Quote:
Originally Posted by barrysloate
Jason- I understand the concept of paying tax on profits, but just when you need to declare those profits is a little more confusing.
Let's take a hypothetical: you buy an old house, and while cleaning the attic, you find a shoebox of baseball cards, and in it is a Wagner. You are a collector, marvel at your incredible fortune, and decide to keep it as the centerpiece of your collection. You rate it VG and value it at a million dollars.
Do you mean to say the next time you pay your taxes, your are going to include an extra 400K? Since most people don't have that lying around, you would not even be able to keep it. On the other hand, if you decide to sell it a few years later, you would easily be able to pay the taxes.
I'm not disputing the law, but it's hard to imagine too many people in that situation actually declaring to the IRS that they found it.
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That's the law, but you're right, most people in that situation would opt not to disclose it (which is illegal). You just made a million dollars! Whether you sell the card or not, you are clearly wealthier with the card than without; you owe taxes. The woman who won the Walmart Wagner needed to sell it, the man who caught Babbry Bonds 756 home run ball needed to sell it, the couple in California with all this gold needs to sell it. It happens. It's a problem I wouldn't mind having
