I hate to burst your bubble, but I must. Most, if not all states, require sales tax to be collected on retail sales, including coin dealers, regardless of how the customer pays for the merchandise. Since small business' are regulated in most states, requiring the owner to have a small business license, they also require the business owner to file for a Sales and Use Tax permit, which authorizes the owner of the a business to collect state sales tax on all retail sales. Food would be the only item I know of exempt from sales tax unless the item is subject to excise taxes.
The dirty little secret about why a lot, (not all), people were upset is that collectibles IS an area where people do not report income taxes. Its one of the major areas that the IRS has highlighted where the US loses billions a year in taxes. That was the reason this law was initially passed, to force documentation of sales, and force the seller to either justify why no tax is being paid, or to pay Cap Gains tax. Yes, it would have been terribly burdensome on dealers, and that is a legitimate reason for repeal, but everyone on here has to agree that every single day coins are sold for cash and the profit is never reported to the IRS. I would not dismiss this idea, and think we have won forever. At some point there will be a huge expose on tv on how many millionaires make millions and millions without paying a cent of taxes, or even worst how coins and other collectibles act as a way of laundering drug profits, (which is also true). There have been some stories of drug dealers using gold coins and bullion to launder their profits, and I bet there is more of this than you realize. Its just too perfect, go into a coin store, pay cash for gold bullion, store bullion, sell bullion off later and show that sale receipt as the source of your cash, saying "My grandma left it to me". I am not saying the tax laws are fair regarding cap gains, (I think they are not), but can anyone here honestly state, (short of a dealer), that they claim all of the profits from every coin you ever sell on their income taxes? Chris Recap, law was passed, law was rescinded for now, but I think their is a good chance it will return as part of a "budget compromise, loophole closure".
In cash only Jello. The 10,000 threshold is for cash payments to my knowledge, not wires or checks, (which leave their own trail).
Right or wrong (meaning stupid or not), I fear the IRS so much (and my accountant) that I am one of those small percentage of persons that DOES report any internet purchases where no tax was collected... They could make life very hard if they chose to, and I for one would rather "render unto Caesar.." than be penalized for not doing so. I for one am very glad they repealed this $600.00 thing.. it would have made a lot of 'bookwork' (paperwork, accounting, whatever you want to call it.) I hope they don't change their minds again.
Now this is just out of curiosity that was sparked by something someone said... When it comes to taxes I know you have to report your income, but I've also seen parts of the tax returns where they ask to report any investments, such as stocks and bonds, property investments an the such. Now if you have coins as an investment, are you required to report their worth? I know maybe not me, since I only have maybe $500 worth of coins, but I know some of the roll searchers here that deal in halves have thousands of silver coins, bringing the worth up to $10,000+. Would they be required to report that as an investment or other source of income?
No, if you have held the coin for over a year it still qualifies as a long term capital gain and is taxable at the rate of 28% Any gain, no matter how small, is in theory reportable and taxable. Since the requirement has been repealed the following is all now hypothetical. No it was per year. If you had made ten sales to one dealer you would get one 1099 for the whole $6000. If you had sold them to 10 dealer you would get ten 1099's each for $600. Since it was per year it would have meant that each dealer would have had to keep records all year long for every customer they made purchases from so they could track and send a 1099 to each person he had bought more than $600 from. And since he would have to file these with the government as well he would have to get the SS# from every person he buys something from.
I have never had to report bank account balances, or stock account balances, only transactions made in them, (interest, dividends, sales), and report the income from that. I do not know any reporting requirement for assets in the IRS code per se. You could own a 1804 silver dollar for fifty years, and only with its sale would you report it to the IRS. Chris
hmmm I could have sworn at least bank account balances were required...but ahh what do I know. Plus most of my experience with taxes is in conjunction with filing a FAFSA, so I guess these type of things are more important when it comes to that
I have never been asked for any account balances..only interest statements. Reporting of income required..
