Quote:
Originally Posted by G1911
This is the boat I am in. Is it realistic to expect me to have kept documentation of what I paid for a card 18 years ago at a show when I was 13? Was it $100, or $125? Maybe it was $200. I don't know, and if I do know (I can't recall what I had for breakfast last Monday but I do recall what a lot of my cards cost exactly for some reason), I sure as hell can't provide any evidence. The burden of proof has largely shifted with this change.
If I can't recall what I paid or can't document it at all, I can risk the IRS coming after me or just pay full income taxes for what the 1099 states even though my cost surely wasn't $0. Which for me is almost 50% (9.3-10.3% state + 35% federal= 44.3-45.3% total) income tax (plus 10% sales tax on whatever I paid originally) on the full sale price if I don't know the exact figure I paid for it.
Even the most honest tax-payer realistically has to make guesstimates sometimes. I highly doubt anyone here has gotten receipts for every single item they've ever purchased. It's simply not practical, or realistic. Try asking a dealer at your local show for an itemized receipt of all 100 cards you just bought from him for your tax records if you sell a dupe in 20 years, and let us know what they say.
I don't think one has to be a scofflaw to question or not enjoy this shifting of the burden of proof and not being a fan of half their money going to the state every year as income tax, sales tax, property tax, and a dozen more.
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Overall accurate statements, pretty much agree about everything you're saying.
Regarding not having complete and accurate records, see what I said in post #94.
Regarding your tax liability though, if you treat your gains from card sales as Investments or personal Hobby Collectibles, instead of filing as a Dealer in business, AND you held on to the cards you sold for a gain for at least 1 year before selling, the gains from those card/collectible sales should only be subject to a maximum federal long term capital gains tax rate of no more then 28%, not the 35% you noted in your post. And if you are filing and paying taxes on your card sales as a Dealer in business, did you remember to factor in the self-employment taxes on your net business taxable income? That could push your federal tax liability even higher.