Coin Sale IRS reporting?

You are right, it is kind of funny, but actually, literally every one of us are said to be in violation of some law, or regulation at least 4-5 times each day on average here in "the good ole U.S.A."

 

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Quite a few and yes. I am not an IRS worker, but I was on a US Treasury panel that worked with the IRS. I have many friends over there, some are coin collectors. I am not saying that to say I would ever "turn anyone in". I am just relaying why I know some about their systems. Yes, getting cash and keeping your mouth shut would help, but they have access to your bank records, your credit card records, and many other records. Let me ask you, don't you think they might find it suspicious if a person takes $1000 out of their bank every month for a few years in a row to pay bills, and then suddenly does not take out any money for a few months? Its little slip ups like that they tie together. The IRS has spent DECADES imputting income from people who professionally hide cash, like gamblers and servers, (no offense to anyone in those professions, just two I could think of who can have variable non-reported cash). Entire departments have spent their entire career developing ways to catch them. So again, a few hundred is not going to likely be caught or cared about really, but large amounts can possibly be traced. Is it worth your freedom? Not paying taxes peeves them off, not REPORTING income and actively trying to hide it is when the US Attorney and criminal charges appear.

 

please do not forget to report any winnings from gambling [ too bad you can't write off all the losses , unless you are a professional gambler ]

 

You can, its just very difficult to prove. The IRS does not accept casino records on its face, but some courts have allowed it. Also, some courts have allowed records of contemporaneous recording of amounts wagered and lost. So, you do not need to be a professional to claim gambling losses against gains, its just the paperwork you need to do to prove it is not something most people do. Most don't like to write down and track losses.

 

The IRS has more power than the military. They WILL take everything you own and put you in jail. Never advocate illegal activity and ALWAYS pay them what they deserve by law.

 

"you do not need to be a professional to claim gambling losses against gains"

Do casinos send gamblers' records to the IRS?

Does the IRS have a cash threshold amount before they're interested in gambling wins/losses?

 

However, the public should/could ultimately determine what the I.R.S. etc. can do. After all "we the people" are the government, in the final analysis.

 

Yes they do, and the have the legal system and jails to put you in if you don't give it to them.

Tax avoidance is perfectly legal so there is nothing wrong with suggesting it. Tax EVASION is what is illegal. The question is at what point does avoidance become evasion? I'm sure the IRS wll be happy to let you know.

But what they can find out you might find rather painful.

If they have to make a payment to them above a certain amount, yes they do. And since most casinos try to get gambler to sign up for ther rewards programs they have extensive records on a lot of peoples gambling records both small and large. If you have their players cards and use them they have records on all your purchases and wagers. And they are all available to the IRS.

 

But, not hobby losses.

 

" After all "we the people" are the government:

oh, my experience is professional politicians run the country (into the ground)
If We the People ran the country I don't believe the government would have the borrow >.40¢ of each dollar it spends. I don't believe we'd be in Afghanistan/Iraq going on fourteen years, etc.
OTOH, We The People elect the "politicians." so I guess you're right.

 

Yeah, I get your point, and agree much with it, sadly.

 

Hell here to have a Kool-Aid stand you need a permit..... not kidding here.

 

I am going to state word for word where YOU CAN DEDUCT LOSSES on a hobby straight from the IRS web site.

Please quote for me, again directly from the IRS web site, where it specifically says that you CAN NOT deduct losses on a "not for profit activity" such as a hobby or a farm that you engage in for pleasure.


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.


So there it is in black and white - you can deduct but only up to the amount of income and cannot be used to offset other income.

Now lets see your quote from the IRS website.

 

Hobby loss rules state any deductions for the hobby are treated as misc deductions, so subject to 2% AGI, (meaning you get to deduct nothing until its more than 2% of your AGI), and there is no loss carryforward or carry back. Losses can only apply to current year income. So your quote is technically correct @JustHad2 but not going into all of the details. The details of this is where they really kill you. The net effect of these rules to most people is no deduction, and even when some deduction is allowed, its very small.

 

I was tempted to say that I have even heard of rare cases where kids were forced to shut down their stand for "peddling" a product without a license. Truely tragic!

 

@medoraman - I absolutely agree as that is covered in the section 525 publication. However, since you are only able to deduct your losses in a hobby related activity against your income related to the hobby related activity, the other income would not come into the equation according to their example using Adriana. Further when you get deeper you are refered to Publication 529 where it stipulates where and when that 2% is entered into the equation.

"Generally, you apply the 2% limit after you apply any other deduction limit. For example, you apply the 50% (or 80%) limit on business-related meals and entertainment (discussed later under Travel, Transportation, Meals, Entertainment, Gifts, and Local Lodging ) before you apply the 2% limit."

My intention was not to pretend to be a tax advisor. I just get tired of folks using absolute terms when declaring that you can not deduct losses from a hobby. It just is not true.

Matter of fact, if you read the above quoted where it speaks of 50% to 80% on travel and meals, etc... Remind you of anyone in particular?

Wine anyone?

 

While the absolute was not true, in practice its closer to the truth than saying all hobby losses are deductible. So you get some relief, but not much. But point taken they are partially recoverable against current year gains, but NET losses for a year are not deductible against other income, and are not usable in any other tax year. So if you are talking about NET losses, @Treashunt is completely correct. By the way, I believe Frank was a tax practitioner. I have a CPA certificate, but he has called me out on a few things I misspoke. difference between education and experience.

The sad part of this is, like many things, a few ruined it for everyone. Losses used to be usable, and then you had rich jerks saying they were in the horse raising business to deduct millions of dollars of their private ranch off income taxes. So, the excesses of a greedy few ruined it for everyone, like most things in life, especially in the tax code.

 

I concede to both of you in education. Experience --- well let's just say that I am experiencing first hand what is to me a truly "sad part" when dealing with the current tax code. This being that even the people who work for the IRS can not come to a conclusion as to where I fall in the code.

Some say capital gains, which one portion of the code directly addresses "coins and art sales" as fine collectibles which are subject to a capital gains tax, and then there is this convoluted mess we are discussing which also deals with one aspect of coin collecting which apparently Uncle Sam did not consider - people collect coins as a hobby.

The tax code is a mess and we all know it. Enough said.

 

I agree sir its so much of a mess even professionals have a hard time of it, let alone the general public. Its pretty pathetic an average citizen cannot comprehend what the government is asking of him, (pathetic on the government's part, not the citizen's).