Taxes On Consignments

[Hankphenom]

Disclaimer: I am NOT a tax professional. But, you are responsible for paying taxes on any gain from the sale of your assets. If you have held them for more than a year, the capital gain rate (for your particular overall marginal tax rate) applies. You can deduct the cost of these assets, assuming you have those records, from the gain at sale, in determining the net taxable gain.

[ullmandds]

hank's right...but I'm guessing most do not claim this income...and I believe at this point the AH's do not report it.

[honus94566]

Originally Posted by ullmandds

hank's right...but I'm guessing most do not claim this income...and I believe at this point the AH's do not report it.

Probably true. But, if a check is in excess of 10K, your bank is required by law to report it to big brother when a check of that size is cashed or deposited.

(from what I understand)

[Texxxx]

Originally Posted by honus94566

Probably true. But, if a check is in excess of 10K, your bank is required by law to report it to big brother when a check of that size is cashed or deposited.

(from what I understand)

That's not true. I deposit lots of checks well over $10000 in my business and they are not reported.

[Leon]

Originally Posted by Texxxx

That's not true. I deposit lots of checks well over $10000 in my business and they are not reported.

I think the federal law has more to do with cash transactions of $10k or more. It would be crazy to have to report all transactions to the govt. that are over 10k. All of that should come out on tax returns, one way or the other.

[e107collector]

Originally Posted by Leon

I think the federal law has more to do with cash transactions of $10k or more. It would be crazy to have to report all transactions to the govt. that are over 10k. All of that should come out on tax returns, one way or the other.

Correct, banks report CASH transactions over $10K.

I am not a tax advisor - but I think if there is a net gain on the sale, it's gets reported on your Schedule D, and I believe it's subject to the 28% collectibles rate.
If there is a net loss, I don't think the loss is allowed, from what I understand - but don't quote me on that. It's not like the sale if stocks, bonds, etc.

Tony

[honus94566]

Originally Posted by e107collector

Correct, banks report CASH transactions over $10K.

Right, so if you get a check from an auction house that's over 10K and cash it, it gets reported to the IRS by your bank.

At least that's what I thought.

[t206hound]

Originally Posted by Leon

I think the federal law has more to do with cash transactions of $10k or more. It would be crazy to have to report all transactions to the govt. that are over 10k. All of that should come out on tax returns, one way or the other.

There was a skit (madtv/snl) or a comedian I heard long, long ago where a person involved with "illegal activities" would stand in line multiple times at the same bank and deposit $9,999 each time.

[sb1]

Collectibles are treated differently than normal capital gains/losses.

There is no short term or long term, the rate is 28% of what your gain is, not the actual sale price. If there is a loss it can be used to offset other collectible losses in the same year. Unlike other investments you also cannot deduct expenses and or related costs on these collectibles.

Auction Houses are not required to file any individual reports, it is up to the seller to report it.

[Griffins]

Originally Posted by t206hound

There was a skit (madtv/snl) or a comedian I heard long, long ago where a person involved with "illegal activities" would stand in line multiple times at the same bank and deposit $9,999 each time.

Actually that is illegal, it's known as sequencing and I was warned against it.

Always amazes me that auction houses aren't required to issue 1099's. I have to 1099 my janitor and anyone else I pay over $599. a year to, assuming they are not incorporated.
And just because you don't get a 1099 don't assume the payer didn't report it and just neglected to send you the form.
Always best to report all income and then find the cost basis for that income rather than under report.

[ibuysportsephemera]

Originally Posted by honus94566

Probably true. But, if a check is in excess of 10K, your bank is required by law to report it to big brother when a check of that size is cashed or deposited.

(from what I understand)

Not true...this is a popular misconception.

Jeff

[slipk1068]

Originally Posted by Hankphenom

Disclaimer: I am NOT a tax professional. But, you are responsible for paying taxes on any gain from the sale of your assets. If you have held them for more than a year, the capital gain rate (for your particular overall marginal tax rate) applies. You can deduct the cost of these assets, assuming you have those records, from the gain at sale, in determining the net taxable gain.

Not sure capital gain/marginal tax rates apply to collectibles. I seem to remember reading that collectibles are their own class of asset and the rate was something huge (28%?) no matter what your marginal rate is and no matter how long you have held the asset. I could be wrong.