Quote:
Originally Posted by barrysloate
Jason- what if when you purchased this imaginary collection with six Wagners, you decided to keep them all, at least for the time being? What would obligate you to declare them?
|
You are legally obligated to declare the Wagners, but as long as they're off the radar the IRS won't be knocking on your door. I still wouldn't try it. Whenever you sell them, questions will be raised. You would need to tell them you obtained 6 at one time (it would look fishy if you acquired a new Wagner on 6 separate occasions). Whether you say you inherited them or bought them at a flea market or anything you are admitting to tax evasion.
Quote:
Originally Posted by barrysloate
And if you did pay tax on them in the year you bought the collection, but chose to keep them for a while, what would happen when you sold them? Would you now owe no taxes at all? And how does one determine their value on the day you buy the collection? Isn't that kind of hard to assess with accuracy?
|
If you acquire the 6 Wagners and value them at $500,000 a piece that's $3 million that you need to declare. If you sell them 10 years down the road at $800,000 a piece then you just made $300,000 each! Congrats, you need to declare $300,000 per card again on your taxes.
I believe (I may be wrong) that the estimated value can be reasonably made by anyone who could be argued as an expert. I'm sure you could make a strong argument that you yourself would be an expert on the topic. It wouldn't be a huge issue. If you make your estimate now, declare them, and the later pay any gains down the road the IRS will be happy
