Accounting for Inflation

By traveling to the future you already changed the future timeline from what it would have been had you just lived your life normally until that point. It is impossible to time travel and not have impacts on what the time line would have been in any direction

 

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Ngc collector's society allows you to add all the coins infor to include purchase price and such

 

You're nuts! I could care less about any coin. I'm talking about winning hundreds of millions of dollars that I know nobody else will win weeks and weeks from now.

Yeah, I could have a heart attack just thinking about how I would spend the money. On the other hand, I could also decide that I should take better care of myself, physically. So I start a regular routine of exercise to include running every day, and one morning as I'm stepping off the curb to run across the street, a Loomis armored truck runs the stop sign and kills me. So much for the exercise plan! ~ Chris

 

Define "future"! Define "normal"! Right now, tell me what specific thing you will be doing tomorrow at exactly five minutes and thirty-seven seconds past 4:00pm. You can't! So what "future" are you changing? Maybe Nostradamus can help you!

 

So.... time travel aside.....

Inflation?

Seems to be something most people don't really think about.

 

You're getting in a philosophical reason where you can easily deduct that you jumping time into the future will have a different future than if you had just gone there naturally. Your simple existence there at your current age is already a change from the natural progression of what would have been without time travel. It is impossible to time travel and not change the line whether it be to the future or the past

 

If I find a 1969-S DDO-001 in a roll of cents from my bank and I have it certified, graded, and sold at auction... why do I have to pay personal income tax on the profit, not capital gains?

 

I would think the profit and gains would be essentially equal in this particular case

 

It goes back to the two main points already made in this thread:
1. You can't use it for your taxes
2. Many view it as a hobby and some don't even keep track of costs

And then you also have the argument that inflation isn't accurately calculated (or at least one can debate the proper calculation).

 

Does this importance change if your collection is worth:

1. $10,000?
2. $100,000?
3. $1,000,000?

I'm quite sure that some of us fall into each category.

 

What does that have to do with the price of eggs? ~ Chris

 

Thanks for putting up with me, Jason!

 

One last thing, Jason.............Horsehockey!!!!!!

 

Isn't capital gains computed over a longer period of time as opposed to annual income tax? ~ Chris

 

I'd say for most the answer is no.
No matter how expensive your collection, you can't use inflation to your benefit on taxes.

One instance where inflation can play a role is before the purchase-and that is if you are viewing it as an investment. You might be looking at several options (say stocks, real estate, and coins) and then you can try to predict what inflation will do to your returns. You can also calculate it after the purchase to compare the inflation adjusted numbers of several investments and see if you want to readjust your holdings.

 

No. Are you going to sell your million dollar house because it may not keep up with inflation? How about the car? Nice clothes?

If inflation is a major concern if anything it means the person may have over extended their comfort level for their collection

 

There's two different rates for short and long term ones. Short is essentially taxed as normal income.

 

Inflation is most certainly calculated properly. There is no argument there. Inflation itself, however, is a measurement and that is where the problem lies. You have to have the proper measurement. The current measurement utilized by the BLS in their CPI Inflation is inadequate because we do not have one singular economy in the United States (or the world for that matter), but more than fifty separate ones.

The BLS CPI takes into consideration literally tens of thousands of prices each month over the spectrum of every economy in this country. This wide spread of products and services is supposed to give a solid picture of the change in the cost of living.

However, this assumes that all economies are equal...which they are not, or there would only be one. My cost of living is far different from someone in New York or California (or just about anywhere in the U.S.) The economy in my State is such that the cost of living for a family of seven (including mortgage) is under $2,000 monthly. And this really has not changed much over the past decade.

An assumption made in the BLS CPI Inflation model is that all products and services are equal both in use as well as in utility. But, the dollar I make today pays the exact same toward my mortgage as the dollar I made twelve years ago when I bought my house. My car insurance has not gone up these past six years. So, the dollar I make today pays the same toward my insurance as the dollar I made six years ago. I am paying less for gas today than I did back in 2010.

All inflation measurements are simply that...measurements. The calculation of those measurements only affects you when (and only when) they are tailored to your exact situation. Otherwise, inflation is a moot point.

Now, I have considered the affects of inflation in market analysis. Because the market covers all different economies and situations within those economies that it will give a good indication of future possibilities and helps to determine risks. But, that is a different discussion.

 

@NPCoin that was much better said. I was referencing what you said but my initial comment was a poor way of phrasing it.

 

Excellent analysis.

I think the idea of the CPI is that is averages the entire national index, although we all recognized that certain areas have vastly different costs of living. I think, on average, the increase per year is roughly equal across the country, even if one region costs more than another. For example, San Francisco has a much higher cost basis than Charleston, but the percentage increase per year (due to inflation) is going to be the same nationwide because the Federal Reserve and currency policy is a nationwide policy.