Would I Owe Federal Taxes?

fredsheldon · Post by **fredsheldon** » Thu Nov 29, 2012 9:40 am

I think there is a 10% finders fee from the IRS for anybody turning in a neighbor that you suspect of cheating on their taxes if they are charged and convicted of tax evasion. 10% of that $50 gain would be $5.00

Or you can just send me that $5.00 now and avoid the whole mess.

mrhart · Post by **mrhart** » Thu Nov 29, 2012 9:48 am

dusty wrote:If I have a Yard Sale and I sell a bunch of Shopsmith and old computer parts that I have out in the shed (parts harvested from upgrades), would I owe the Federal Government taxes on the proceeds. If yes, at what rate?

I just watched a short blurb on CNN that would indicate YES.

Lets start over here...what SS stuff are you selling? I may need something.

joedw00 · Post by **joedw00** » Thu Nov 29, 2012 10:11 am

If you buy something, you have already paid taxes on money spent, if you pay taxes on money you got for selling it wouldn't that be double tax on the product? More than likely you will sell it for less than you paid for it. This is a DEEP subject. Everyone has their own opinion.

robinson46176 · Post by **robinson46176** » Thu Nov 29, 2012 10:13 am

Just to show you how important the IRS considers your yard sale and hobby, a few years ago the the commissioner of the IRS was on the TV news and in the newspaper both talking about minor income. His statement was that unless there was some sort of filing for a credit involved that they actually would prefer that people making under $10,000 a year not even file because the cost of handling that return exceeds any revenue that may come from it...
Here it is the state sales tax folks that go after the every week (or every day) yard/garage sales. Ultra high volume ($$$) operations "may" trigger reporting to the feds.
They also make an occasional swing through the larger flea markets but most of the time they pick on the "business" booths and not the people selling their own accumulated stuff. They can normally tell the difference in a glance...

A cousin's wife is a long time Fed IRS enforcement agent and I can tell you that she does not care about your private yard sale.

They have a more than adequate supply of big fish to fry. Note that on the rare occasions that she speaks of her work at all it is only in these very general terms. They are very tight lipped about cases.
Just like in the conventional legal system the printed rules and actual practice can be very different.

hjlssfor1 · Post by **hjlssfor1** » Thu Nov 29, 2012 10:25 am

dusty wrote:Hmmm. Does the fact that these are "non-deductible" personal losses essentially mean that they have no impact at all on my taxable monies?

Correct; not deductible, and cannot be offset against (deducted from) other gains. They do not show up on your tax return and have no effect on your tax liability.

Hank

rdavidp · Post by **rdavidp** » Thu Nov 29, 2012 10:38 am

mrhart wrote:Lets start over here...what SS stuff are you selling? I may need something.

Or he could avoid the problem and just give us his stuff since then it will be a non-deductible personal loss. Now he won't have to worry about the tax question at all.

dusty · Post by **dusty** » Thu Nov 29, 2012 11:06 am

rdavidp wrote:Or he could avoid the problem and just give us his stuff since then it will be a non-deductible personal loss. Now he won't have to worry about the tax question at all.

I guess that I am not sure of that. If I "give up" my Shopsmith stuff, technically there is someone who now possesses those assets. Did that someone not just experience a significant capital gain and therefore has a tax liability? Gramps used to tell me, "Boy, there will be nothing in this life you are living that comes for free"!

dusty · Post by **dusty** » Thu Nov 29, 2012 11:08 am

[quote="hjlssfor1"]Correct]

Thank you Hank for your comments (not to be taken as "tax advice").

dlbristol · Post by **dlbristol** » Thu Nov 29, 2012 11:11 am

I have a self imposed restriction on political or religious discussions on the computer, so I will not comment to much here, but this discussion seems to me to show the insanity of the current tax system. How in the world do we think that the issues we need to address can be even discussed, let alone solve them? My experience with my wife's rabbit business, our rentals and other income forms would indicate to me that if we got a group of CPAs we would have no more concensus on this than we got from a bunch of wood workers. I will now violate my restriction and suggest that the Fair Tax might solve this question. I sure enjoy this forum, it is the only place on the net that I would even consider posting this.

dusty · Post by **dusty** » Thu Nov 29, 2012 11:18 am

I agree with you except I do not see this discussion (thus far) as being either religious or political. Taxes are a fact of life. The law of the land. I'm just trying to clarify, in my own mind, how my personal actions might effect someones (mostly mine) tax liabilities.

Who knows, I might find someone with whom I have a grudge that I decide to give a whole shop full of tax liabilities.