Question for Coin Dealers, Receipts.

As a dealer, here's my two cents:

For receipts, I am more than happy to provide one if asked, and if I'm dealing with a big spender I generally do it as a courtesy, but outside of big spenders or people buying a large quantity of coins, I rarely write one as it's hardly ever mentioned.

For proof of sales, though, and to keep track for my own good, I write down what I sell on a sales order book. It can come in handy if someone forgets an item, which has happened before.

If that happened, dealers would likely sell a lot less at coin shows for at least a few months. I can recall two or three people who have asked if I can do credit card payments; they all had no cash on them. The cheapest card reader I've found online is close to $100 which explains why a lot of the dealers at the coin show in Indianapolis (the main one I go to monthly) don't have them.

 

Log in or Sign up to hide this ad.

The simple answer is "because the government has determined that collectible items with value (art, books, coins, cars, etc.) are items that are subject to capital gains and thus subject to capital gains tax".

If you are just expressing a general opposition to the moral or ethical basis for any tax, then I don't have an answer.

And also, the government doesn't care what coins lie in your safe. They only care about whether or not you have made a taxable capital gains from the sale of those coins.

If there was an active, profitable and sufficiently large market in the collecting and sale of fishing lures, we might well see Congress passing legislation to tax those assets as well under the general government policy that no activity should go untaxed. The fact you keep your fishing lures in a tackle box but your coins in a safe tells us about all we need to know about the relative value of those items.

A more relevant beef about the capital gains tax on coins is that the rate is 28% regardless of how long you own them. Whereas if you hold stocks for more than a certain period of time, you pay a long-term rate of 20% versus the short term rate of 28%. The reason is that the IRS has determined in their wisdom that coin collecting does not "contribute" to the economic growth and well-being of the economy and the Republic unlike houses, stocks, bonds, industrial machinery, & etc.

 

I think we'd see a big reduction in the underground economy that occurs in the general population and also in the realm of coin collecting/dealing. Plus, a reduction in the number of people who could profit from coin collecting and dealing. After all, one of the purposes of the digital currency is to eliminate the ability to escape tax and enforcement tracking.

I recall during the debates over the "Fair Tax" 15 or 20 years ago, one of the purposes of this proposed national sales tax that would replace the income tax was that since even drug dealers have to buy tooth paste and Lamborghinis, they couldn't escape the sales tax like they do the income tax.

 

If someone did invent a policy that would do away with the underground economy, that would be a new thing under the sun. People always find ways to get around regulations.

 

When I put together a group of coins going to auction, I don't just sell coins I know will show a profit. I mix in my mistakes that I know I will loose money on. It's a great way to reduce the gain and dump the problem coins. It's nice to get something out of the junk instead of just holding on to it.

Something cool about Great Collections. At the end of each auction, they send you an excel file showing all the details of the auction. I take that file and show my cost information and my net profit. It's nice to have everything of one page come tax time.