That's because you sell on eBay and eBay has a threshold of 20,000 dollars before you have to pay tax on that income, and eBay collects the sales tax on your behalf.
Yes, and the CEO is an employee of that business...and gets paid a salary that both he and the business pay taxes on.
The police are not standing over your shoulder looking for you to commit murder either, yet doing so is against the law. And, no matter how savvy you think you are, sooner or later you will get caught. The bottom line. You cannot legally use business fund's to purchase a coin for your personal collection. FYI, Detecto, I own a business. I won't pretend to be an expert at everything, but, I can say with absolute certainty that what you are talking about is not legal.
Yes, but with a sole proprietorship, you pay yourself out of your business account, it is called a "draw". How else would you make money? Otherwise it would be a never ending loop of expenses and incomes that you would never be able to touch.
Yes, though at some point you would have to pay yourself a salary. And, when you have a business as a SP, LLC, Partnership, ect... you would have to have your business taxes done and would personally file a K-1 to show the personal portion's on your personal taxes.
I am not sure draw is accurate either. I think it is actually considered a distribution. I know mine are, though I draw both a salary and a distribution. In either case, if the combination of these payments exceeds the profit the company took in that year I have issues. You can get away with it at first, but quickly you will have your accountant screaming about income vs basis.
What if you bought it as a business, and had it in your shop 5 years, and no one ever bought it? Splitting hairs further, what if you bought the coin as a business, but ask such a high price, that no one ever buys it? See what I mean? If you buy a coin as a business, then it goes in your inventory, and inventory is an asset as such listed on your balance sheet. At the same time, YOU own the coin, so it technically is both in your collection, and in your inventory. Also, if you buy something as a business, and decide later not to sell it, then what do you do? Take for example people who buy cars, restore them, and later resell them. If someone buys a car and restores it..I don't think there is anything in tax law that stipulates they HAVE to sell it. Even if they had to, they could drive it around with a for sale sign on it for only 10 million dollars. That's the thing, there are no specifics to it. Of course, if you have a business of making wooden furniture, you can't buy a hot tub and write it off as a business expenses. But if your in the business of making wooden furniture, and buy lumber as a business, build a piece of furniture, but decide later to keep it, then what happens? Take the TV show "American Pickers", they are in the business of buying and selling antiques. But go into their house, and you would probably find a ton of antiques they purchased, and then kept for themselves. Since they are in the business of such, it's not like their is some form they fill out and then go "OK, we are buying this for ourselves, and not to resell" I would need a huge building, a paper punch machine, a mylar laminating maching, a plastic die mold injection machine.. I would need millions to do that.
Even as a sole proprietorship...you still pay yourself a wage out of the business account and you are still responsible for all taxes...both the employer and employee taxes.
no, you buy used equipment for a fraction of the cost. you find a town that has had lots of manufactoring leave their city, then you work a deal out with the mayor for a heavily discounted building and tax breaks, because you would be bringing in tax revenue and creating jobs in the community.
There isn't a law that says that. But, there is a law that says if you buy something for yourself...you must pay taxes on the money you used to purchase that item. Even people who restore cars. Think of it like this...lets say you won a brand new car in a raffle. Let's say it's a 2014 Camaro (why not). That 2014 Camaro 2SS black with white stripes (again, why not) has an MSRP of about $37,000. That car is considered income under tax law and you must pay taxes on that income. The same thing is true for a coin you buy with your business account for yourself. That is income. You have to pay taxes on it or you are breaking the law...there is no way around it. No matter how much you try and argue the point, you are wrong.
I can say the same thing, I don't know everything but I know enough. I too own a business, and it's not a sole proprietorship so some of the laws are different. But, no matter what kind of business it is...this is not legal.
There are no separate employee or employer taxes with a SP, it's self employment (SE) tax. I do not employ anyone, nor do I have an So what your saying is if I bought a coin for myself, since I'm giving myself money, I have to pay tax on it? BTW, what the heck is a 2SS? I remember when there was just RS, Z28 and Iroc-Z
Not going to break out all of the quotes. I have answered in bold. What if you bought it as a business, and had it in your shop 5 years, and no one ever bought it? Then it would still be an asset of the business. Splitting hairs further, what if you bought the coin as a business, but ask such a high price, that no one ever buys it? See above See what I mean? If you buy a coin as a business, then it goes in your inventory, and inventory is an asset as such listed on your balance sheet. At the same time, YOU own the coin, so it technically is both in your collection, and in your inventory. No, the business owns the coin and you own the business. It seems like that gives you ownership of the coin, but in the eyes of the IRS, it does not. But, if you dissolve the business you would have to sell the assets and/or pay taxes on them (or the profits from the sale). In that case, presumably you would end up owning the coin, but paying taxes at least. Also, if you buy something as a business, and decide later not to sell it, then what do you do? You hold it in the business's inventory as an asset. Though it can be 'written off' via depreciation in some cases, this wouldn't qualify for such. Take for example people who buy cars, restore them, and later resell them. If someone buys a car and restores it..I don't think there is anything in tax law that stipulates they HAVE to sell it. No, there isn't. But again, they do not own it, the business does. Even if they had to, they could drive it around with a for sale sign on it for only 10 million dollars. Sure, I guess they could. However, if the were deemed to be using it for personal use by IRS they would be liable for the costs associated with such as 'income' on their taxes. That's the thing, there are no specifics to it. Of course, if you have a business of making wooden furniture, you can't buy a hot tub and write it off as a business expenses. But if your in the business of making wooden furniture, and buy lumber as a business, build a piece of furniture, but decide later to keep it, then what happens? Like above, it is a asset of the business. Take the TV show "American Pickers", they are in the business of buying and selling antiques. But go into their house, and you would probably find a ton of antiques they purchased, and then kept for themselves. I would be willing to bet that is the case for many people. Though, the legal way to do it is to sell it to yourself, at or near cost/value. However, I am sure many people break the law and if they are caught they will pay the price. Since they are in the business of such, it's not like their is some form they fill out and then go "OK, we are buying this for ourselves, and not to resell" Sure there is. It's their personal check.
Last response for the night. The only way I see for you to buy a coin under the business and then transfer to yourself would be if you bought a coin for 1k, paid yourself 1k and then bought the coin from your business for 1k. In essence, the coin would be 'free' though you would be responsible for taxes on the 'income' you had which would include the 1k you paid yourself to fund the purchase of said coin.
I'm still pretty sure you are required to pay both sides of the taxes. You have to pay your personal income taxes and you have to pay the employer side. I could be wrong, I have never had an SP...but I'm pretty sure you do. You are the employee I'm referring to. That depends on where the money came from. Did the money come from your personal paycheck (if so...you already paid taxes on it). If that's the case, you do not have to pay anything. If the money came from the business (pre-tax), that needs to be counted as income and taxed accordingly. As for the Camaro...2SS is the SS with the nicer interior package on the new Camaros.
See Tim, this is what you don't seem to get. Just because it's an SP...doesn't mean that you own it. You must separate your personal property and the businesses property. Just because you own the business...that doesn't mean all the businesses assets belong to you. They belong to the business. You must keep your personal assets and the business assets completely separate at all times.
