Taxes On Consignments

[Hankphenom]

Originally Posted by Hankphenom

I stand corrected. Looks like it's a straight 28% of the net of gains and losses on sales of collectibles for the calendar year. Sorry for the misinformation.

Thanks to Jim VB, I stand corrected a second time. The 28% is the MAXIMUM capital gain tax rate on collectibles, otherwise it is taxed at your lower marginal rate for all income including the capital gain. Only if your rate is 28% or higher would you pay 28% on your collectibles gain. I sure hope that's right, and in any case I'm going to shut up now.

[Mikehealer]

Jim VB!!, I haven't seen him post in a long time. I hope he's doing well.

[calvindog]

If you don't declare your gains on your tax returns and get audited you will be miserable when required to pay penalties and interest on top of the taxes owed. In addition, if you do it for a few years in a row, i.e. showing a pattern of tax fraud, you could be indicted. Respectfully, only an idiot would fail to declare these gains if they are significant.

[joetinkerfan]

My understanding of what most of you are saying is that I would only have to declare to the IRS what I gained from the sale of my cards? For example, if I purchase a card for $100 and sell if for $110 I would only have to declare the $10? Also, when purchasing my cards I never kept record of the purchase price. Would I just guess as to what I purchased them for? I do have a very good idea of what I paid, but I could be off a little. Thank you again for the information.

Mike

[calvindog]

Mike, yes, you'd only have to declare your gain. If you don't know what you paid for the card, you should make a best guess -- but be prepared to defend that guess should you be audited.

[Texxxx]

Originally Posted by joetinkerfan

My understanding of what most of you are saying is that I would only have to declare to the IRS what I gained from the sale of my cards? For example, if I purchase a card for $100 and sell if for $110 I would only have to declare the $10? Also, when purchasing my cards I never kept record of the purchase price. Would I just guess as to what I purchased them for? I do have a very good idea of what I paid, but I could be off a little. Thank you again for the information.

Mike

With out records they could make you declare all of it. They probably want but could. My parents were audited when I was around 16 and I have been audited myself. We came out squeaky clean but I knew to keep perfect records. I have records of the cost of every card I own. Even if it's just an email stating what I am paying for it.

[iwantitiwinit]

It's all going to depend on whether you receive a 1099 from the auction house. If you receive a 1099 the revenue will have been reported to the IRS and you will be obligated to report the income. IF you have not received a 1099 you are still required to report the gain and loss however the IRS will not have received notice of your receipt of funds from a third party.