Cashing out your bullion when its time, tax question ?

I'm not coaxing people into evading taxes, or telling them that it is legal. I'm telling you what happens, and how the IRS deals with it, or the limits they work within.

 

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Isn't it good enough that the LAW requires these precious metals sales to be reported for taxation? Or am I just an old fuddy duddy?

 

Sorry, that wasn't directed to you -- I fully agree with what you're saying. More accurately, I don't disagree with it, since I don't have the knowledge or personal experience to confirm it myself.

 

That's just it. It boils down to if you want to follow the law or not. You don't always know what has been reported. If it is reported to the IRS, and you don't report it as income on your tax form(s), you will start the notice, audit, penalty/interest, etc thing as detailed in my other posts on this thread.

As stated earlier, I've given the parameters, and I'm surely not suggesting you break the law . Let your conscience be your guide.

 

I'll confirm it then.

 

I didn't think it was directed at me. I just wanted to make it clear that I wasn't promoting the evading of taxes. I was just trying to educate the unknowing.

 

Confirmed

 

Jeff really ? Do you really think the police are coming to my house ? Do you really believe more than .000001 % of PM buyers report their profit ? Do you really believe when people put the big talk internet BS aside that any of us have really made a profit over the last 5 years where spot has done nothing but collapse ? I made money from 2003 through 2010 and never got arrested. Last few years break even at best. Yes follow the law but don't be so scared of the govt that you turn into a slave to it.

 

Yes its nice to hear a little common sense in this thread. I think some of these guys are on a weekend bender. I found 2 $20 bills wrapped together a few years ago. Never reported it. I hope I don't get arrested.

 

That's one in a 100 million. I doubt much more than 5 to 10 million buy and sell bullion (and that is optimistic). So you are saying no one (rounded) last year reported any profit from PM sales?

 

OBEY!

 

I haven't read the entire thread, however, some years ago, I read income from hobbies (after expenses) is taxed at 20%. I'm sure someone w/ IRS expertise will correct me.

https://www.irs.gov/uac/newsroom/five-basic-tax-tips-about-hobbies

 

Does not seem reasonable. I am sure that hedge fund managers could claim that their hobby is making money.

 

If you maintain that it is a hobby, the income would be reported on line 21, Form 1040 as miscellaneous income, and the expenses on Schedule A, itemized deductions as a misc. deduction, subject to the 2% AGI. If it is shown as an investment, it should be listed on Schedule D, with dates of acquisition and sale, basis and sale price. Again, expenses would be misc deductions, subject to 2%.

 

What is the Federal tax rate for hedge fund managers?

 

Hedge funds are not hobbies, rest assured. The IRS code carefully defines what a hobby is.

 

That is interesting. How exactly do they define a hobby? Anyone have a link?

 

https://www.irs.gov/uac/business-or-hobby-answer-has-implications-for-deductions

 

That link is more in the nature of defining a business. Are we to conclude that if it does not satisfy these criteria then it is considered a hobby and, as such, is not taxable?

 

It's not that the income is non-taxable, It's whether the deductions are non-deductible.

What the IRS is interested in, is a hobby that is using deductions so as not to report personal income, thus reducing his/her tax liability. Thus the extensive rules for defining a business.

https://www.irs.gov/pub/irs-pdf/p535.pdf

More info bottom of page 5, middle column -
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