If I accept paypal when selling coins, do I have to report them on my Taxes? just wondering if I have to...that way I can keep an accurate amount. Also, is there a limit on how much you can make before you have to report your sales? I heard $600, but not sure stainless
First off, I would be more concerned with your State's sales tax laws if you happen to sell to anybody in your State. As far as income tax, that would depend on if you are running this as a business or an individual. As a business, you would report it on your Profit and Loss, otherwise you would report it under your capital gains.
I believe there is no tax for Numismatic material...and it would be an individual..no bussiness quite yet..lol...working on it though. Do you know about the max your allowed to make before you have to pay tax? thanks for the help. stainless
State sales tax varies state to state. California and Oklahoma both charge sales tax. Although OK you can check a box saying you have sold on the internet and just pay a small fee if you are too lazy to calculate the actual amounts. As for income tax, it absolutely is taxable and there is no minimum numismatic sales amount that is taxable although there is a minimum total amount you have to make before you have to file. It is also all falls under ordinary income (unless you are a business) and not as capital gains. If you search for it , you will find more than one thread on the topic posted by people a lot more knowledgeable than I. Although I have seen the "not capital gains" part specified in the tax code
If you make a profit selling something then it is a capital gain. Personal property, art, merchandise, coins, whatever.
One good thing about Wyoming is coin and precious metals are not taxable. However, if it is sold in a holder, and that holder is calculated in the cost of the coin, it is taxable (at least the sale of the holder). Perusing Michigan's tax code, it appears that individuals who sell coins and precious metals get partial exemption of 2% of the sales tax, which would leave a 4% sales tax liability, I believe. The good part is that Michigan apparently has no use tax on coin and bullion. I'm sorry, but please refer to IRS publication 544, as coin and bullion are capital assets, and thus generally subject to capital gain.
Wrong! In some states numismatic material is subject to sales tax, in others it isn't, and in still others it depends on the dollar amount of the sale. Income tax, however, is assessed by the feds and some states on ALL monetary gains. As someone already pointed out it may be ordinary business income, or a capital gain, depending on whether or not you are in the business. Once you cross the $600 threshold for total reportable income in a single year, it all has to be reported to Uncle Sam. That threshold may vary in states (and cities) which collect income taxes.
Now try this one http://www.irs.gov/newsroom/article/0,,id=172833,00.html. If you INVEST in coins, they are capital gains. If you have a HOBBY, it is ordinary income. And, you might want to read this thread; http://www.cointalk.com/forum/t33954-2/
I hate researching on outdated material. Michigan placed exemption on sales tax for investment coins and bullion a few years ago:
Right, and it matters not whether you sold using Paypal or not. Regardless of how you were paid, you still have to report your capital gains if you meet the minimum income threshold for filing a tax return.
I know if you trade coins, you won't owe any taxes on that transaction and if you accept numismatic items for payment for a high ticket item, such as a car, even if the buyer pays you in silver eagles, since they are, for customs reasons, considered to be legal tender coins, you'll only owe taxes on the face value of those silver eagles if the buyer of your car (or other big ticket item) pays you in silver eagles or any other numismatic items that are considered legal tender, whether it's only for customs purposes, or if it was actually used in commerce at one point, the same principles apply. I know on a federal level, there are absolutely no taxes whatsoever on the sale of any legal tender numismatic item, but on the state level, there might be taxes once the sale of a legal tender numismatic item once the sales reach a certain level, but you'll want to check with your local and state tax laws regarding this issue, but it makes sense that there wouldn't be any taxes on the sale of any legal tender item for any reason if your an individual. Now if you sell privately issued silver bars or rounds, than that might be taxed in some states, or even by the federal government once the sales of those items reach a certain point, but that would be another issue to look into
No sales tax on coins and bullion in Michigan. I have had to inform some resale shops of this. Also, keep track of your mileage and expenses, more than likely your expenses will outweigh your sales income at first. I would just do my taxes normally and claim any profits as unearned income. (Not a tax atty. though, so you should consult one). Good luck!
I think you need to read the federal income tax code and pray that you are not reported. Regardless of whether it is capital gains or income tax, there absolutely are taxes due for the sale of coins and I guarantee you that both owe taxes for trading coins and that the face value of an ASE has nothing to do with what you pay taxes on. To quote the IRS; FYI, "exchange" = trade
I guess whoever told me that, or at least left me with that impression, probably meant that there's no income tax on those sales, but forgot to mention (or maybe my selective listening tune out of the fact), that there's still capital gains tax when you go to sell the coins, even if you accept them as payment for something else, the only difference is that if you sell a car or some other big ticket item and accept silver eagles as payment, you'll have to figure out how much you bought the silver eagles for based on the original asking price for the car, and than when you sell the silver eagles, you'll owe capital gains tax, which is less than ordinary income tax, so that could still be a 20% tax savings over accepting us dollars for the car (which would be taxed at the rate of ordinary income, which is more than capital gains tax). I don't know why I was thinking it would be quite the way I put it, maybe it's just been a long day, or maybe I'm just tired, or maybe I just got bad information and just wasn't thinking too hard about it because it was late at night when I received that information, which is usually when it's hardest for me to think through if I don't already have my mind made up about certain issues. In other words, it can be easy to take certain pieces of information and twist it into something that's sounds good to the ear (especially if you hate paying taxes), but just isn't realistic, especially late at night when the mind starts to shut down.
You must be in the 35% tax bracket then. Capital gains rate on coins is 28% (Unless your personal rate is less than that in which case it is taxed at your personal rate.) So for it to be a 20% tax savings your personal rate has to be 35%
