| Author |
 Replies: 21 / Views: 2,333 |
|
Valued Member
Puerto Rico
92 Posts |
Hello. So I have heard of people who make thousands of dollars from cherrypicking on a yearly basis. While thinking about this, one question popped up in my head; is cherrypicking exempt from taxation? Why or why not? Thank you for your time.
|
|
|
|
Valued Member
 Puerto Rico
92 Posts |
Sorry, I meant to post this on the Main Coin Forum. If a moderator could move it, it would be greatly appreciated.
|
|
Bedrock of the Community
13014 Posts |
Nothing is exempt from taxation other than Duty Free Stores and buying things on Military bases. If you makes money youre supposed to report it
|
|
Moderator
 United States
187914 Posts |
Quote:
Sorry, I meant to post this on the Main Coin Forum. If a moderator could move it, it would be greatly appreciated. Done.  Quote:
Nothing is exempt from taxation other than Duty Free Stores and buying things on Military bases. These are examples of sales and/or import tax exemptions, whereas flipping a cherry pick would generate income and a different form of taxation would apply. Quote:
If you makes money youre supposed to report it Correct. When it comes to income taxes, there are always minimums, exemptions, and deductions. This is where you need to consult a local tax professional. I say local because while federal income tax applies to all states, there are local income tax laws than need to be obeyed as well. Of course, our international members have their own laws as well. |
|
Bedrock of the Community
13014 Posts |
Quote:
When it comes to income taxes, there are always minimums, exemptions, and deductions. This is where you need to consult a local tax professional. I say local because while federal income tax applies to all states, there are local income tax laws than need to be obeyed as well. Of course, our international members have their own laws as well.
Our tax law is so insane complicated I just take the understanding going into something I'm going to owe money on it until proven otherwise come tax time. I honestly wonder if anyones actually read the entire thing themselves |
|
Moderator
United States
187914 Posts |
Quote:
Our tax law is so insane complicated I just take the understanding going into something I'm going to owe money on it until proven otherwise come tax time. A wise move. I do the same.  Quote:
I honestly wonder if anyones actually read the entire thing themselves They must not, as it is apparently full of contractions and other paradoxes. A corporate tax attorney once told me that most of his clients violate a handful of laws just to comply with a handful of others. His job is making sure that the violated laws have the least potential penalty. He may have been exaggerating, but considering the evidence, I have to take his word on it.  |
|
Pillar of the Community
United States
716 Posts |
I remember years ago when I was subscribing to Money magazine, in one issue, they posed an extremely complicated tax picture for a family of four. It touched on many aspects of the federal tax code. They sent this out to various CPA's and other tax professionals and asked them to come up with the tax liability for this fictitious family. Well, the results were all over the place with some saying the family owed thousands of dollars and other saying they were getting large refunds. If tax professionals don't totally understand the tax code how can the average person be expected to do so.
|
|
Bedrock of the Community
13014 Posts |
Quote:
They must not, as it is apparently full of contractions and other paradoxes. A corporate tax attorney once told me that most of his clients violate a handful of laws just to comply with a handful of others. His job is making sure that the violated laws have the least potential penalty. He may have been exaggerating, but considering the evidence, I have to take his word on it. I would believe that for sure. The tax code its self I'm sure has numerous contradictions. Theres SOOOOOO many different tax laws its insane. I dont believe for a second every single part was considered for its impact on the whole, rather its just a bunch of individual laws put together into one book that may or may not contradict each other. It seems a lot like youre basically trying to avoid the big laws and hope everything else is good enough not to get attention. Id go so far to say even IRS agents dont know the whole code |
|
Valued Member
United States
477 Posts |
Cherry picking? Please elaborate. Don't know a lot about coins yet but I do know something about taxes and I have one thing to say about it: HR25, S1025, the FairTax bill. This will eliminate all tax on income and replace it with a consumption tax so your concern would be moot. http://www.fairtax.org/site/PageServerRick Edited by shootnstarz
07/20/2013 10:12 am
|
|
Valued Member
United States
123 Posts |
Going back to the original question the answer is simple: all sources of income must be reported unless it is specifically exempted. Even a drug dealer has to pay taxes on their income per the law. Now, where this becomes interesting is defining the source of income. As a cherrypicker, if this is a routine source of income and a "trade" that you commonly engage in for profit, it may be classified as business or personal income and than taxed at your income bracket. If it fails to meet that test it would likely be classified as a collectibles capital gain which is taxed at an obscenely high rate. This type of issue has been one of contention between taxpayers and the IRS and I know one professional who brought the IRS to court over a related issue and a jewelry manufacturer. Of course, keep in mind that income is typically reported for an individual on a cash basis, that is no income is recognized until the coin is sold.
|
|
Pillar of the Community
United States
3253 Posts |
Doesn't seem to be in the CCF Glossary. I would define "cherrypicking" as "purchasing a coin from a seller who does not recognize it as a rarer or more sought-after variety, thus obtaining it at less than its ideal fair market value." Or would someone put it another way? Or should it be "...from a seller whom does not..."
|
|
Valued Member
United States
477 Posts |
"Even a drug dealer has to pay taxes on their income per the law"
And this is the beauty of the FairTax, they will every time they spend one of their ill gotten dollars.
Rick
|
|
Valued Member
United States
123 Posts |
At least the tax code allows drug dealers to deduct their cost of goods when calculating income. Typically there is no deductions we'd for illegal expenditures.
|
|
Bedrock of the Community
13014 Posts |
Quote:
I would define "cherrypicking" as "purchasing a coin from a seller who does not recognize it as a rarer or more sought-after variety, thus obtaining it at less than its ideal fair market value." Or would someone put it another way? Thats how I would define it too. Finding things especially varieties that are missed or under valued. Finding a FBL franklin being sold as a regular one, type 2 ike being sold as a type 1 ect. |
|
Valued Member
United States
477 Posts |
OK, thanks. That's not the definition I would have thought.
I envisioned someone picking through a mass of coins looking for the best ones.
Rick
|
|
Bedrock of the Community
13014 Posts |
Shoot that counts too. Presumably you'd be getting those undervalued in a lot picking out gems that may be hidden in there or searching bank rolls, something along those lines.
|
| |
Replies: 21 / Views: 2,333 |
Posted 07/19/2013 1:30 pm
