So The Economy Is Doing What To Coins?

Of course, I just buy, mostly.

you can't deduct the losses as those would be consider part of the fun of the hobby(personal expense). The tax code is rigged on the collector stuff. Win/ they win... Lose... no effect.

-SFWUSC

Somehow, the words "Fair" and "Taxes" don't seem to go together real well.
If you like this, you are going to love the new tax code/wealth redistribution plan the new administration has on tap for us. Is it any wonder that people are pushing wealth into tangible assets like coins, bullion, guns, jewelry or gems or bundles of well hidden cash?

I am almost positive that you can write off stock losses to the amount of $3000 a year in the US, but they don't seem to advertise it much.

I think your right but no sure since someone does my taxes and I just sign where told to. I think I got a lot of due to that last year.
So now with taxes. If you find a Cent on the ground, sell it for $1,000 due to it being rare, you would deduct the original one Cent for an investment, deduct shoe wear finding that coin, wear and tear on a belt from bending over, gas for your car taking it somewhere for sale, pen and paper deductions for sales records. Of course you would have had to purchase a paper with coin prices so you would know what that coin is worth and deduct that also.
Any tax experts verify this?

This is absolutely correct, but I think the point that was being made above was that your gains get fully taxed - but you can only deduct $3000 of losses. If you have more losses than that, you can carry them over year to year.

I'm not a tax lawyer, but I am a lawyer and there are some relevant principles here. First - and this is written into the tax code - is that for the vast vast vast majority of people, on unreported income or loss, the honor system applies. Generally audits are conducted only when significant anomalies show up. Collectibles are hardly on the radar except for the most organized and incorporated dealers. Most collectors who sell or swap coins from time to time are not in this category.

Another important principle is that anyone accused of violating the law enjoys a number of constitutional protections that would be virtually impossible to satisfy if the IRS wanted to prosecute average collectors for allegedly violating the capital gains tax laws. Such as the burden of proof: In criminal prosecutions - which virtually all such actions are - the burden (as most people know) is proof beyond a reasonable doubt. The rules and standards of evidence would also apply to such prosecutions as well. Hence the need for that infamous "paper trail" that rarely exists in the collectibles markets.

The plain fact is, the IRS hasn't the resources to monitor sales of collectibles. The vast majority of coin "dealers" are just collectors who are selling stuff they bought a while back. No one keeps receipts, if indeed they even got one. And I don't know anyone who has received a 1099 form for selling his or her coins. I know that some of my coins have appreciated, while others I paid too much for. Some were "swapped", something that is way beyond the competence of the federal government to evaluate.

Thus, if I were to be charged with a crime, even a tax crime, the burden would be on the government to prove the alleged capital gains beyond a reasonable doubt. To do this, an extensive audit would have to be conducted that would necessarily involve an investigative process to determine who sold what to whom at what price. Although coin dealers are required to report income from sales, this is largely so that the states can collect sales tax. Casual sellers who come in and sell their late grandfather's Morgans are not coin dealers. Real dealers have to pay (and therefore charge) sales tax as with any business. But if Jane Collector walks into Stack's and sells her proof sets, or whatever, she is not required to charge sales tax. Also, please notice that with even the biggest dealers, cash transactions are generally preferred. The aforementioned establishment still doesn't take credit cards. (*Since Stack's has merged with ANR, you can buy coins from them online or through the New Hampshire offices with credit cards, but not at the actual store on 57th St in New York.

Because such audits are virtually impossible to conduct in any meaningful way, and would ultimately be unprofitable to the government for all but the very highest rollers, the cost of auditing would far exceed the benefit of collecting the back taxes and penalties, or the even more dubious benefit of commencing lawsuits and criminal prosecutions.

Finally, collectibles are, almost by definition, subjective in value. If you doubt that, compare CoinValues's online price guide to PCGS's. A coin is worth what a collector will pay for it, and that decision may be based on any number of factors totally unrelated to such mundane notions as what a particular coin is "worth". I've certainly paid more for coins of exceptional appeal than what was listed on the price guides at the time. With no regrets. Usually.

So, I would UNOFFICIALLY opine that, unless you're buying and selling at a high professional rate, you don't have to worry about whether your coins have generated any capital gains that you might have to pay taxes on if you sell them. (Note: I'm talking about the living. if you die and the collectibles are part of your estate, other laws and priniciples may apply.)