Quote:
Originally Posted by BobC
Mark,
I see what you're trying to do, hopefully bundle a couple items together as one combined tax basis to take advantage of the taxable loss on part of what you are looking to trade. Technically, the IRS would still view the Cobb and Jeffries cards as separate collectibles items, which should then be reported on your tax return as separate sales, even though you traded them both together for something else. You'd end up allocating the sales price, which would be the current FMV of the card(s) you traded for, based on the then current FMV of the items you are trading. Or at least that is what you should be doing.
Now if you were to try listing the Cobb and Jeffries cards together as though they were just one item being sold on your tax return, say you called it "sports card collection" as the item being sold, and listed the tax basis as the $28K in your example, you might be able to get away with it if the IRS doesn't come calling for clarification on that is in the card collection? You basically end up playing what is commonly referred to in the tax world as the IRS "audit lottery". You file a knowingly false return, and pray you don't get caught/picked and audited by the IRS. I would never recommend or advise anyone to be doing that. But I also know that many, many people do just that kind of thing on their tax returns all the time.
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Thanks Bob. I'm not in that situation, but I would've thought what I proposed would've been OK to do, and not a "trick." I appreciate your clarification. I do agree with you that when it comes to the IRS, it's best to play by the rules and sleep well at night.