tax consequences of coin collecting?

hi All,
Can someone point me to good information online that deals with tax consequences of coin collecting? I'm interested in things like: (1) if I sell a coin, will the IRS hit me up for taxes on the sale price? (which I guess means I should have kept track of what I was paying for everything!). (2) When I kick-off, are my kids going to be hosed by the IRS?
thanks
andy

 

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Theres not really too much online on that specifically, unless you go to the IRS site and can understand tax code. But, do a search on this site....we've discussed this countless times. There are ways around inheritance tax for your kids. But unless you fail to report profit made on sales, you're just stuck with taxes there. Best of luck.
Guy~

 

I'd say see an accountant if you have that many coins to worry about.

But:
1. Not for the sale price but for the capital gains you had on it. (profit)
2. not sure what you mean by hosed but there is estate tax's that would be due if left to heirs.

 

Many coin collecting software programs will keep track of this for you - particularly the Carslile Dev. Corp. However, that program has other issues but that is a topic for another thread and another day.....

 

What kind of amounts are we talking about here??

 

Do you have any links to any free programs that will allow me to track my coin purchases better? Right now I am just writing down the buy price, condition, and seller on pieces of paper. There has got to be a better system than this.

 

To start with just how would the IRS know that when you die you leave a fantastic amount of coins to someone? If you left it to me, for instance, I would say nothing.
Also, just who in the IRS is watching what you buy and sell in coins? There are lots of dealers selling coins every day and pay no taxes at all on that.
Flea markets are full of possibly millions of people that sell almost anything on Earth and pay no taxes of any kind either.
My Son and his wife know about my coins, thier names are on my Safe Deposit boxes as co-owners so if something happens to me, they just go empty it all. No taxes there either.
If your really worried about the IRS, I could solve all your problems. Just send everything to me now.
You must realize that a coin does not have a seriel number, a model and make number, a factory seal or anything that makes is identifiable. yes if it is one of only 10 made maybe, other than that, no one knows what you have. OR DO THEY? Please check your home for devices planted there by the IRS.
If you do find any, please shout loudly that you don't know me.

 

Topic came up here recently, links in the thread you may also follow...

Let's talk about form 1099K & form 8300.

 

I don't understand how I would Pay Taxes on Currency.. Say I find a Modern Star 2.00 Bill and turn around and sell it for 50.00... AARGGEE!!
I will have to check the link above..

 

Carl I applaud you....

And I've already "swept" the house for "bugs" so not to worry.....

 

Carl: You raise a very interesting point within your post. I am wondering if slabbed coins with serial numbers will be treated any differently from raw coins. Obviously, if someone has a registry set then it is well known that they have it. You make a nice case for sticking with raw coins. Many people have been pulling coins from circulation over their lifetime or buying coins directly from the US Mint and paying sales tax, so I cannot imagine how the IRS would handle that when they decide to sell or pass along to a relative? TC

 

"....hello, IRS....There's this place called Coin Talk and....."
Guy~

 

Oh Guy, you wouldn't dare.....

 

Maybe you will get lucky :goofer: and lose money, then you don't have to worry about the IRS!!

Lack

 

I wonder if the IRS checks out sites like this to determine who to audit. Google is a wonderful thing.

 

I agree that if you have a registry set, brag about your coins on a web site which many lately do, show it to way to many people and worse yet, give a list to your insurance agentcy.
I play it safe with all purchases. Never use a check, credit or debit card nor anything with my name on it. Mostly that is for security reasons not so much to avoid the tax people.
And true when you order a proof or uncird or anything from the USMint, there is always that record of that purchase. HOWEVER, no one at the Mint or the IRS knows what you did with them. For example every year I get about 10 to 15 sets of each and give away for Chrisstmas Presents and what people do with them is also inknown to me or the IRS.
Some of the items pointed out by GDJMSP may or may not be valid.
Which is one more reason never to pay with a check or credit card.
Also, as to friends or neighbors or anybody, I've said this a long time ago, when it comes to insuring your coins the best insurance is to KEEP YOUR MOUTH SHUT.
I am not saying we all should do what ever it takes to avoid paying taxes on anything, just let our hobbies alone. No one taxes anyone when they sell a model plane they made. No one taxes people at flea markets for selling what they find in an alley. So why pick on coins???????

 

Of course they do. I've always wondered about the moderators here.:smile:goof::vanish:

 

Since (1) has been explained by GDJMSP I will try to explain question (2).

For starters if your kids pay taxes they are probably already getting hosed by the IRS.

When you "kick-off" as you put it it will be up to your executor to take an inventory of everything you owned at the moment of kick-off. All these items are required to be valued at there fair market value. Cash and securities are easy to value but things like real estate and collectible coins would usually require and appraisal. Once the total value is determined the executor can deduct any liabilities you owe when you kick off. This net number will be used to determine if your estate owes any tax.

Congress has played alot of games with this number over the years and its future is currently undefined. Once they get around to dealing with it you can be relatively certain it will fall somewhere between $1,000,000 and $5,000,000. If the number is $1,000,000, for example, your estate will owe tax on the net value of your estate above $1,000,000.

The nice thing about this, if your estate is not taxable, is whatever your estate items are valued at the date of kick-off becomes the cost/basis for those people you pass the items down to. For example if you buy a coin for $100 during your lifetime and you sell for $500, you have a $400 taxable profit, but if your kids inherit the same coin valued at $500 when you die, then they can sell it for $500 and have a zero profit. I think alot of people think they are getting over on the IRS by not reporting a collection when they die, but they may actually be depriving their heirs of an increased cost/basis.

If you plan to have a sizeable estate when you kick off, depending on what the current law is, you should really talk to a tax professional because there are various strategies of moving value of your estate to your kids way before you kick off.

 

Actually, I read this on another forum regarding taxes for those who sell online and accept paypal, credit cards etc...

It is a very interesting article and might **** off some of the online sellers.

http://www.auctionbytes.com/cab/abu/y210/m03/abu0258/s03