Hobby - Is it a Business, Hobby or Investment?

[cohibasmoker]

I for one like this new section of the forum. As clearly stated by Chris, Politics and/or Religion should be avoided and I will try to abide by his wishes. However, the economy is a vital part of the hobby and as such, shouldn't discussions about the economy be part of the forum?

The difficult part is, how can forum members be advised about pending decisions that may or may NOT effect their personal finances WITHOUT violating forum policy? I don't have that answer but I will try.

Now, to my title....

First - Is it a Business? There have been discussions within the forum about paying taxes on hobby sales. Paying taxes is the smart thing to do and its remarkably easy to do. Buy something, make a copy, when the item is sold, make a copy of the sale. It's NOT rocket science at all. Once the decision is made to pay taxes for hobby sales, you'll be surprised how well you'll be able to sleep at night. Besides, unless a member is selling thousands of dollars worth of stuff a year, chances are sales won't impact on one's personal income taxes - JUST LET YOUR ACCOUNTANT KNOW.

Second: Is it a Hobby? My accountant put it very simply - if you make money, its a business. If you lose money, it's a hobby.

Third: Is it a Investment? The 64K question is, are hobby purchases Investments? Hard question but there is something that is pending that may effect us all. For the first time, Medicare taxes would be assessed on investment income, not just wages. What? Well, if the new healthcare bill is passed, that is exactly what's going to happen.

http://news.yahoo.com/s/ap/20100222/ap_on_bi_ge/us_health_care_overhaul

Again, I am trying to abide by Chris' wishes and I will say this thread is NOT about politics - it's about economics. We all plan well in advance for our future financial well being so doesn't it make sense to be aware of future developments that can effect us and the hobby?

Jim

flaa1a@comcast.net

[Manram]

Re: Hobby - Is it a Business, Hobby or Investment?

Definately a hobby, or at least for me

[murfsteve25]

Re: Hobby - Is it a Business, Hobby or Investment?

Good question. I would say that for me personally, it's mostly a hobby. I definitely lose a lot of money by always buying stuff. Every now and then I'll sell an item, but i dont use the money for vacation or anything like that. I use it to put right back into the hobby. So i dont look at me selling every once in a while as a business. I really dont think im investing either. Mainly because I dont see myself getting anything near what I've spent for the stuff ive bought. Only except could be my Arod bat...but probably couldnt get too much more than what I spent.

[legaleagle92481]

Re: Hobby - Is it a Business, Hobby or Investment?

For me it is purely a hobby. I think the whole investment angle is flawed. Too many people view themselves as "dealers" and invest in stuff and try to sell it for more than they paid to earn a secondary income but that is very difficult to do. I find it interesting particularly when people do this on Ebay or Nfl auctions if an auction the item sells for $50 what makes someone think they can buy it and the next week post it Ebay for $100 and be able to sell it? If it was worth $100 why did it only sell for $50 shortly before? And the market constantly changes. One year x prospect is hot the next year people are calling him a bust or a guys stuff is sought after and he does something wrong i.e. Barry Bonds or for x number of years the hot thing is cards then the next it is autographs and then it is game used stuff, the result is the stuff that was hot is not hot anymore and demand and prices drop. Sure some items you buy will go up in value within a short period of time but on the flip side others will decline.

[vdsporty25]

Re: Hobby - Is it a Business, Hobby or Investment?

Its definitely a hobby for me.....I tend to make impulse buys and sell them later on and take a loss....

[NEFAN]

Re: Hobby - Is it a Business, Hobby or Investment?

Definate hobby for me by definition. The few items I sell I get less than I paid. Then there are the times I paid for an item I never got. Unfortunately that happens too much.

[ironmanfan]

Re: Hobby - Is it a Business, Hobby or Investment?

Totally a hobby for me. Whether an item i've ever purchased has either gone up or down in value since i've received it is totally a coincidence....

[ATigerFan]

Re: Hobby - Is it a Business, Hobby or Investment?

It's a Hobby. Never sold and don't plan on selling anything.

[bigtruck260]

Re: Hobby - Is it a Business, Hobby or Investment?

At this point in my life, it's a hobby...

However, as time goes on - and my treasures become more scarce, I could be involved in a few transactions that may net me more than I paid.

It's all a matter of where one is in life.

I think it's hard to invest in newer athletes since the future price is seemingly factored into the starting price on some items. For the price of a good Pujols bat, you could get a Kirby Puckett, Ryne Sandberg, Pete Rose and maybe even a Paul Molitor HOF collection going.

[WadeInBmore]

Re: Hobby - Is it a Business, Hobby or Investment?

Hobby for me most definately. Items come into my collection and die I've never bought anything for the express purpose of resale...most every item in my collection brings a smile to my face. I collect for my enjoyment...and the players that I enjoyed watching.

wade

[dcrules01]

Re: Hobby - Is it a Business, Hobby or Investment?

Hobby for me most definately. Items come into my collection and die I've never bought anything for the express purpose of resale...most every item in my collection brings a smile to my face. I collect for my enjoyment...and the players that I enjoyed watching.

wade

I'm with Wade I collect Joel Youngblood,Doug Flynn, Bill Pulsipher ,Jason Isringhausen ,Paul Wilson and have a Wally Backman gamer on the way. By far none will ever smell the hall of fame but they are players I liked growing up and scarce at that. My collection is small but irreplaceable in my eyes. It took a lot of leg work and help amongst friends in the hobby to track down these pieces and I am very thankful. I have resold many items but it goes back into my collection made very little money but I have been lucky a few times.

[camarokids]

Re: Hobby - Is it a Business, Hobby or Investment?

I have resold many items but it goes back into my collection made very little money but I have been lucky a few times.

That is why I would NOT pay taxes on sales.

The once in awhile profit will not make up for the losses.

I don't think that I will lose any sleep either!

[legaleagle92481]

Re: Hobby - Is it a Business, Hobby or Investment?

That is why I would NOT pay taxes on sales.

The once in awhile profit will not make up for the losses.

I don't think that I will lose any sleep either!

The losses offset the gains on your tax return. You only have to pay taxes if there is a NET gain.

[camarokids]

Re: Hobby - Is it a Business, Hobby or Investment?

The losses offset the gains on your tax return. You only have to pay taxes if there is a NET gain.

Thanks for the info. I don't think a NET gain will ever happen.

[legaleagle92481]

Re: Hobby - Is it a Business, Hobby or Investment?

Thanks for the info. I don't think a NET gain will ever happen.

Yeah if the government relied on taxes on hobby gains to stay afloat the country would be doomed.