shadroch Posted March 9, 2021 Share Posted March 9, 2021 1 minute ago, apollobuzz said: If I trade a $1000 comic for another $1000 comic, there is no profit to tax, correct? I'm not familiar with how the IRS deals with barter. I'd ask my tax guy if I were in your place. Link to comment Share on other sites More sharing options...
apollobuzz Posted March 9, 2021 Share Posted March 9, 2021 1 minute ago, shadroch said: I'm not familiar with how the IRS deals with barter. I'd ask my tax guy if I were in your place. Shad, you are my tax guy! Link to comment Share on other sites More sharing options...
grebal Posted March 9, 2021 Share Posted March 9, 2021 35 minutes ago, apollobuzz said: If I trade a $1000 comic for another $1000 comic, there is no profit to tax, correct? Generally not correct. If you paid $100 for your comic (ie your "basis"), and the one you got in trade is FMV $1000 then you have realized a 900 gain that is recognized as capital gain income (again, applying general rules). Other consequence is that you then have $1000 basis in the new comic you got. thunsicker and ttfitz 2 Link to comment Share on other sites More sharing options...
apollobuzz Posted March 9, 2021 Share Posted March 9, 2021 16 minutes ago, grebal said: Generally not correct. If you paid $100 for your comic (ie your "basis"), and the one you got in trade is FMV $1000 then you have realized a 900 gain that is recognized as capital gain income (again, applying general rules). Other consequence is that you then have $1000 basis in the new comic you got. So I can't simply transfer my "basis" from the comic acquired for $100 to the new comic acquired in trade with FMV of $1000? Link to comment Share on other sites More sharing options...
grebal Posted March 9, 2021 Share Posted March 9, 2021 8 minutes ago, apollobuzz said: So I can't simply transfer my "basis" from the comic acquired for $100 to the new comic acquired in trade with FMV of $1000? You'd need a special rule. You're wanting a "realized" gain that is not yet "recognized" as income. Like e.g. Real Property has [or had, I'm far from current with this stuff, and it often may change] what's called a "like kind exchange" rule that specifically allows for what you asked. But IIRC the Regs that permit that treatment for R.P. doesn't allow that treatment for things like collectibles. From an IRS website - so this could be current: https://www.irs.gov/newsroom/the-treasury-department-and-irs-issue-final-regulations-regarding-like-kind-exchanges-of-real-property Excerpt: As of January 1, 2018, exchanges of personal or intangible property such as vehicles, artwork, collectibles, patents, and other intellectual property generally do not qualify for nonrecognition of gain as like-kind exchanges. apollobuzz and ttfitz 2 Link to comment Share on other sites More sharing options...
Beige Posted March 9, 2021 Share Posted March 9, 2021 1 hour ago, shadroch said: Bartered goods and services are also taxable income. I'm amazed about the lack of understanding on how taxes work. I took one business course in college and I remember someone asking the instructor why everyone didn't start their own small business just for the tax benefits. Did you do one on zoning laws? God this is why we need the laugh emoji back Jasonmorris1000000 1 Link to comment Share on other sites More sharing options...
apollobuzz Posted March 9, 2021 Share Posted March 9, 2021 9 minutes ago, grebal said: You'd need a special rule. You're wanting a "realized" gain that is not yet "recognized" as income. Like e.g. Real Property has [or had, I'm far from current with this stuff, and it often may change] what's called a "like kind exchange" rule that specifically allows for what you asked. But IIRC the Regs that permit that treatment for R.P. doesn't allow that treatment for things like collectibles. From an IRS website - so this could be current: https://www.irs.gov/newsroom/the-treasury-department-and-irs-issue-final-regulations-regarding-like-kind-exchanges-of-real-property Excerpt: As of January 1, 2018, exchanges of personal or intangible property such as vehicles, artwork, collectibles, patents, and other intellectual property generally do not qualify for nonrecognition of gain as like-kind exchanges. Thanks @grebal and @shadroch! You have both given me something to think about. I still prefer the trade path to the sell/buy path since fees are generally avoided in the trade transaction. Link to comment Share on other sites More sharing options...
thunsicker Posted March 9, 2021 Share Posted March 9, 2021 1 hour ago, shadroch said: Before anyone complains about the IRS cracking down on these sales, you might look at the gift the current tax law gives to any qualified small business where you can deduct 20% of your total income as a pass thru expense. There are obviously some limits to it, and some professions aren't eligible but comic dealers are, Yeah my accountant tells me I should change from a W-2 contractor to a 1099 contractor for this reason. Link to comment Share on other sites More sharing options...
FutureFlash Posted March 9, 2021 Share Posted March 9, 2021 Do I have to pay taxes on comic book futures or options? Link to comment Share on other sites More sharing options...
MyNameIsLegion Posted March 10, 2021 Share Posted March 10, 2021 @vodou well here's the ticking bomb you've been warning about in the OA thread. (see first post) Time to switch to NFT's and Bitcoin. snitzer, Boric Gold and WolverineX 2 1 Link to comment Share on other sites More sharing options...
