Taxes and Auction Site Question

[lug-nut]

I was afraid of what I have read thus far...I was hoping to fall into the 'yard sale' category and not have to claim it. At this point (and thanks to everyone so far) I will make an effort to sell on a private level or just wait it out long enough to make enough $ to pay for the taxes I'll inevitably be paying.

One thing I considered is using an out-of-work/retired friend to list, this way, his income is only the card and not the card plus my income. he will be in a much lower tax braket.

[glchen]

As others have said, it is much better to just go by the IRS rules and pay what taxes you properly owe. There are too many ways for the government to catch you, which would cause big problems that aren't worth it. For example, if there is a deposit into your bank account over 10K, the bank will report that to the government. If you have your friend report that sale on their taxes for you, the IRS may audit him, and ask for his receipt for the cost basis of the card, and he will get in trouble if he submits something fraudulent. Too many possibilities for this to go sideways.

[russkcpa]

Originally Posted by glchen

As others have said, it is much better to just go by the IRS rules and pay what taxes you properly owe. There are too many ways for the government to catch you, which would cause big problems that aren't worth it. For example, if there is a deposit into your bank account over 10K, the bank will report that to the government. If you have your friend report that sale on their taxes for you, the IRS may audit him, and ask for his receipt for the cost basis of the card, and he will get in trouble if he submits something fraudulent. Too many possibilities for this to go sideways.

The bank will report DEPOSITS OF CASH for $10K or more ......and don't try to outsmart the bank by staggering cash deposits that in the aggregate exceed $10K That is more egregious.

[russkcpa]

Originally Posted by lug-nut

I was afraid of what I have read thus far...I was hoping to fall into the 'yard sale' category and not have to claim it. At this point (and thanks to everyone so far) I will make an effort to sell on a private level or just wait it out long enough to make enough $ to pay for the taxes I'll inevitably be paying.

One thing I considered is using an out-of-work/retired friend to list, this way, his income is only the card and not the card plus my income. he will be in a much lower tax braket.

Be careful with this:
If you ARE ever audited the first thing an agent will look at are your bank deposits. If you have deposits that are in excess of income reported you will have a major problem on your hand.
How are you going to explain this ?

If you do get your retired friend to sell the card and report the income his modified adjusted gross income will spike and may throw him into an IRMAA surcharge added to his monthly Medicare premium. That could be substantial and he will be royally pissed at you.

Just be an honest person and report the income. It's not ordinary income if you're not a dealer. It would be a capital gain from sale of collectibles.

I hope you feel better now