Selling and taxes 0

[spidrvacc]

Mentioned in the "thrill is gone" thread i also may sell a chunk of my collection after the pandemic is over , by end of next year. My question is based on assumption  selling a entire collection.  No pieces and ( making this figure up) selling for say $24k.  Say collection worth 62k. ( Again not actual value) . Most purchased years ago. Got no reciepts. Some will sell for more then i paid but some less.  I know transactions over 10k get reported . And not looking to do tax fraud but how do you handle the tax issues, say  If buyer pays cash ( say a dealer) do they report the purchase etc.   

 

Again just looking for info from anyone who sold a large collection or super expensive book. 

 

Thanks.

Edited December 2, 2020 by spidrvacc

[wilbil]

i would not rely on members here to advise on a complicated exchange with possible deleterious tax implications.

it is well worth the cost to meet with a cpa and attorney for an hour or so. the alternative of  a misinformed decision will most assuredly be quite a few multiples of that cost. 

i know first hand there are many attorneys and cpas in nj that  can protect your position. 

[spidrvacc]

Of course i will.  And for full disclosure i was a accountant (taxes , banking) for 20 years in NYC. I know the legal / tax  aspects. Im looking for real life experiences selling something so large in value .  Not legal rules.  

Edited December 2, 2020 by spidrvacc

[BlowUpTheMoon]

16 minutes ago, wilbil said:

i would not rely on members here to advise on a complicated exchange with possible deleterious tax implications.

I would rely on members here to advise on such matters as many have gone through the same situation before. 

[wilbil]

3 minutes ago, spidrvacc said:

Of course i will.  And for full disclosure i was a accountant (taxes , banking) for 20 years in NYC. I know the legal / tax  aspects. Im looking for real life experiences selling something so large in value .  Not legal rules.  

i said the same thing a few times. after i paid unnecessarily, i learned. 

my post apparently was interpreted as maybe offensive. it was not intended to be, nor was it meant to be condescending.

yes, it will be reported by a reputable dealer as required by law. breaking down the size of the sales to less than 10k will not change the law., withing the time period required by the law.

it is not a matter of legal rules. it is a matter of real life. 

since you are familiar and know the legal and tax aspects, what would you advise your client? set up a trust? consign to a reputable auctioneer that will assist in fair market value? determine fair market value and whether or not there are benefits by donation of a certain portion? researching the fair market value at the time of your purchase?

speaking privately to the dealer that  are members here?

you don't have any receipts. where would you advise a client to start?

[wilbil]

2 minutes ago, BlowUpTheMoon said:

I would rely on members here to advise on such matters as many have gone through the same situation before. 

that is always an alternative for everything.

[NP_Gresham]

Best of luck dodging those taxes, and if anyone should come knocking I don’t know you, I never met you.

[spidrvacc]

Wilbil did not see your post as offensive. You were absolutely correct. Sorry it seemed that way .

 

And not trying to dodge taxes. Heck no but trying to see how someone in a real life situation experience went. 

I never dealt with sale of collectibles as an accountant, i did bank accounting mostly , no retail or individuals.  Buying and selling forex trades,  borrowing and selling. Capital expenditures, Mortgages.  Depreciation.And there was always legal ways to help every tax situation. Also we had a head office in the cayman islands lol.  Move the money there. It used to be legal. Lol. 

Edited December 3, 2020 by spidrvacc

[wilbil]

20 minutes ago, spidrvacc said:

Wilbil did not see your post as offensive. You were absolutely correct. Sorry it seemed that way .

 

And not trying to dodge taxes. Heck no but trying to see how someone in a real life situation experience went. 

I never dealt with sale of collectibles as an accountant, i did bank accounting mostly , no retail or individuals.  Buying and selling forex trades,  borrowing and selling. Capital expenditures, Mortgages.  Depreciation.And there was always legal ways to help every tax situation. Also we had a head office in the cayman islands lol.  Move the money there. It used to be legal. Lol. 

no harm no foul. i wanted to assist. my wording is not always articulate and clear as to intent. well, never, really.

having been in the situation, i listed some of the methodologies i was presented with and did accept all of the suggestions in varying degrees. a trust, 3 trusted appraisers that were also dealers and auctioneers, and excellent fair market value at time of purchase forensics. 

the trust still exists, which is funny as heck, since it is a clifford. go figure.

you will be just fine. trust yourself first, and weed out from there. the object is not tax avoidance and you don't come across as trying to do that. the object is to pay the least amount of taxes.

it is not what you earn, it is what you keep. i am certain you already know that.

all that is left is to find the road that meets your goals. i don't have any doubt you will. maybe a modified schedule time table like in an old clifford trust type of vehicle. slow might be better than 1 big crash landing. we don't know until we flesh it all out.

[spidrvacc]

Thank you and yes That's it you said it better than me.if not about tax avoidance it's about paying the least amount legally. there's always a way I learned as an accountant. Again just never dealt with collectables before.

