity from which you do not expect to make a profit. An example of this type of activity is a hobby or a farm you operate mostly for recreation and pleasure. Enter this income on Form 1040, line 21. Deductions for expenses related to the activity are limited. They cannot total more than the income you report and can be taken only if you itemize deductions on Schedule A (Form 1040). See Not-for-Profit Activities in chapter 1 of Publication 535 for information on whether an activity is considered carried on for a profit."

Yet there is another area that covers Capital Gains from Coin Collection or Art profit. I don't recall it right off hand but it is on my computer in a folder labeled "Fight_With_The_IRS" .... I am not in jail --- yet.