Is Coin Collecting Tax Deductible

If you have a legitimate business YES. However you would also be taxed on profits. If are going to say you don't make a profit that will only fly for a few years with the IRS. They do understand the difference between a Hobby and a Business.

Sure why not? You would have just to file income taxes for the business.

Here's more info: "When you own a small-business and are a sole proprietor, the Internal Revenue Service allows you to simplify the process by filing your personal and business income taxes together. Owners of a coin business file similarly to any other small-business owners -- using Form 1040 and Schedule C. Using Schedule C, you can write off all of your business expenses, which reduces your net income and tax you owe the IRS. To file your income taxes, you must have records of all income and expenses received from all sources, including your business and personal financial affairs."

Any falsification of tax records is subject to criminal prosecution.

EDIT: Sorry, just saw this is from Canada.

So far, I have kept my sales enough under the radar to avoid having to report them; I don't think that will be the case this year, however.

If you are reporting all sales to the IRS, you can write off your purchases--including shipping supplies, storage supplies and expenses, and even take a "home office deduction" if you have a dedicated coin space. I am really not sure how they would tell the difference between business buying and personal buying--it would not be difficult for most of us to report a massive "loss" which actually gives a substantial bonus to your refund. That's also a nice way to invite the tax man into your home to flip through your "inventory" and probably require you to spend the entirety of that kick back to get your collection professionally appraised.

I wouldn't personally report it unless I received a W2 or similar in the mail. I also wouldn't report more than about a $1,000 "loss" if any at all.

E: Whoops, didn't realize this was posted in the Canadian forums!

@sel_69l

Disclaimer, I am not an accountant but if this is not classed as income as a result of your business as a coin trader but as a hobbyist then the gain/loss would be classified as capital gain/loss similar to bullion investment or stock market investment.

Capital gains/losses are subject to different minima and lifetime exemptions based on your taxation jurisdiction.

@CalmBud

For Canadian CRA compliance, what @pacificoin indicated above is correct from a business income perspective Your Gross Income is Total Sales less COGS. There are a bunch of adjustments and deductions that can apply to Gross income before it becomes Net Income which is what is used to calculate the income tax due . This is why you should engage an accountant to help you understand what to track and what can be skipped. Finally, depending on your business volume, the CRA may require that you submit taxes monthly, quarterly or annually with your return.

Beyond income tax though, in Canada once your 13 month sales hit $30K Canadian, you are required to charge and remit GST/HST on any product sold in Canada... the good news on that front though is you get to deduct (apply as an input credit) any GST/HST that you pay in the course of running your business... from product (coins) to Internet fees to shipping and packaging costs etc. Note: this is 30K in Sales not Profit; if you are running a business, you will get to $30K in sales very quickly.

You may also be required to submit PST if you are in a non-HST province selling within the province eg.based in BC selling to a BC customer.

Again a good accountant is your best friend here.

That said rules regarding income from any business or venture are fairly standard around the Western world . Insight from our American friends is always welcome!
Dealing with the CRA is one thing , having to deal with the CRA and the IRS both at the same time is a nightmare , just ask my dear ( American ) wife!
Yikes!

In Canada coins are classified under "listed personal property", this assumes you are not a business, but selling a personal collection. And taxation will depend on size of the transaction. For small transactions they are generally tax free, for single transactions above $1000 you must declare.

www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/personal-income/line-127-capital-gains/completing-schedule-3/listed-personal-property.html

It is a bit of a grey area between being a business and selling a personal collection. Personally, when I was buying and selling quite a few coins, I declared it as income as a personal business. Even though it was under $5k in total sales. I could usually find enough legitimate expenses to break even and pay no/minimal tax. I could probably have argued LPP, probably not worth the hastle or the risk for a small amount of tax. Now I rarely sell anything, so might look at LPP route to make life easier. With an LPP you can carry losses to offset other gains.