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When Are Auction Profits Reportable?

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 Posted 09/05/2021  10:12 pm Show Profile   Bookmark this topic Add howell1018 to your friends list Get a Link to this Message
Let's say I auction my coin (or whatever) collection on November 15th this year. The auction company cuts me a check for my share and it's dated Dec 1st. I receive the check on December 10th, and deposit it on Jan 5th 2022. Are the capital gains reportable for 2021, or 2022?
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 Posted 09/05/2021  10:31 pm  Show Profile   Bookmark this reply Add Coinfrog to your friends list Get a Link to this Reply
Hypothetically, of course, why would you report the gain in the first place?
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 Posted 09/05/2021  10:42 pm  Show Profile   Check GrapeCollects's eBay Listings Bookmark this reply Add GrapeCollects to your friends list Get a Link to this Reply
If you were to happen to accidently loose some coins in the mail, and then get a Christmas check from a friend why would you report a gift?
My best finds: 1999-WAM:http://goccf.com/t/332161 1988-RDV-6:http://goccf.com/t/335954#2873459 1986-Off-center: http://goccf.com/t/335952
1999 WAM #2:http://goccf.com/t/338710&whichpage=1
1981 Double Struck In Collar: http://goccf.com/t/350199&whichpage=1
ANA id: 3194067
My Type Set: https://www.NGCcoin.com/registry/co...sets/236574/
If you want to buy something or sell something or just talk, shoot me a PM!
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 Posted 09/05/2021  10:46 pm  Show Profile   Bookmark this reply Add Coinfrog to your friends list Get a Link to this Reply
In the words of our beloved President - "C'mon, man!"
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 Posted 09/05/2021  10:51 pm  Show Profile   Bookmark this reply Add macmercury to your friends list Get a Link to this Reply
I would report as a lost instead of a gain after the auction house took a piece of the profit.

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 Posted 09/05/2021  10:57 pm  Show Profile   Bookmark this reply Add hfjacinto to your friends list Get a Link to this Reply
Why would you report gains? You mean you didn't pay more for the coins that what you got?
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 Posted 09/05/2021  11:33 pm  Show Profile   Check Pacificoin's eBay Listings Bookmark this reply Add Pacificoin to your friends list Get a Link to this Reply
Since proper accounting is done according to the accrual
method , any gain / loss is reported in the year accrued
In this case 2021.
If the amount involved is substantial , consult an accountant
or tax attorney familiar with the subject matter.
Our coin business has utilized the same accountant since 1986.
He is well based in the numismatic and collectible field and has
kept us out any issues save a minor sales tax audit about 25 years ago .
The key is to seek PROPER advice from a certified professional .
Few on here will be able to properly guide you .
Edited by Pacificoin
09/05/2021 11:34 pm
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 Posted 09/05/2021  11:46 pm  Show Profile   Bookmark this reply Add sel_69l to your friends list Get a Link to this Reply
How about buying coins for cash in the first place?
One of the reasons why I like to inspect every coin in hand, before deciding to buy.
At public auction, or at coin shows or face to face with a dealer, I also pay for my coins in cash.

You will have no idea of how much tax the seller had to pay on his sale, and nor will you care, and
you will have no idea of the capital gains tax that should to be paid, if you re sell, decades later.

Most of the 2,500 coins in my collection would have been bought in the $5 to $10 each range for cash (before digital money), up to 50 years ago. How on Earth do you work out the capital gains tax on each of these?

Tax wise, the whole lot just becomes a dog's breakfast, and a bureaucratic tax nightmare, if you buy or sell in any other way, unless you paid in cash.

Major auction businesses and dealers have to report tax liable for payment on their business operations.
Therefore, the coin collector ends up indirectly paying taxes on his collection anyway.
Edited by sel_69l
09/06/2021 12:48 am
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 Posted 09/06/2021  12:16 am  Show Profile   Bookmark this reply Add jbuck to your friends list Get a Link to this Reply

Quote:
Hypothetically, of course, why would you report the gain in the first place?
Because there are laws.

