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<p>[QUOTE=&quot;Publius2, post: 25287826, member: 105571&quot;]Back to your original question.&nbsp; Let&#039;s say you travel to a two-day coin show and have a total of $1000 expenses and at that coin show you engage in the following activities out of a total possible 16 hours (8 hours per day) of possible activities:</p><p><br /></p><p>1)&nbsp; Giving coin presentations - 2 hours</p><p>2)&nbsp; Attending coin presentations - 2 hours</p><p>3)&nbsp; Attending club meetings - 2 hours</p><p>4)&nbsp; Socializing - 2 hours</p><p>5)&nbsp; Selling coins on the bourse - 2 hours</p><p>6)&nbsp; Shopping and buying on the bourse - 6 hours</p><p><br /></p><p>Of those activities, only Number 6 has a direct and indisputable nexus to the cost of acquiring any coins you buy.&nbsp; I think you could probably pass a tax audit on capital gains basis with #6 (See note below).&nbsp; Activities 1 through 5 either have no direct nexus to the cost of acquiring coins or only a nebulous connection.&nbsp; It would be very easy to make the case that you would have spent money on these activities even if you never bought a coin, therefore they aren&#039;t costs associated with the acquisition.</p><p><br /></p><p>Note:&nbsp; Since your hours spent purchasing coins is less than a majority of the time you spent at the show, IRS could argue that you would have gone to the show anyway even if you didn&#039;t intend to buy any coins.&nbsp; This kind of argument has been applied by them successfully before in other areas - think home office tax deductions.</p><p>&nbsp;</p><p>In this hypothetical example with only Activity Number 6 counted toward costs, the portion of the $1000 of expenses to attend the show would be:</p><p><br /></p><p>6 hours divided by 16 hours = 0.375 = The portion of expenses directly attributable to acquisition of the coins.</p><p><br /></p><p>The amount that could be applied to the acquisition of coins = 0.375 times $1000 = $375.</p><p><br /></p><p>The acceptable/approved/preferred methodology of applying a portion of that $375 to each coin you purchased is certainly open to debate in the absence of an IRS-mandated method.</p><p><br /></p><p>But from this example, you can see how if you&#039;re going to use trip costs as part of your basis, you should at least have a methodology that your records can support and that at least has some rationale that doesn&#039;t quite literally stink of tax evasion.</p><p><br /></p><p>Of course this whole basis discussion is irrelevant if the coins are inherited because the basis then becomes the post-mortem appraisal performed by the heirs.</p><p><br /></p><p>Disclaimer:&nbsp; I&#039;m not a tax lawyer, a tax accountant, an IRS employee or any kind of person who professes to any expertise on these tax matters.&nbsp; You should consult credible tax experts.[/QUOTE]</p><p><br /></p>

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