TAX question - sale of high dollar books at auction house/ebay 0

[lhcomics]

If you pay $30K for a comic last month or 10 years ago and sell it for $100K you should only owe tax on the $70K you made. Just be sure you can prove you paid $30K. Like Bob stated it should be treated as capital gain.

Did you ask Alexa? 

[Brian48]

2 hours ago, lhcomics said:

If you pay $30K for a comic last month or 10 years ago and sell it for $100K you should only owe tax on the $70K you made. Just be sure you can prove you paid $30K. Like Bob stated it should be treated as capital gain.

Did you ask Alexa? 

Alexa just says "Pay your d@mn taxes, you dead beat". 

Thanks to all.  I'm looking at finding either a financial planner or tax attorney right now.  Ideally, I want to move the income into something where I can defer the tax like my 401k until later if possible.  If not, I guess I'll have to eat the tax. 28% = ouch!

[blazingbob]

16 hours ago, Badger said:

I think the rule is that you can claim a loss for 2 out of 5 years if you can prove you had a profit motive for all 5 years.

I believe that is correct.  If you have a loss for 3 out of 5 or every year the IRS questions if you are truly trying to run a business or just losing money on purpose for tax losses.  

[W16227]

1 hour ago, blazingbob said:

I believe that is correct.  If you have a loss for 3 out of 5 or every year the IRS questions if you are truly trying to run a business or just losing money on purpose for tax losses.  

http://hbsbusiness.com/index.php/site/articles/avoiding_the_hobby_tax_trap/

 

While a little old - this is a decent read on the subject for those who do this on the side.  Part of the classification s well - is that you should be running your side project as a business. Things like a separate phone line, insurance, business bank accounts, and the like - are all items that can help your case if the IRS comes knocking....

 

 

[Transplant]

I say the same thing every time one of these threads pop up and they do, every year at least.  DON'T LISTEN TO WHAT RANDOM PEOPLE ON THE INTERNET SAY ABOUT THIS!

Talk to a professional:  tax accountant or tax lawyer.  There are complicated rules about offsets for losses against profits in any given year and they vary whether it's a hobby or a business, etc. 

tl;dr:  Talk to a professional. 

Note, some opinions in this thread are of better substance then others and I'm not insulting anyone.  This is a complicated area that differs from common sense approaches that work for other tax issues. 

[mdean2437]

15 hours ago, robocard said:

I didn't realize that was my 1000th post. Not sure it it was or helpful but it is a meaningless milestone, nevertheless. 

 

21 hours ago, Brian48 said:

Silly question, but I wasn't able to get a definitive answer.  When you co-sign high dollar books/art to places like Heritage, CLink, or even an established eBay seller, and they sell for say $100k or so, what do you do as far as taxes go?  It's not exactly the same as selling property or your home.  I've sold books through CLink before, I guess the amounts were insignificant because I've never had to report the sale or anything.  Thx.

You need to setup multiple tax shelters/businesses that are owned by other entities.  You can also just have a "corporation" that you then pay yourself the 100k as president preferably in stock (lower tax rate) .  What about corporate  tax on that  70k profit, you do it right they will give you money. Just show expenses and other losses. 

Best Way to do it

you sell a book under Robocard Inc for a 100k . You have a 2nd corporation (this should not be directly owned by you, but a business/investment group (that you could own) in either Canada or Mexico (free trade)  that shows  you paid 85k from dummy corp to your corp for 85k. Now your down to showing 15k in profit. Is your business out of your house? No problem .  Make a robo lawn care LLC. $100 a week  for mowing $$$, of and that 5k lawn mower you bought for cash, so forth and so on. 

 

Only poor people pay taxes, don't be poor. 

 

DISCLAIMER: I was joking  

[grebal]

On ‎1‎/‎25‎/‎2018 at 12:31 PM, Transplant said:

I say the same thing every time one of these threads pop up and they do, every year at least.  DON'T LISTEN TO WHAT RANDOM PEOPLE ON THE INTERNET SAY ABOUT THIS!

Talk to a professional:  tax accountant or tax lawyer.  There are complicated rules about offsets for losses against profits in any given year and they vary whether it's a hobby or a business, etc. 

tl;dr:  Talk to a professional. 

Note, some opinions in this thread are of better substance then others and I'm not insulting anyone.  This is a complicated area that differs from common sense approaches that work for other tax issues. 

As a former fellow (quasi) tax professional, I say, "hear hear!"

; )