Cost basis - Warning tax related topic

steve B · #1 09-02-2022, 11:01 AM

Quote:

Originally Posted by Stupe the Second Sacker

Makes sense guys...Thank you for the advice. It does raise the next question. How can you prove what else came in the lot?

And can you use reasonable value (average of recent sales) as a cost basis cards you don't have receipts for? Do you have translate those values to market value in the year you bought the card?

PS...What a nightmare for the casual seller.

When I was selling a lot on ebay, most of my stuff was inexpensive. And even my better items had cost me very little.

What we did was report it as a hobby business, and simply made our cost 0 paying tax on the full gross.
That was actually close enough to reality that the time spent on documenting the cost and profit for everything would have "cost" more than we paid.
And hobby businesses as far as I know can't claim losses.

Did I overpay on taxes? Yes, I sure did. Did I save hours of paperwork? Yes.

Stupe the Second Sacker · #2 09-02-2022, 11:37 AM

Quote:

Originally Posted by steve B

When I was selling a lot on ebay, most of my stuff was inexpensive. And even my better items had cost me very little.

What we did was report it as a hobby business, and simply made our cost 0 paying tax on the full gross.
That was actually close enough to reality that the time spent on documenting the cost and profit for everything would have "cost" more than we paid.
And hobby businesses as far as I know can't claim losses.

Did I overpay on taxes? Yes, I sure did. Did I save hours of paperwork? Yes.

I have a problem with that just on principle. My paycheck is being squeezed enough.

steve B · #3 09-06-2022, 09:43 AM

Quote:

Originally Posted by Stupe the Second Sacker

I have a problem with that just on principle. My paycheck is being squeezed enough.

What value do you place on your time?

For example, I bought a railroad china plate for 25 cents at a thrift store. It sold for over $600...(yes, really ) The time I would have had to spend to prove and back out that 25 cents from the profit would be way more than the few cents of tax saved.
Nearly everything I sold came from places that didn't provide a detailed reciept, or any reciept at all, like yard sales.

the time I would have spent doing the paperwork backing out what was often a couple dollars, or much less for stuff like postcards bought in a lot where each was maybe 5-10 cents was far better spent looking for more stuff, or just having fun.

raulus · #4 09-06-2022, 09:57 AM

Quote:

Originally Posted by steve B

What value do you place on your time?

For example, I bought a railroad china plate for 25 cents at a thrift store. It sold for over $600...(yes, really ) The time I would have had to spend to prove and back out that 25 cents from the profit would be way more than the few cents of tax saved.
Nearly everything I sold came from places that didn't provide a detailed reciept, or any reciept at all, like yard sales.

the time I would have spent doing the paperwork backing out what was often a couple dollars, or much less for stuff like postcards bought in a lot where each was maybe 5-10 cents was far better spent looking for more stuff, or just having fun.

Because who doesn't love to nerd out on tax stuff...I will observe that modern tax forms force you to round to the nearest dollar. So 25 cents is zero dollars. Even if you wanted to waste your time proving your 25 cent basis, it's as good as zero when it comes to calculating your gain.

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