But seriously...

Quote:
The key is to seek PROPER advice from a certified professional .
This. This is what you should do.
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 Posted 09/06/2021  12:35 am  Show Profile   Check GrapeCollects's eBay Listings Bookmark this reply Add GrapeCollects to your friends list Get a Link to this Reply

Quote:
Because there are laws.


Lameeeeeeeeeeeeeeeee
My best finds: 1999-WAM:http://goccf.com/t/332161 1988-RDV-6:http://goccf.com/t/335954#2873459 1986-Off-center: http://goccf.com/t/335952
1999 WAM #2:http://goccf.com/t/338710&whichpage=1
1981 Double Struck In Collar: http://goccf.com/t/350199&whichpage=1
ANA id: 3194067
My Type Set: https://www.NGCcoin.com/registry/co...sets/236574/
If you want to buy something or sell something or just talk, shoot me a PM!
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5132 Posts
 Posted 09/06/2021  08:14 am  Show Profile   Bookmark this reply Add tdziemia to your friends list Get a Link to this Reply
2021.

If there is a record of the transaction submitted for tax purposes it will bear the date the check was cut.
Nothing ambiguous about this situation.
If an investment account sends you a dividend check dated December 1, it will show up on a 1099 as a December transaction regardless of when you deposit the check.

You then need to determine how much of that is a gain, and you should have documentation to prove it in the event you are audited, which is a very low probability. As pointed out by @hfj, maybe some of the coins sold at a loss, if they were fairly recent purchases.

I also agree with the statement about consulting with a tax professional BEFORE you make such a decision to sell. Once you sell, it's too late to plan how to minimize your taxes.


Quote:
Hypothetically, of course, why would you report the gain in the first place?

To avoid the penalties and interest you will be charged by the IRS if the sale is reported to them by the auction house, and you have neglected to report them
Edited by tdziemia
09/06/2021 08:35 am
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 Posted 09/06/2021  09:26 am  Show Profile   Bookmark this reply Add Oldfordman to your friends list Get a Link to this Reply
The my advice is hide the gains in the coffe pot.
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 Posted 09/06/2021  09:37 am  Show Profile   Bookmark this reply Add just carl to your friends list Get a Link to this Reply
What gains? Didn't you actually loose a lot of money on this?
just carl
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 Posted 09/06/2021  10:36 am  Show Profile   Check nss-52's eBay Listings Bookmark this reply Add nss-52 to your friends list Get a Link to this Reply

Quote:
The auction company cuts me a check for my share and it's dated Dec 1st. I receive the check on December 10th, and deposit it on Jan 5th 2022. Are the capital gains reportable for 2021, or 2022?
Under both the cash method or accrual method of accounting any gain would be reported in 2021. The year you deposit the check is irrelevant.
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 Posted 09/07/2021  12:16 pm  Show Profile   Bookmark this reply Add jbuck to your friends list Get a Link to this Reply

Quote:
Lameeeeeeeeeeeeeeeee
Seriously?

I will send you a cake in jail. No file.

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 Posted 09/07/2021  6:21 pm  Show Profile   Check GrapeCollects's eBay Listings Bookmark this reply Add GrapeCollects to your friends list Get a Link to this Reply

Quote:
Seriously? I will send you a cake in jail. No file.


I would never advocate someone ignoring a law. Never, totally. But if hypothetically I were to make a joke about it Mr. IRS man it'd only be that. I just said that it was lame
My best finds: 1999-WAM:http://goccf.com/t/332161 1988-RDV-6:http://goccf.com/t/335954#2873459 1986-Off-center: http://goccf.com/t/335952
1999 WAM #2:http://goccf.com/t/338710&whichpage=1
1981 Double Struck In Collar: http://goccf.com/t/350199&whichpage=1
ANA id: 3194067
My Type Set: https://www.NGCcoin.com/registry/co...sets/236574/
If you want to buy something or sell something or just talk, shoot me a PM!
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