In order to participate in the GunBroker Member forums, you must be logged in with your GunBroker.com account. Click the sign-in button at the top right of the forums page to get connected.
Options
GunBroker and the IRS
caf48
Member Posts: 3 ✭✭
I have been selling some of my collection here on GB to finance traveling during retirement, a fellow collector said he heard that there is a dollar amount from sales that once you pass it then the total sales for the year has to be reported to the IRS, I haven't heard this yet but I do know that if you get either 200 payments or $20K in payments with PayPal they send you a tax forum, notify the IRS and you have to claim it, anybody heard of this?
Thanks,
Chuck
Thanks,
Chuck
Comments
I will say that as far as I know, you (seller) and your taxes are none of Gun Brokers business and you won't receive any tax documents from GB.
I have been selling some of my collection here on GB to finance traveling during retirement, a fellow collector said he heard that there is a dollar amount from sales that once you pass it then the total sales for the year has to be reported to the IRS, I haven't heard this yet but I do know that if you get either 200 payments or $20K in payments with PayPal they send you a tax forum, notify the IRS and you have to claim it, anybody heard of this?
Thanks,
Chuck
To the best of my knowledge that's an Ebay/Paypal thing. If you have 200 transaction and it's $20K or greater within the calendar year then they report it to the IRS and send you a form.
If you sell a piece of personal property for a loss, you may not claim the loss.
If you are engaged in the business of selling items, you may deduct losses as inventory. But then you have business form considerations as well.
quote:Originally posted by caf48
I have been selling some of my collection here on GB to finance traveling during retirement, a fellow collector said he heard that there is a dollar amount from sales that once you pass it then the total sales for the year has to be reported to the IRS, I haven't heard this yet but I do know that if you get either 200 payments or $20K in payments with PayPal they send you a tax forum, notify the IRS and you have to claim it, anybody heard of this?
Thanks,
Chuck
To the best of my knowledge that's an Ebay/Paypal thing. If you have 200 transaction and it's $20K or greater within the calendar year then they report it to the IRS and send you a form.
It is more specifically a payment processing thing.
Click here for more info....
However, simply because there is no reporting to the IRS, that does not relieve someone who makes a profit on selling something the requirement to report and pay tax on the profit on the sale.[:(]
That being said, this does not apply to the sale of excellent condition to NIB tang safety Ruger 77's. All sales of these Rugers are automatically reported and IRS will come knocking unless you sell them to a CPA. If you have any of these to sell, contact me and we can work out a GB auction in a way that will circumvent any reporting.[:D]
If you are using Paypal for firearms then you deserve to be taxed.
It is not specific to Paypal. If you were using any card processor or other payment method for more than the $20k limit they will send you a 1099-K and a copy to the IRS
Chuck
quote:Originally posted by grumpygy
If you are using Paypal for firearms then you deserve to be taxed.
It is not specific to Paypal. If you were using any card processor or other payment method for more than the $20k limit they will send you a 1099-K and a copy to the IRS
but you only deserve it if you use pay pal.
And fiery auto crashes
Some will die in hot pursuit
While sifting through my ashes
Some will fall in love with life
And drink it from a fountain
That is pouring like an avalanche
Coming down the mountain
Thank You everyone for your help.
Chuck
I don't know how you managed this but it seems you have avoided the ritualistic linguistic beatings a lot of forum newbies get. Maybe it's because we feel sorry you're selling all your guns! Of course dealing with the IRS is possibly worse.
And fiery auto crashes
Some will die in hot pursuit
While sifting through my ashes
Some will fall in love with life
And drink it from a fountain
That is pouring like an avalanche
Coming down the mountain
If you sell 20 K on Ebay they do report it to the IRS.
Interesting. How can ebay possibly know if you have a capital gain or loss?
quote:Originally posted by armilite
If you sell 20 K on Ebay they do report it to the IRS.
Interesting. How can ebay possibly know if you have a capital gain or loss?
They don't, just as the 1099s a brokerage company will send you for stock sales doesn't mean they know whether you had a gain or loss. This is where good record keeping of your purchases is really important.
If you get audited and the IRS asks, "What about this money?" and you claim, "Oh, that was just the sale of my '________' (whatever it was you sold)," you are going to have to provide the documentation showing what you paid for the item. If you don't, the IRS is likely going to treat your cost-basis as "zero" and you'll have to pay (the "collectables" 28% rate) capital gains tax on the whole amount.
If you can show you paid $200 for that Ruger 10/22 you purchased in 1996, and you sold it for $150 this year, you had a loss (usually the case with firearms and other things one purchases) of $50 and no taxes are owed.
Of course, the real "killer" (true with paying capital gains taxes on anything, not just firearms), you are commonly paying taxes on inflation. You may have paid $200 for that Colt 1903 in 1973, and sell it now for $500, but even though you've really had a loss -- measured in inflation-adjusted dollars -- you will still be required to pay a 28% capital "gains" tax on that "$300 increase" in price. So the government collects $84 from you in taxes because they've printed (and spent) more money causing the value of money to drop. This is really an extreme form of "double taxation" but fat-chance trying to avoid it or getting the law changed.
quote:Originally posted by armilite
If you sell 20 K on Ebay they do report it to the IRS.
Interesting. How can ebay possibly know if you have a capital gain or loss?
Doesn't matter if you have capital gains or losses. It's up to you to prove either or. All they see is 20 K so the rest is up to you. Had a good friend at work do about 26K last year and he had to include it in his tax return last year.