So I have never worried about pin sales because the amount wired was small enough or it was in person cash deal. I'm supposed to get a very large bank wire and the issue of the Irs popped into my mind. Since it's so large, I'm afraid I have to pull out tax but my preparer says its 28% $&@$$&&!??
You only have to pay tax on the gain, not the entire amount. So if you bought a pin for $7k and sold it for $10k, you are supposed to report $3k of income. That $3k is taxed at your highest tax bracket so if you are making $80k-100k a year 28% is probably right. You'd technically owe $840 in additional taxes. However you can write off any repairs or other money you put into the pin, plus transportation costs, etc.
Disclaimer: I am not a tax attorney.
Quoted from Richthofen:You only have to pay tax on the gain, not the entire amount. So if you bought a pin for $7k and sold it for $10k, you are supposed to report $3k of income. That $3k is taxed at your highest tax bracket so if you are making $80k-100k a year 28% is probably right. You'd technically owe $840 in additional taxes. However you can write off any repairs or other money you put into the pin, plus transportation costs, etc.
Disclaimer: I am not a tax attorney.
Yeah, my problem in my tax guys eyes is since I bought them by cash I can't substantial a loss even though I am selling at a loss
Quoted from Skins:Yeah, my problem in my tax guys eyes is since I bought them by cash I can't substantial a loss even though I am selling at a loss
Well I mean even if there is no documentation of the purchase you should still be able to put a basis in. you could possibly track back ATM transactions or bank transactions for when you removed the cash when you bought it. If it were me (I file my own taxes anyways) I would put my basis at what I paid for the item even if I had no receipt. Only 1/3rd or less IRS filers are even audited.
My mother works for the IRS in enforcement. Most of the time the people they go after are businesses that withhold payroll taxes but then don't pay them quarterly (they keep the money and use it to float the business through bad times). Individuals selling pinball machines likely don't register high on their list. But again, I am not an attorney.
You don't always need receipts.
http://www.forbes.com/2009/11/23/cohan-irs-tax-charitable-deduction-personal-finance-wood.html
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Canton, OH
