IRS & Your Coins

How about a little free legal advice?

My 40+ years as an attorney tells me if you have any intention to criminally evade taxes, you shouldn't advertise it!

 

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statequarterguy;
A very close friend of mine is a senior IRS collections officer. I know that money owed the IRS is the most expensive money in town. Shes the one warning me that the interpretation may include transactions. She doesnt give me bad advice, you would be amazed at how close we are. I mean very close.

Steve

 

It is my understanding that the requirement will be limited to business to business transactions and will not include non-business personal transactions... I mean you wouldn't expect that your wife would have to issue at 1099 to Costco when she spends $600+ on junk there, right?? Or when I blow $600+ at Home Depot??

Of course, as it relates to the coin business, the line gets fuzzy as to what is business and non-business transactions... When someone sells a coin to a dealer at a show for $1000 or so, that person could just say that they are not a dealer and that this is their hobby, but given the number of sales made in the year, the IRS may disagree...

if one is buying enough coins (and then ends up selling enough of them in a year) that person may be looked at as being in the business and would then have to give up their SSN (tax id #) to all dealers who they sell more than $600 so that they could get 1099s and then would also have issue their own 1099s to those dealers they buy more than $600 from during the year.

Could get very complicated and though I consider myself a collector and not being in the business of coins it is possible that others would have a different opinion. I'm sure many collectors would have an issue giving their SSN to a dealer if requested during a sale of their coins to the dealer which exceeds $600. That alone would probably cause many deals with such dealers to be cancelled. We'll see in 2012 how this really impacts the coin hobby/business.

 

This is why I always make sure I sell at a loss. (BTW, I'm joking. I don't sell coins at all)
Guy~

 

Well then, she should be advising you to report all your income. The IRS is even tougher on employees that advice others how to cheat than they are on the cheaters. Hope you're not so close that your filing status is MFJ, then she would get penalized for your underreporting.

 

Guy,
That sounds like the ticket. And kinda the way I was thinking of approaching things. My coin dealer where Ive purchased maybe 15% of coins has some idea. But Ive spent over twenty years going to shows flea markets, farmers markets, yard sales, cherry picken bust halves & morgans. The only person right now that knows what I have is me. The forum administrator says I dont have to worry about TPG services. Im still concerned that if I send my collections into the TPG it will create a record and assign a very ballpark value on the coins. And could hurt me come sell time. I begining to think I should just leave em raw. What do you think?

Steve

 

statequarterguy;
Thats my point. I am no where near sell time yet, and your right IRS employees are held to a much higher standard then the rest of us. I can assure you I get nothing but the best Legal opinions when it comes to taxes and how to best hold on to my money. Preparing for my future is all Im actively doing now.

Thanks,

Steve

 

Wouldn't help. The TPG records are just one way the IRS could prove you had income. They have numerous ways, including your life style - try benefiting from coin sales and not have that show up in your life style. That's how they got Al Capone.

 

statequarterguy;
Yes your right, hence my apprehension as to what to do. As I mentioned If anything, I get almost TOO MUCH legal advice. Im looking for shelter my friend.

Thanks for posting,

Steve

 

"I wish there would be some legislation to allow me to cash in my investment coins in as a sort of Roth IRA. I paid for all of my collection with taxed income already, and after inflation I'll most likely lose money on most of it anyway. I know there would be a great deal of paperwork involved, and probably not make it worth peruing. I think I'll just pass it on to my kids and let them decide how to report any financial gains."
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Every coin\currency show I attend I see dealers make very large cash transactions w/o any paperwork. I'm not advocating ducking taxes I'm only reporting on what I've seen at every show I attend.

It's only a matter of time before the IRS starts using TPG records to enforce IRS laws.

​

 

It sounds like the IRS can only take their cut if you realize a profit...just don't sell. :thumb:

 

Then look for legal shelters - like investments in your coin business that would provide current write offs that offset your coin related income and at the same time provide future income. Someone once said, "I love paying more taxes because it means I made more money".

 

Folks should defer to advice provided by a tax professional.

 

I don't understand how the TGP records could show income? All they really show is you have or once had a coin that graded at some level. They have no record of what you paid for the coin, and how much it eventually sold for, that is what is needed to prove income, right?.
Also, do you think the fee of the TGP could be subtracted from the potential profit on the sale of the coin for tax purposes?

 

statequarterguy,

Thats a beautiful sentence, I am not doing anything right now that could be construed to be business. If I have doubles or triples I will sell to a friend, at not even much of a mark up. Depends on the friend. I think I could become, or claim to be, a full time gambler, they can write off all their loses. LOL

Steve

 

It seems a shame we should have to hire someone to pay our taxes; that people pay different tax based on the skill and ethics of their tax preparer.

edited

 

The TPG records would show you once owned the coin. If during an audit, the IRS inspected your inventory and those coins were no longer in your inventory, they would look for a sale and profit or loss on the transaction.

Yes, the fee for certifying the coin would add to the basis of the coin, thus reducing the profit or increase the loss from a sale. But, like has been advised here, you should get the help of a tax professional if you can't figure it out yourself from the published literature - I've been retired five years and things change.

 

LOL. Want to almost guarantee an audit, then claim you're a full time gambler with losses. A full time gambler with losses would have to show how they paid for those losses and managed to pay living costs. Bottom line is, if you're paying your own way, you have to have sources of funds. For most of us, those sources of funds are taxable income.

 

Can't comment on doing away with tax code, etc...

I do know, however, that ethics doesn't necessarily have to do with it in my case... as all guidance provided by my tax professional is legit and pursuant to tax law. As with other things in life, I can't keep abreast of all of the constantly changing tax codes... that's why I have one. I think of it the same way as using a regular a car mechanic in that they provide a service for something they're more expert at than me... same with a plumber, or geeks on call.

 

I am not selling my coins but giving my entire collection to my son some day. TC