Quote:
Originally Posted by Spike
As my prewar collection grew and eBay's tax reporting gets more cut-and-dry, I thought a lot more about trading because it defers an expected tax hit for just listing stuff online. Adam's the first in this thread to address taxes. How many of you have tax reporting in mind when thinking about trades vs. sales? If you're a dealer or talking with a dealer, do you consider that as a factor when determining trade value?
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I guess somebody had to bring up taxes.
As your friendly local CPA, I will hasten to observe that trades technically no longer defer your income tax hit. If you bought your piece for $100 a decade ago and trade it for another piece today that is worth $500, then you have a taxable gain of $400, even though you got no cash. Add enough zeros on to these examples, as you're talking about some real potential tax.
Prior to 2017 tax reform, you could defer your taxes this way through a like kind exchange (also known as a 1031 exchange). But no longer, because the only like kind exchanges permitted under current law are for real estate.
Naturally, there is no reporting when it comes to trades. And I'm not your mother, so I can't make you file your taxes correctly. But I will tell you that interest and penalties for filing your taxes incorrectly are no joke. And I'm sure we are all diligent about being good citizens who pay our fair share as required under the law, even when we don't agree with it. But now you know the law, and knowing is half the battle.