Reporting sales of large $$ items

[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.

[Aquarian Sports Cards]

I'm just imagining the scenario of him not paying on his 8 million and getting reported by a whistleblower who then makes a million, who doesn't pay and gets reported by someone who makes $80,000 who doesn't pay...

[Gnep31]

A lot of great information. Thanks for the thread!

If voting on the poll my vote is: I would never let the gov't steal even more of my $ if I could avoid it.

I won't sell on Ebay or anywhere else because of the fees, record of sale, potential taxes etc.

Full disclosure...I haven't sold anything in decades as my wife can attest...LOL. When it does come time to sell the deal(s) will be in person cash sales.

One question I do have for the group.... What about a small collector who sets up at a local card show? Most don't have a business license. Are they expected to pay taxes?

[BobC]

Originally Posted by Gnep31

A lot of great information. Thanks for the thread!

If voting on the poll my vote is: I would never let the gov't steal even more of my $ if I could avoid it.

I won't sell on Ebay or anywhere else because of the fees, record of sale, potential taxes etc.

Full disclosure...I haven't sold anything in decades as my wife can attest...LOL. When it does come time to sell the deal(s) will be in person cash sales.

One question I do have for the group.... What about a small collector who sets up at a local card show? Most don't have a business license. Are they expected to pay taxes?

What kind are you asking about?

Income tax..........sales tax..........both..........something else??????