A question that should be answered.

[Tay1038]

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).

[cohibasmoker]

[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?

[eGameUsed]

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).

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!

[David]

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.

[both-teams-played-hard]

Isn't it Patriotic to pay your taxes?

Actually Cohibasmoker, it's patriotic to pay more taxes if you are a billionaire, as opposed to making the salary of a school teacher.

[whatupyos]

Actually Cohibasmoker, it's patriotic to pay more taxes if you are a billionaire, as opposed to making the salary of a school teacher.

LOL Please!!

[cohibasmoker]

Actually Cohibasmoker, it's patriotic to pay more taxes if you are a billionaire, as opposed to making the salary of a school teacher.

Warren - sure, the Billionaires are going to pay for everything. I am sure there is enough money from the Billionaires to cover the trillion dollar deficits.

[spartakid]

[MSpecht]

Thanks Ricards---let's keep this one on track---
Mike

[jppopma]

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.