| Author |
 Replies: 20 / Views: 2,706 |
|
Pillar of the Community
United States
2764 Posts |
Hello everyone,
I know that when you investing in stock and you make some profit on your short/long term investment (investment is less than 1 year), you will have to pay taxes on your "capital gain". What about coin, do you have to pay "capital gain taxes" when you make some profit after selling your coin?
I am just curious....
Thanks all.
|
|
|
|
Valued Member
United States
57 Posts |
Honesly, see a tax professional for true anwsers, but CGT usually comes into play for LARGE sums of money, tens of thousands of dollars kind of money (that is profit, not buying $20,000 of items and selling it for $21,000 3 years later.) If you are dealing with that kind of money, you need an accountant anyway.  Edited by Sagan
09/10/2007 8:02 pm
|
|
Valued Member
United States
259 Posts |
First, I agree with Sagan that you ought to consult a tax advisor if this is an issue for you. However, the real issue is whether your profit on the sale of a coin is reportable as income. In most instances the answer is yes. All income over a certain level is taxable unless it's specifically exempt, like gifts under a certain amount or tax-free interest on municipal bonds. As far as how the income is characterized, there is a difference between the sale of a personal item and that of an item held for investment purposes. Here's an article I found http://articles.moneycentral.msn.co...spx?page=allHere's the key part: Sale of personal items. If you sold an item you owned for personal use, such as a car, refrigerator, furniture, stereo, jewelry or silverware, your gain is taxable as a capital gain. Report it on Schedule D (Form 1040). You cannot deduct a loss.
However, if you sold an item you held for investment, such as gold or silver bullion, coins or gems, any gain is taxable as a capital gain, and any loss is deductible as a capital loss.
Example: You sold a painting on an online auction Web site for $100. You bought the painting for $20 at a garage sale years ago. Report your gain as a capital gain on Schedule D (Form 1040), |
|
Bedrock of the Community
United States
14454 Posts |
Thats Brutal! good thing I take a loss on all the coins I sell  |
|
Pillar of the Community
Australia
1262 Posts |
I just don't sell.......lol |
|
Valued Member
United States
277 Posts |
Just buy buy buy and don't sell. Problem solved.
|
|
Pillar of the Community
United States
597 Posts |
It is all a matter of it being reported. If you take a AGE in sell it, then even if you bought at $350 and sold it today for $700, technically you have a cap gain, but these purchases under a threshold I think is $1000 are not reported. However if you took a whole roll of 20 of them in and sold them, you have a cap gains of $7000 and it will likely get reported by the purchasing dealer. That is when you have to pull the driver's license etc. out so they can verify your legally selling them, and so that it can be reported.
However, if you conduct a private sale, betwixt yourself and another collector, who knows? Are you going to contact the Feds so they can tax you?
|
|
Valued Member
United States
204 Posts |
It depends on whether you are doing this as a hobby or for profit (as an investment or business): http://www.irs.gov/newsroom/article...2833,00.htmlAn interesting item of note is that in many states buying bullion (e.g. American Silver Eagles) is a tax free sale, since it is an investment, while buying a Walking Liberty half would be a taxable sale since it is buying a good. Technically you should report your gains (and losses) from garage sales, but in real life the cost in time, hassle and paperwork make it not worth your time or the IRS's (till you start making $5k a month in unreported income - then they'll want to talk to you). This is, of course, not tax advice. Like most of the other posts, I have yet to sell a coin (although I traded one recently, but I consider this an asset swap since I paid additional $ for the new coin) . Then again, I work in finance so I am used to justifying tranactions  |
|
Valued Member
United States
259 Posts |
There's no such thing as "technically" a capital gain. Either it is or it isn't. You should read this again: Example: You sold a painting on an online auction Web site for $100. You bought the painting for $20 at a garage sale years ago. Report your gain as a capital gain on Schedule D (Form 1040),
I think Scottishmoney is saying that you're unlikely to get caught if you have a profit of only $350 on the sale of a coin and no one else reports it. That's probably true. But the fact that someone doesn't report the sale doesn't mean you don't owe taxes on it.
But that IRS tax-tip provided by Inacoffeebuzz adds an angle I hadn't thought about. It looks like there are no tax implications if you sell a coin ocassionally in the course of pursuing your hobby which doesn't make a profit overall.
Edited by chasinva69
09/11/2007 6:32 pm
|
|
Pillar of the Community
United States
597 Posts |
quote:
But you are supposed to report it unless your total income is below the threshold for filing a tax return.
That is the law, but are you going to follow it when you sell the beat up Mercury dime you bought for a quarter, and sold for 75¢? Legally you are supposed to report each and every profit, even the nickel and dime nonsense. So far the government hasn't found a viable way to determine every little last source of income you have, but that day is in the works. |
|
Valued Member
United States
259 Posts |
Sorry Scottishmoney. I edited my post while you were responding to it. Would I report a 50 cent profit on a coin sale? No, I probably wouldn't. $350? yeah, I probably would. I was audited by the IRS once and they can be pretty thorough.  . If you are buying coins to resell, I'd keep good records. . |
|
Pillar of the Community
United States
597 Posts |
IRS Audits are one of instances in the USA where you are guilty until proven innocent. So much for the taxpayer bill of rights etc.
|
|
Valued Member
United States
455 Posts |
I've never sold a coin either.
chas made a good point, one's perspecitve on the right thing to do will likely changes after an IRS audit.
Scottish, who's the pic of in your avatar?
|
|
Pillar of the Community
United States
2443 Posts |
quote:
IRS Audits are one of instances in the USA where you are guilty until proven innocent. So much for the taxpayer bill of rights etc.
Your guilty until proven innocent in everything! And then when your proven innocent there's still doubt. Just the American way. Speaking about capital gain, this reminded me I need to study for my accounting quiz for today. Yippie!  |
|
Pillar of the Community
United States
597 Posts |
quote:
Scottish, who's the pic of in your avatar?
  It is Jaroslava Mucha, the artist/designer of this note's daughter. Edited by Scottishmoney
09/12/2007 06:33 am
|
|
Member
United States
3242 Posts |
They say U can not get away from death or taxs.but read the patriot act about coin collector& art they can seal your Items at a drop of a Dime on you.
|
| |
Replies: 20 / Views: 2,706 |
Posted 09/10/2007 8:31 pm
