I heard that if I sell more than $600 worth of coins to a dealer in a year, the dealer reports it to IRS. Does this mean that all money after $600 will be taxed? Example, I sell a coin for $700, will I be taxed on the $700 or the extra $100? I'm on Social Security and never have to file because my income is so low.
No dealer would actually want to report it because then they would have to pay tax when they sell the item. If the deal is all cash there is no record of the transaction. That is why whenever I purchase an expensive item from a dealer I pay cash he knows to not charge tax or even give me a larger break. Cash is king!
I could be wrong. But I'm under the impression that this doesn't really have anything to do with charging sales tax to the customer. Its more about the income taxes of the dealer. I could be wrong though, in which case I'm sure someone will correct me
I'm not sure if it's about sales tax as much as the government wanting to tax individuals (April 15) or penalize who sell more than that to a dealer. It is connected with Obama's health care bill. Political statements not allowed in posts. It takes effect January 1, 2012.
Yeah I'm pretty sure it has more to do with the income tax. After profiting $600 it has to go through the IRS in regards to income. The kind of thing where you have to fill out one of the 1099 tax forms. There is no one that tells you when or gives you the form though, like no one is keeping track, so you have to be careful or it can count as not reporting your income and you can be audited. However, the most important point of this is that it is over $600 in profit. If you are cherry picking coins and buying them for, lets say, $100...and then reselling them for more and making a profit, that is when it counts as income and gets added up to the $600, after which you would need to fill out the additional tax form. However, if you bought a silver coin now for $100, and sell it later for less than that, you are not making a profit so that doesn't count, and is not taxable. It's kinda like differentiating between selling as a hobby, or as a business to make profit. At least that it my understanding of how this works.
Tyler, Adam is correct. Gilligan is not talking about sales tax. He is talking about Capital Gains Tax. What he is concerned about is getting a 1099 reporting to the IRS money received from the sale of coins or bullion. Gilligan, the reporting requirement that you are concerned about was part of the Health Care bill (that those in Congress did not read before they voted for it). It has since been rescinded.
Would the dealer require us to give him our Social Security number to put on the 1099 form in that case? Kinda scary. As for profit, If I paid $1,000 for a coin and sell it for $900, wouldn't that put me over the $600 even thought I lost $100 in profit?
No because you sold the coin for less than what it was worth...or at least less than what you originally paid for it. Because you lost $100 on it you didn't actually make any profit off the sale. Because of that it isn't part of the $600. You have to think of it in terms of a business. If you were a business, at even, and you bought the coin for $1000 you would then be at -$1000. When you sold it for $900, you would go up to -$100. Technically you're still in the red so it doesn't count as profit. And all they really care about is the profit as income. EDIT: Also I don't believe he would need your SSN. When he files a 1099 for his taxes it is only for the profits he made for his sales. If you yourself had made over $600 in profit by selling to him you would have to submit your own 1099 reflecting the sales YOU made to HIM, or anyone else for that matter.
Right. I misread the first post. I was thinking you were speaking as the buyer, but you are talking about selling TO the dealer. So I guess then you are the one with taxable income. That is kind of concerning. They tax us every opportunity they get and still have a 14 trillion dollar deficit
I am not a tax expert but I do not think that is correct. It is not the duty of a coin dealer (for example) to determine how much profit you are making on a coin that he buys from you. That is your duty. The coin dealer simply reports to the IRS (using the 1099 form) what he paid to you for your coins. I don't know what the threshold is but if that portion of the Health Care bill had not been rescinded the dealer would have been required to report (using the 1099 form) all purchases of $600 or more. You would receive the 1099 and it would be your job to report that income on your tax return and also show what you paid for the item so you would "only" be taxed on your gain. Of course, if you are not able to produce a receipt or other proof of your purchase the IRS will probably assume your cost was zero and tax you on the entire sales price. Yes, but as i stated above, the $600 threshold has been rescinded.
If I buy a coin for $100 and sell it for $600 (net $500 profit), does that mean it is exempt from capital gains tax and not reportable? Also, is this rule per transaction? If I buy 10 of the above hypothetical coins for $100/each ($1000 total) and sell them for $600 each ($6000 total) and now have a $5000 profit, it that reportable? Does it matter if I sell them to one person or to 10 different people?
I'm no tax expert either...and just going off of what I read. But that wasn't what I meant anyway, I meant the same as you. I was just trying to say that it the $600 threshold was based on profit, but that the dealer would have to report his own profits, as you would have to report yours. The dealer wouldn't (and would have no way of) reporting your profits on a coin that he bought from you. I just thought that it had to be $600 in profit, and it would have to be reported by the whichever person was profiting. Again I am in no way a tax expert or anything. I was under the assumption this was along the same lines of the "selling things on eBay for profit" and having to report it as income after $600. Perhaps I am totally wrong, just offering up my opinion/understanding.
You owe tax on ALL your income. Sometimes it is up to you to report it. Other times (e.g., using the 1099 form) it is up to others to report it.
Just for info doing business in cash does not mean you are exempt from reporting it for your income tax. Now for the edit to add that how you report it (Schedual C) says you only pay tax on profits if you end up selling for a loss it is a wash.
Aye, and just because a cop isn't around doesn't mean it is legal to run a stop sign, so you should go directly to the nearest police station an just fess up to your crimes... What ever. Cash payment = Exempt in my book! Just like in my state, when you file they ask you if you have made any purchase over the Internet that year and if so to report it all and pay a "Use Tax" which is equal the the states "Sales Tax", um... sure,,,, I guess I didn't make any Internet purchases just like the millions of others filing!!!
Remember, politics is not discussed on this forum, but on the PRWE forum ( Politics, Religion, wor;d events. Jim
