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09-11-2009, 11:56 PM #1
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- Dec 2005
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A question that should be answered.
Hey Guys.
I have a quick question. I'm not very educated about this kind of stuff. Say someone who just collects sports memorabilia and does not own a business, bought an item at a low price and sold it for a substantial profit - should you claim this under federal tax?
Or how about you receive a bat at a baseball game and later on sell it. Should you claim that too?
Lets here your thoughts! or even some stories (good/bad).Email: Tay1038@aol.com
- Interested in Current & Vintage Minnesota Twins game-used memorabilia - Killebrew, Oliva, Carew, Puckett, Hrbek, Blyleven, Mauer, Morneau, Tom Kelly (Manager), Minneapolis Millers & St. Paul Saints
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09-12-2009, 08:12 AM #2
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- Aug 2005
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Re: A question that should be answered.
[QUOTE=Tay1038;160763]Hey Guys.
I have a quick question. I'm not very educated about this kind of stuff. Say someone who just collects sports memorabilia and does not own a business, bought an item at a low price and sold it for a substantial profit - should you claim this under federal tax?
Or how about you receive a bat at a baseball game and later on sell it. Should you claim that too?
Lets here your thoughts! or even some stories (good/bad).[/QUOTE
Isn't it Patriotic to pay your taxes?
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09-12-2009, 08:30 AM #3
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- Jan 2006
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Re: A question that should be answered.
The answer to your question is Yes. Even if you consider what you do as a hobby, and even if you put the money back into your collection, the IRS considers it profit, which is taxable. You will be considered a sole proprieter, meaning you do not have to carry an official business name and in many cases not even be a registered business.
If you ever get audited, be prepared to explain each and every deposit into your bank account.
There are advantages to forming a small business, or DBA (Doing Business As). Sure, you have to pay taxes, but you can also write-off milege to purchase items, set up a SEP (Self Employment Pension, like a 401K for yourself), and even write-off sports show entrance fees, etc.
Hope this helps!
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09-12-2009, 02:08 PM #4
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- Jan 1970
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Re: A question that should be answered.
You are required to report the profit as taxable income.
Duly note that if you are an avid reseller-- say sell part time on eBay or locally-- you can obtain a state resale license, which allows you to buy things for resale and not have to pay sales tax on the purchases.
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09-12-2009, 02:54 PM #5
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09-12-2009, 03:27 PM #6
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09-12-2009, 06:02 PM #7
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09-12-2009, 06:43 PM #8
Re: A question that should be answered.
Ricardo Montoya
ri.montoya at yahoo dot com
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09-13-2009, 05:58 PM #9
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- Oct 2005
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Re: A question that should be answered.
Thanks Ricards---let's keep this one on track---
Mike
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09-16-2009, 02:03 AM #10
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- Mar 2006
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Re: A question that should be answered.
Some states like Michigan even have a spot on the tax forms for you to list anything that you purchased online or out of state. They expect to list everything and then pay the 6% sales tax on these items as well.
In the big picture, I'm sure that not listing a few jerseys you sold on Ebay is pretty minor compared to all of the other tax fraud that goes on. Of course, I can't support any of it though.