Not a gouging bitch thread, just a question about the legal aspect of it.

[Scott.Thornton]

I know very little about private sales and taxes but I was wondering about all the selling for huge profit that has been going on here. Does all of this need to be reported at tax time and is there a chance of the gov monitoring websites like this and going after the sellers? Like I said not a bitch thread, Ive come to terms with the reasoning behind the high prices and can't complain anymore, just wondering about the tax aspect of it.

 

[Dgraham225]

I think someone would have to be dealing in very large quantities to get noticed.. There are plenty of illegitimate home businesses and the like out there that go untouched for years

 

[SpeedRacer]

Yes it should be reported income like anything else (lemonade stand, etc). No, I don't think the IRS is watching BS to catch people that may be skating $50 in taxes.

 

[DS727]

Do you report EVERYTHING to the IRS other than a W2 or 1099?

 

[Scott.Thornton]

Do you report EVERYTHING to the IRS other than a W2 or 1099?

Trying to turn this personal? I didn't ask about anyone in particular. Just a general question.

Sent from my Galaxy Nexus using Tapatalk 2

 

[J-Dog]

Now I don't buy on line but if I did every year the State of Louisiana asks if I shopped on line when I file my state tax return. Apparently if you do buy on line it is incumbent upon you the buyer to remit to the state the appropriate amount of tax. I'm sure those that do buy on line pay all the taxes they owe.

 

[LACamper]

With 16000 new IRS agents they just might start tracking things like this! Those guys are going to get bored busting typical tax cheats.
Seriously, with this administration I wouldn't put it past having them come down on things like this!

 

[JNieman]

There's likely a minimum profit you have to make before it's report-worthy, if I were to guess. Kind of like the question on your state forms: "Have you bought anything out of state that you didn't pay state taxes on?" that everyone lies about and says "No." - Unless you buy a /lot/ of **** off Amazon, it's likely that you're under the minimum where it begins to matter.

Everyone is wrong on their taxes, I guarantee. You're just not wrong enough to matter.

 

[Scott.Thornton]

There's likely a minimum profit you have to make before it's report-worthy, if I were to guess. Kind of like the question on your state forms: "Have you bought anything out of state that you didn't pay state taxes on?" that everyone lies about and says "No." - Unless you buy a /lot/ of **** off Amazon, it's likely that you're under the minimum where it begins to matter.

Everyone is wrong on their taxes, I guarantee. You're just not wrong enough to matter.

I would have agreed before, but recently one of my coworkers actually had to report that he had ordered some cigars from out of state. They had actually monitored and found him for it. I figure if firearms are such a large priority for the powers that be, we might be under increased scrutiny.

 

[SpeedRacer]

I would have agreed before, but recently one of my coworkers actually had to report that he had ordered some cigars from out of state. They had actually monitored and found him for it. I figure if firearms are such a large priority for the powers that be, we might be under increased scrutiny.

Tobacco taxes are a whole different animal, and are collected at a state level.

 

[Scott.Thornton]

Tobacco taxes are a whole different animal, and are collected at a state level.

I do remember a while back about a limit to items sold due to someone being investigated for being a dealer. I'm sure that at the profit levels being seen here, it will be a quality vs quantity argument. The feds don't really care how many, just how much you make on the deal.

 

[honestlou]

Actually, the dollar amount of sales or profits has nothing to do with the question of owing income taxes. If you are not in the business, you can sell personal items for a profit and do not owe income taxes. Under both federal and state law, an "occasional sale" is not taxable.

I can sell a gun I own, or liquidate a collection, and I do not have to report the income. If I buy and sell with the intent to make a profit, even if my profit is small, then the income is taxable. It does not matter if you have a business license or call yourself a business; the determining factors are your intent and the regularity of the activity.

For example:
If, as a private collector, you bought a machine gun 30 years ago for $500, and sell it today for $20,000, you do not owe income tax. But if you make "survival bracelets" in your home and sell them online through eBay, averaging one each month, for a total annual profit of $250, then that income is taxable.

****EDIT: The machine gun was not the best example, as you may indeed owe a tax on the capital gain, but it is not regular income, and does not have to be reported as business income. ****EDIT

Therefore, if you liquidate your entire stash of guns and ammo that you have owned for sometime, it is not taxable. But if you are currently buying ammo or guns and flipping them for a profit it is taxable, and in the case of guns, you are a dealer who is required to possess a FFL.

 

[Scott.Thornton]

Actually, the dollar amount of sales or profits has nothing to do with the question of owing income taxes. If you are not in the business, you can sell personal items for a profit and do not owe income taxes. Under both federal and state law, an "occasional sale" is not taxable.

I can sell a gun I own, or liquidate a collection, and I do not have to report the income. If I buy and sell with the intent to make a profit, even if my profit is small, then the income is taxable. It does not matter if you have a business license or call yourself a business; the determining factors are your intent and the regularity of the activity.

For example:
If, as a private collector, you bought a machine gun 30 years ago for $500, and sell it today for $20,000, you do not owe income tax. But if you make "survival bracelets" in your home and sell them online through eBay, averaging one each month, for a total annual profit of $250, then that income is taxable.

So by your explanation the intent to sell for profit is reason to report for tax purposes?


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[honestlou]

So by your explanation the intent to sell for profit is reason to report for tax purposes?


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That is not what I said. You can sell for a profit. It is the intent to operate a business, as evidenced by the regular buying and selling. There is no set time limit; you can buy a gun for personal use and decide you don't like it and sell it the next day, all without it being taxable. But if you buy and sell "regularly", then it is a business. And no, there are no hard definitions for regularly.

I have guns and ammo and mags that I have owned for 4 years or more--I can sell them at a profit and it's not taxable. If I buy ammo at Walmart this morning and sell it later today, and my intent was to make a profit, then it's taxable.

 

[TomTerrific]

Since I moved to Kentucky, many of my Amazon purchases have sales tax added since they have a large distribution center just up the road in Lexington.

OTOH, I get next day delivery often.

There is a movement afoot to require online sales to add the state sales tax. This would be a boon for state governments and I sometimes wonder why it hasn't been done.

 

[madwabbit]

from a legal aspect, honestlou hit bullseye for federal tax law.

 

[JadeRaven]

There is some terrible advice in this thread.

"gross income means all income from whatever source derived"

If you are in need of tax advice you should consult a tax professional.

 

[Ironman26]

This thread is gonna get bent out of shape quick.....let all the perfect tax reporting, law abiding, honest tax payers step forward and divulge all your info on how you report !!!

 

[SpeedRacer]

If you are in need of tax advice you should consult a tax professional.

And that's really the bottom line. It'll only go downhill from here.