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<p>[QUOTE=&quot;Hobo, post: 337206, member: 11521&quot;]Again, I am not an accountant, a CPA or a tax expert. What follows is my opinion only.</p><p>&nbsp;</p><p>You owe person income tax on your income. Among other things, your income is the profit you made buying and selling coins. In my world PROFIT = INCOME - EXPENSES.</p><p>&nbsp;</p><p>If during the tax year you bought one coin and sold it at a profit your reportable income for the coin is the coin&#039;s selling price minus the coin&#039;s purchase price. If you also paid to have the coin graded by a TPG your cost associated with the grading (grading fee, shipping, etc.) would be deducted from the gain on the coin.</p><p>&nbsp;</p><p>Let&#039;s say the following year you were a bit more active:</p><p>&nbsp;</p><p>Coin A bought for $500 and sold for $900 </p><p>Coin B bought for $600 and sold for $800 </p><p>Coin C bought for $750 and sold for $1,100 </p><p>Coin D bought for $800 and still &quot;in inventory&quot; when the tax year ended</p><p>&nbsp;</p><p>Your total sales for the year were $2,800 and your total purchases were $2,650. </p><p>&nbsp;</p><p>Let&#039;s also say you spent $150 on slabbing fees and associated costs. </p><p>&nbsp;</p><p>In my book you should report the following to the IRS on your personal income tax return: $0</p><p>&nbsp;</p><p>$2,800 sales - $2,650 purchases - $150 slabbing fees = $0 net profit</p><p>&nbsp;</p><p>When you sell the coin &quot;in inventory&quot; its sales price would be added to your sales for that year.</p><p>&nbsp;</p><p>If you ended the year with a profit I believe you should be able to deduct other hobby-related expenses - things needed for the pursuit of your hobby and for coin buying and selling. Hobby expenses might include ANA membership dues, Coin World subscription, Grey Sheet subscription, loupes and microscopes, a Red Book and numismatic books needed for education and research. </p><p>&nbsp;</p><p>To make an analogy, from a tax liability perspective, selling a coin should be like selling a house. If you sell a house and buy another house of equal or higher price within a certain time frame you do not owe income tax on the gain. You only owe income tax when you &quot;cash out&quot; and do not use the proceeds from your sale to buy another house. </p><p>&nbsp;</p><p>Likewise, it would seem to me that if you take the profits from the sale of coins and use them to reinvest in buying more coins you would not owe taxes on those profits. As long as you keep reinvesting your profits in more inventory you shouldn&#039;t own taxes until you &quot;cash out&quot;.</p><p>&nbsp;</p><p>Again, this is only my opinion. For the record I very, very seldom sell a coin so I do not engage in the above.[/QUOTE]</p><p><br /></p>

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