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Federal Taxes Paid On Coin And Stamp Sales
You should always set up your coin endeavors as "investments" rather than
has a hobby, or else the IRS will try and tax any profit you make while refusing to let you take any losses. -- Helen Wallace R.E. Wallace Stamps & Coins Fort Worth, Texas "Since 1948" |
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#12
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Federal Taxes Paid On Coin And Stamp Sales
On Feb 18, 11:50*pm, "Robert Dibbell"
wrote: You make a good point. *Unless you are in the business of buying and selling coins, you can treat each purchase and sale the same as you do stocks and bonds. *Record keeping in both cases is about the same except that the date acquired is important if you go the Capital Gains route in order to prove short or long term gains/losses. The advantage to buying and selling coins as a business is additional deductions from legitimate business expenses. *Losses are not limited to $3,000 as in capital losses (anything over $3,000 has to carry over to future years). *But, as you pointed out, there are no self-employment taxes on capital gains income. *And capital gains are taxed at a lower rate than ordinary income. Tax law can be very complicated and we're being very simple here. *Thanks for pointing out an alternative. *I will keep that in mind if I end up with any tax clients who buy and sell coins. Bob "clarkent" wrote in message .. . You can also treat each sale as a Capital Gain or Loss. You must establish a cost basis , which includes any fees to acquire or dispose of the asset. This has advantages to filling a schedule C , business form. You then have to pay 15% self employment tax on any profit over $400. No self employment tax on capital gains, but it is a hassel to keep records of each individual coin bought and sold, if you do enough volume. Actually, Bob, the IRS taxes gains for coins and other collectible at the ordinary income rate, not the lower capital gains rate. More reason to let your coin assets remain in your estate. This way your heirs get the stepped up value free of ordinary income tax rates. Depending upon your tax bracket and the total value of your estate, estate txes may or may not be due. Ira |
#13
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Federal Taxes Paid On Coin And Stamp Sales
Correct Helen. Hobby income is taxable. No such thing as losses from a
hobby. It's a business or an investment. Good record keeping is a must. With the IRS, good recordkeeping is a must anyway... Bob "Helen Wallace" wrote in message ... You should always set up your coin endeavors as "investments" rather than has a hobby, or else the IRS will try and tax any profit you make while refusing to let you take any losses. -- Helen Wallace R.E. Wallace Stamps & Coins Fort Worth, Texas "Since 1948" |
#14
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Federal Taxes Paid On Coin And Stamp Sales
I would agree that for almost everyone, the business of buying and selling
coins is taxed as ordinary income. It is the wise businessman who sets up his business in such a way as to minimize the tax bite. Paying taxes is inevitable but no one says we should pay as MUCH tax as possible. We always want to pay the least. Why pay retail when there are ways to pay wholesale... People who dabble in the high priced coins, though, could make a case for capital gains income as opposed to ordinary income. But then they have a high priced CPA working for them rather than a little guy like me. Some day, though, www.bobstaxsvc.com will be among the big guys... (I know--cheap shot at showing off my new website) Bob "Ira" wrote in message ... Actually, Bob, the IRS taxes gains for coins and other collectible at the ordinary income rate, not the lower capital gains rate. More reason to let your coin assets remain in your estate. This way your heirs get the stepped up value free of ordinary income tax rates. Depending upon your tax bracket and the total value of your estate, estate txes may or may not be due. Ira |
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