Cool Story

[barrysloate]

Originally Posted by Peter_Spaeth

Not since I have lived here (1981).

I lived in Boston 1969-1972, and that's how it worked then. I guess they changed the way you pay.

[Peter_Spaeth]

Originally Posted by barrysloate

i lived in boston 1969-1972, and that's how it worked then. I guess they changed the way you pay.

lol.

[barrysloate]

I'm not that old.

[barrysloate]

Jason- I understand the concept of paying tax on profits, but just when you need to declare those profits is a little more confusing.

Let's take a hypothetical: you buy an old house, and while cleaning the attic, you find a shoebox of baseball cards, and in it is a Wagner. You are a collector, marvel at your incredible fortune, and decide to keep it as the centerpiece of your collection. You rate it VG and value it at a million dollars.

Do you mean to say the next time you pay your taxes, your are going to include an extra 400K? Since most people don't have that lying around, you would not even be able to keep it. On the other hand, if you decide to sell it a few years later, you would easily be able to pay the taxes.

I'm not disputing the law, but it's hard to imagine too many people in that situation actually declaring to the IRS that they found it.

[jhs5120]

Originally Posted by barrysloate

Jason- I understand the concept of paying tax on profits, but just when you need to declare those profits is a little more confusing.

Let's take a hypothetical: you buy an old house, and while cleaning the attic, you find a shoebox of baseball cards, and in it is a Wagner. You are a collector, marvel at your incredible fortune, and decide to keep it as the centerpiece of your collection. You rate it VG and value it at a million dollars.

Do you mean to say the next time you pay your taxes, your are going to include an extra 400K? Since most people don't have that lying around, you would not even be able to keep it. On the other hand, if you decide to sell it a few years later, you would easily be able to pay the taxes.

I'm not disputing the law, but it's hard to imagine too many people in that situation actually declaring to the IRS that they found it.

That's the law, but you're right, most people in that situation would opt not to disclose it (which is illegal). You just made a million dollars! Whether you sell the card or not, you are clearly wealthier with the card than without; you owe taxes. The woman who won the Walmart Wagner needed to sell it, the man who caught Babbry Bonds 756 home run ball needed to sell it, the couple in California with all this gold needs to sell it. It happens. It's a problem I wouldn't mind having

[barrysloate]

So let's take the same story with a twist: you find the shoebox of cards in the attic and you decide to keep them...but you're not a collector and you have no idea they are valuable.

Ten years later you pull them out of a drawer and decide to sell them. And lo and behold (not to be confused with the law firm of Lowe & Behold), they sell for a million dollars. The IRS asks where and when you got them, and you say you've had them for ten years. Have you broken the law? Will you get penalized for not having paid the taxes ten years earlier?

[I Only Smoke 4 the Cards]

Originally Posted by barrysloate

So let's take the same story with a twist: you find the shoebox of cards in the attic and you decide to keep them...but you're not a collector and you have no idea they are valuable.



Ten years later you pull them out of a drawer and decide to sell them. And lo and behold (not to be confused with the law firm of Lowe & Behold), they sell for a million dollars. The IRS asks where and when you got them, and you say you've had them for ten years. Have you broken the law? Will you get penalized for not having paid the taxes ten years earlier?

No.

[thehoodedcoder]

Originally Posted by jhs5120

That's the law, but you're right, most people in that situation would opt not to disclose it (which is illegal). You just made a million dollars! Whether you sell the card or not, you are clearly wealthier with the card than without; you owe taxes. The woman who won the Walmart Wagner needed to sell it, the man who caught Babbry Bonds 756 home run ball needed to sell it, the couple in California with all this gold needs to sell it. It happens. It's a problem I wouldn't mind having

I'm not a tax attorney, but this doesn't really make much sense from a comparison perspective. One could easily argue that when you bought the house and the property you purchased that with it as well. One could easily even argue that you knew it was there when you bought the house.

You have not realized any profit on anything other than what you bought. That's the equivalent of saying, the house was appraised at 500k and I bought it for 400k now I have to pay the taxes on the 100k profit because I have an asset I bought.

It's one thing if you get the item given to you or you find it off your own property, but if you bought the item where it resided its a totally different ball game.

Kevin

[Texxxx]

It S**ks but Jason is right.

http://www.forbes.com/sites/robertwo...xes-take-half/