Tnexus Posted March 10, 2021 Share Posted March 10, 2021 1 hour ago, thunsicker said: Yeah my accountant tells me I should change from a W-2 contractor to a 1099 contractor for this reason. As someone who has done both, stick with the W-2. Otherwise you're paying all the SS/Medicare as well as your own workmans comp. Those alone probably will cost you up to 17% of your income. Link to comment Share on other sites More sharing options...
vodou Posted March 10, 2021 Share Posted March 10, 2021 On 3/8/2021 at 1:50 PM, nochips said: According to this link https://www.jct.gov/publications/2021/technical-explanation-of-section-9674-of-hr-1319/ They want to drop the $20,000 reporting threshold for IRS 1099 reporting to $600.00 a year. That means every ebay seller with total yearly aggregate sales over $600.00 is getting a 1099. That is nuts. This will kill ebay and force people to buy and sell with checks and money orders on non affiliated sites, Facebook, the CGC boards, etc.. This is the government thinking they can raise taxes by going after the guy selling stuff in their basement. Ebay was built on that seller. If this bill passes ebay sales will plummet. I know I will not be selling on there ever again. This will ruin some online portals, just ruin them. Uh...you do know you were supposed to be reporting your eBay sales activity to the IRS all along anyway, whether you got a form or not...right? D84 1 Link to comment Share on other sites More sharing options...
vodou Posted March 10, 2021 Share Posted March 10, 2021 23 hours ago, CatskillMike said: If you are audited, they will see any and all deposits into your accounts. So checks and money orders are not "hidden". Again, if you are audited. Expect to be audited. https://www.bloomberg.com/news/articles/2020-11-17/irs-plans-a-50-ramp-up-in-audits-of-small-businesses-next-year And act proactively, accordingly. D84 1 Link to comment Share on other sites More sharing options...
shadroch Posted March 10, 2021 Share Posted March 10, 2021 33 minutes ago, Tnexus said: As someone who has done both, stick with the W-2. Otherwise you're paying all the SS/Medicare as well as your own workmans comp. Those alone probably will cost you up to 17% of your income. The rules have changed. The pass thru is a game changer. thunsicker 1 Link to comment Share on other sites More sharing options...
jharvey Posted March 10, 2021 Share Posted March 10, 2021 (edited) 11 hours ago, shadroch said: The rules have changed. The pass thru is a game changer. I think you are referring to the 20% Qualified Business Income (QBI) deduction? If so, it is incorrect to call it "pass thru". You probably are just getting it confused because pass-through entities such as S Corporations and Partnerships can pass their income through to their shareholders/partners who then get a QBI deduction based on that pass through business income. However, if you are filing a Schedule C on your individual return, nothing is passed through to anybody else. You just get the QBI deduction directly. Edited March 10, 2021 by jharvey Link to comment Share on other sites More sharing options...
the authority Posted March 10, 2021 Share Posted March 10, 2021 This will certainly change the hobby for better or for worse. I spent $2500, $1500, and $1100 cash on 3 small collections this month. How do I account for that expense ? The last guy I bought from didn't even have access to the the internet at home. Found him through a friend. Said he didn't have a bank account. I prefer to pay with paypal but none of these guys had it. All were older. So what's the best way to cover yourself in this instance ? Link to comment Share on other sites More sharing options...
Shrevvy Posted March 10, 2021 Share Posted March 10, 2021 3 minutes ago, the authority said: This will certainly change the hobby for better or for worse. I spent $2500, $1500, and $1100 cash on 3 small collections this month. How do I account for that expense ? The last guy I bought from didn't even have access to the the internet at home. Found him through a friend. Said he didn't have a bank account. I prefer to pay with paypal but none of these guys had it. All were older. So what's the best way to cover yourself in this instance ? Soon, you'll just have to get their social security number and issue them a 1099 at the end of the year... Link to comment Share on other sites More sharing options...
the authority Posted March 10, 2021 Share Posted March 10, 2021 Just now, Shrevvy said: Soon, you'll just have to get their social security number and issue them a 1099 at the end of the year... That's funny. Can't imagine giving my social security number to an individual I don't know. Also don't know how you could make sure it wasn't a number a person just made up out of thin air. I handle a lot of installment contracts on a daily basis. We have privacy notices and other info we have to have signed whenever a customer makes a purchase of we pull credit. So will comic shops now hand you a 1099 when you sell to them ? At times, I've had collections with as many as 20,000 comics in them. Nowhere near that now but its hard to imagine proving what was paid for each book. Maybe this is just a tactic to get individuals off of sites like ebay and leave it to the businesses. Link to comment Share on other sites More sharing options...
shadroch Posted March 10, 2021 Share Posted March 10, 2021 1 hour ago, the authority said: This will certainly change the hobby for better or for worse. I spent $2500, $1500, and $1100 cash on 3 small collections this month. How do I account for that expense ? The last guy I bought from didn't even have access to the the internet at home. Found him through a friend. Said he didn't have a bank account. I prefer to pay with paypal but none of these guys had it. All were older. So what's the best way to cover yourself in this instance ? Get a signed receipt or make a notation on the bank form when you take out the cash.. Even if you pay them in cash, write a check to yourself for the amount and note the purpose on the check, then cash it and pay the people. When I buy a book for more than a few dollars, it gets a small sticker that has when I bought it, where I bought it, the condition I graded it and how much I paid for it. ttfitz and jcjames 2 Link to comment Share on other sites More sharing options...
the authority Posted March 10, 2021 Share Posted March 10, 2021 25 minutes ago, shadroch said: Get a signed receipt or make a notation on the bank form when you take out the cash.. Even if you pay them in cash, write a check to yourself for the amount and note the purpose on the check, then cash it and pay the people. When I buy a book for more than a few dollars, it gets a small sticker that has when I bought it, where I bought it, the condition I graded it and how much I paid for it. I do have the same bank for the last 30 years and I only pull cash for purchases like these comics. Hopefully that helps. I see my accountant in April and I do have an LLC that has nothing to do with my hobby. May have to incorporate these books into the business. Something to look forward to hahahaha Link to comment Share on other sites More sharing options...