Edited December 3, 2020 by spidrvacc

[ADAMANTIUM]

44 minutes ago, wilbil said:

no harm no foul. i wanted to assist. my wording is not always articulate and clear as to intent. well, never, really.

having been in the situation, i listed some of the methodologies i was presented with and did accept all of the suggestions in varying degrees. a trust, 3 trusted appraisers that were also dealers and auctioneers, and excellent fair market value at time of purchase forensics. 

the trust still exists, which is funny as heck, since it is a clifford. go figure.

you will be just fine. trust yourself first, and weed out from there. the object is not tax avoidance and you don't come across as trying to do that. the object is to pay the least amount of taxes.

it is not what you earn, it is what you keep. i am certain you already know that.

all that is left is to find the road that meets your goals. i don't have any doubt you will. maybe a modified schedule time table like in an old clifford trust type of vehicle. slow might be better than 1 big crash landing. we don't know until we flesh it all out.

I was under the impression most "trusts" are "tax free" or to a point or to an amount, but I wasnt sure if it is further tax free if someone else sets it up in your name. Like a will of sorts would set it up in a trust for the heirs, but not sure of the implications of setting one up for yourself. And I guess the slower the payment the more cushion for how full the amount of the total you'll be able to have paid you over time?

[wilbil]

8 hours ago, ADAMANTIUM said:

it is further tax free if someone else sets it up

yes. an example:

admantium parent (1) and attorney establish the admantium educational trust. the other parent and admantium are the grantor/grantee. the first parent and the attorney are the trustees.

the parents purchase land. the land is entered on a schedule of assets, if you will. call it schedule a.

the trust can stay there until the year 4412, and what how many assets flow into or out of schedule a. the educational trust is always in the background working its azz off on behalf of admantium. admantium goes thru life never really using the trust for direct payment of education, but continues to pay property taxes on the original schedule a asset-the land.

the trust reverts after say 15 years or so. during that time the trust experience wampum in and wampum out without burden.

a bit more to it, but that should help with the basic idea.

hope that helps. the one thing to understand, though, is making sure the parties that are joined at the hip by this  are all trustworthy, because you are setting things up for the long way down the highway road of time.

 

[wilbil]

8 hours ago, spidrvacc said:

Thank you and yes That's it you said it better than me.if not about tax avoidance it's about paying the least amount legally. there's always a way I learned as an accountant. Again just never dealt with collectables before.

you are very welcome. it is sort of like i will give you 13 really small hamburgers next tuesday for 1 large hamburger today process. ( i like wimpy).

[theCapraAegagrus]

I plead the 5th.

[spidrvacc]

The trust may not be the way . Due to this pandemic my wife lost her job and i lost hours. Doing ok but its getting tough with a kid in college. I may need the money soonet then i think. 

[rsouxlja7]

Make a spreadsheet of each book and do your best to put down what you paid for each. If you don't remember then go by cover price. And if you're going to do all of this work you may as well grade them and sell them individually while you're at it. 

[wilbil]

1 hour ago, spidrvacc said:

The trust may not be the way . Due to this pandemic my wife lost her job and i lost hours. Doing ok but its getting tough with a kid in college. I may need the money soonet then i think. 

yea, that won't work given the circumstances. time is your enemy in your situation.

maybe a reputable appraiser/auctioneer or 2 may fit better in your circumstances, to pull the cash you need, and maybe what cash can be spared, dump in a non-taxable education vehicle for the child. not my business, but if 62 or over, take that ss. best decision i ever made. the fed hates me. they just hate me. i do send a thank you note to them every year, with a reminder to keep my and my spouse wampum coming.

child graduates... and stays at home. let the child claim his parents on his 1040 as head of household.

better yet, set up the sale of real-estate to the child

pull the cash and you are off to the races.......didedidedi.

i get it. don't let the bastiges wear you down and win. most important thing for you and your spouse is do your best to stay healthy.

i am pulling for you.

[Bluemedgroup]

Following this topic.  I've always paid exactly what is due to the tax man, but also try to legally minimize my tax burden as much as I can.  Can some others who have sold on the big auction houses like HA, CL, etc. chime in on what they did to minimize tax implications?  

[wilbil]

assuming it is ok to state a name on the website belonging to our host (i assume it is not a deal breaker). heritage is an outstanding organization, in all categories...privacy, accountability, expert advice, pricing, appraisals, etc. 

they are also wonderful in telling the client in a very respectful manner that the client is wacky and goomo worthy. that is very important, to me.

[wilbil]

as to board members, and i only personally know a very few.... i will comment that donut ( i have never met him but i have bought from him he just didn't know it) has impressed me for years as being very knowledgeable and straightforward and seems to have a handle on exit plans, value/selling/buying etc., on large and small scale.

i have stated a few times over the years that if i was buying on a recurrent basis, i would use donut and/or vintage first. selling, i don't know, but i don't doubt the honesty or integrity of either of them. i don't have any experience with either in buying large or valuable collections, but integrity and honor is integrity and honor and those that practice same don't change based on circumstances.

i do know that i am not at the top of their "he is a really nice guy and i want to hang out with him" list, but there it is.

i don't know if either of these 2 members would offer advice privately or publicly. worth a pm try, though.