Quote:
Originally Posted by BobC
But what I really don't understand, and hope you can explain to me then, is how by enforcing the tax laws already in place, and maybe stopping some people from continuing to cheat on their taxes, is that then guilty of ruining or damaging our hobby?
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Bob...Love your opinions and large bombastic posts, even the finger wagging ones. You might find it interesting, of the three other accountants I've spoken with over the past year, you are the only one who speaks of the change in such glowing terms. The consensus among those I spoke with is that it's ridiculous to set such a low limit and will be an inconsistently interpreted, unmanageable drag on everyone involved, not just the American citizens.
However to your question. How does it ruin the hobby? Let me list the ways. (Let's see if I can "out-wall of words" you.)
It's not a hobby any more. We're all bookkeepers at least and business men at worst. Even if you have no intention of selling this year, you have to keep records and receipts (good luck with that) to be prepared to sell someday. And it's not just card/memorabilia purchase receipts. It's all receipts for all things that can help reduce your tax liability down the road. Did you buy penny sleeves? Save the receipt. Did you drive to the post office, record the date and mileage. Did you go to a show? Save the admission ticket. Hey, should I record the mileage for that too? Did you hand a dealer a wad of cash? Take a selfie of the two of you engaged in the exchange (but remember to blur his face). Has anyone other than business men done this over the last 50 years of baseball card collecting?
I can hear the "I've never sold and I never will!" retorts already. I'd be curious to know the percentage of collectors out there who never sell but instead take their collections to their grave. I'd bet it's a very small percentage. (Today we salute you, Mr. Til Death Card Collector Guy...For you it is still a hobby.)
This new rule is as much about proving you didn't make money as it is taxing those who did. I've completely sold down to zero three times in my life. The first time in high school to buy my older girlfriend a worthy birthday present (that was a mistake), once upon college graduation to finance a month long cross country road trip (not even close to a mistake...the Vegas and Tijuana legs of the trip alone were worth it) and once upon divorce (worth it). Did I make money any time. No. Could I prove it? Also no.
I bring this up because life happens. You might not be planning to sell today, but you don't know what tomorrow brings. Maybe someoday, you'll be making this fun decision...Playing it safe and overpaying the federal government, when you likely need the money the most or recreating years if not decades of records and hoping they pass muster if questioned. Sound fun? Hobbies are fun, right?
(Spare the, "you would've faced this under the old rule too" comebacks. Not once in my 3 experiences, did I approach 20K in sales. I'm guessing more collectors fall in in the $600-$20K value range than the 20K+ range.)
And a note on the tax cheats in our "hobby". It's funny Bob that you point the finger at collectors when you mention this (don't shoot the messenger., it was your example) and not the "cash only" and "cash discount" dealers out there. Isn't that really where you should be directing your sarcasm and ire? Why are the collectors the bad guys here?
Can this change be interpreted any other way than an effort to stick it to the little guy? The big fish were already being reported (well their non-cash transactions anyway). The people who can't afford to consistently pay $5 for gas and $6 for eggs, who find a way to help subsidize their cost of living expenses (expenses that were much more manageable just a couple years ago) are really going to swing the pendulum in Ukraine's favor? At a time when all Americans are being squeezed, rolling out a plan to squeeze them harder seems a little tone deaf, if not evil...especially when we see the unpopular ways the government spends our money.
I wonder how many collectors here were ever charged with "tax evasion" for not reporting their under 20K ebay sales? I'll bet none. If nobody is being penalized for it, is it really cheating? Or is it the accepted norm? Or even...gasp. A hobby! It's a much talked about phenomenon, like PSA FBI raids and lawsuits but like those topics, doesn't really amount to anything in the end. It's just an over used, empty excuse to justify the squeezing of American wallets.
A few other bonus features of the rule...You get a more complicated and expensive tax return! It's not just added bookkeeping and records retention...It's literally more money out of your pocket. How fun is that?
Think you can outsmart the system and call yourself a business and deduct expenses on Schedule C? Well, how does self employment tax sound? Sound fun?
Who doesn't love math? Let's say I bought a card five years ago for $500 and today, being a little more well off, buy a much nicer version of that same card for $2000. Not needing two of the same card, I sell the first for $1000. Did I make $500? Feels to me like I'm out $1000. What say you Bob? How would this get reported? Is that income? Who doesn't love having to explain that?
And what about eBay? For me, it was a huge source of my collecting over the past 20 years. However, over the last couple it's become a picked over carcass as seller after seller has gone underground and/or listed less. Has nobody else felt this difference? How is that good for the hobby?
I'm sure there's more, but for now that's enough.