Reporting sales of large $$ items

[mrreality68]

HI

I just play it safe and let my accountant handle the tax side. And I handle the paying the Tax side

[BobC]

Originally Posted by mrreality68

HI

I just play it safe and let my accountant handle the tax side. And I handle the paying the Tax side

Exactly the way it should be Jeff. When in doubt or facing a not so simple tax situation or question, get the help of a qualified tax professional. And, don't always wait till it is time to do your taxes before calling on one for help. To start, if it is in the middle of their tax season when you finally call, they'll already be busy and won't have as much time to help or advise you. And then, by people waiting till after the year ends before finally contacting their tax advisor, it very often makes it impossible for them to help that person because the tax year is already closed. Can't remember how many times I'd told someone I wish they'd called me before December 31.

[Fred]

Originally Posted by mrreality68

HI

I just play it safe and let my accountant handle the tax side. And I handle the paying the Tax side

Sometimes I allow my butler to wipe the slabs of my cards to ensure there's no glare when I look at them. But I'm weary the butler could be a part time IRS agent that is waiting for me to make a mistake...

Ha - would you like some Grey Poupon with that sir?

[BobC]

Originally Posted by Fred

Sometimes I allow my butler to wipe the slabs of my cards to ensure there's no glare when I look at them. But I'm weary the butler could be a part time IRS agent that is waiting for me to make a mistake...

Ha - would you like some Grey Poupon with that sir?

Good one!

But don't laugh too hard. Once had a client who got an 8 figure payout for turning in someone that wasn't quite honest in their dealings with the government. A whistleblower can get a cut..................

[Fred]

Originally Posted by BobC

Good one!

But don't laugh too hard. Once had a client who got an 8 figure payout for turning in someone that wasn't quite honest in their dealings with the government. A whistleblower can get a cut..................

Do you mean 8 figures as in $10M+ or are you counting the two far left as cents (which drops that down to $100K+ for the whistle blower payout)? If it's a true 8 figure payout, then I'm going to start watching the Monthly Pick Up threads and BST sales a bit more closely...

[BobC]

Originally Posted by Fred

Do you mean 8 figures as in $10M+ or are you counting the two far left as cents (which drops that down to $100K+ for the whistle blower payout)? If it's a true 8 figure payout, then I'm going to start watching the Monthly Pick Up threads and BST sales a bit more closely...

It was about $11M, but chopped down to almost $8M that he actually received after the attorneys got involved and took their cut. But the total pay out was a true 8 figure amount, or a 10 figure amount if you want to include the pennies.

[Aquarian Sports Cards]

Did he owe taxes on that $8 million???

[BobC]

Originally Posted by Aquarian Sports Cards

Did he owe taxes on that $8 million???

Yes!

And actually he was lucky. Normally when someone wins a case or gets a settlement that the attorneys also take a portion of, you actually have to claim the gross amount of the settlement as income, and then try to deduct the attorney fees as a miscellaneous itemized deduction, subject to some limitations. At least you used to be able to till they did away with miscellaneous itemized deductions with the 2018 tax law changes under Trump. Luckily for this taxpayer there is a special revenue ruling in effect specifically for whistleblowers that lets them only have to pick up and pay tax on the net amount they got after taking out attorney fees. Saved him around $200K-$300K or so if memory serves.

[Frankish]

Originally Posted by mrreality68

I just play it safe and let my accountant handle the tax side. And I handle the paying the Tax side

Here, here.