Lets say you sell a bunch of Silver Eagles and make a large profit. Do you show the profit as a cap gain on your income tax return or is it taxed as a hobby? I'm thinking cap gains get taxed at about 20% this year. What % if you have to show it as a hobby?
If you keep your sales under the reportable threshold....... https://www.sellyourgold.com/tax-reporting-requirements
Hobby income is taxed as ordinary income. If your intent was as an investment when purchased, then it would become a capital gain [short or long term -- depending on the holding period]
I've always reported it as ordinary income. I don't know what I'd have to do differently to represent it as an "investment" and get the capital-gains rate, but it seems to me that I decided that wasn't an option. Disclaimers: I'm not a lawyer, I'm not a tax-law enthusiast, and I haven't yet been audited, so I've got no official confirmation from the IRS that I've been doing it right.
It is taxed as a capital gain, and must be classified as a 'collectible' so the tax rate may be higher than for other capital gains.
If you don't regularly sell coins, then mums the word! j/k If you sold to a coin shop you have to report it but I don't know how other than to count it as additional income.
That's because the taxpayer is ultimately responsible. Just because your tax adviser/accountant tells you something, legal or illegal, doesn't mean they are assuming the legal liability for an incorrectly filed return. You're the one who'll pay the piper, not the guy who told you to do it, or even filed the return for you. You still sign the return and can suffer the consequences, not them. Edit: oh yeah.....LOL
https://www.irs.gov/taxtopics/tc409 https://www.irs.gov/pub/irs-pdf/p550.pdf https://www.irs.gov/instructions/i1040sd
Not giving tax advice... There is a reason dealers go to shows with stacks of cash. They know some sellers of under $10k of coins to sell wish to get paid in cash. I do the same, going to coin shows or shops with cash on me. What they do with that is none of my concern. That is for them to decide what their basis is, investment intent at purchase, etc. I do get the absolute best price with Benjamin's in hand.
