Transfer of Large Amounts of Funds?

[rare1]

I hope you guys are comfortable talking about beating the goverment....Couse i wouldnt do it here with out being really nervious exchange telephone #s much safer...."Just a suggestion"***Remember***they can get name,address from here!!!I dont want to upset you guys...The IRS is serious so just be careful what you type for the world to see.
**PLUS**we dont wont to share what we have learned with the nice folks at the revenue service...It's there job to tell us what we have done wrong.

[YENKO DEUCE REGISTRY]

Who/what makes the determination that the sale of an old car is an 'investment' as opposed to 'misc. income'?

[sean70ss]

That is a good point. I think it should be your right to make as much as you want on the car. It is like why when you go to register a car they want you to pay sales tax again? I mean what a rip off. There is 2 things in life death and taxes and the IRS wants 55% of your money when you die. So my suggestion is dont open up a can of worms and expose yourself when you dont have to.

Sean

[YENKO DEUCE REGISTRY]

[ QUOTE ]
That is a good point. I think it should be your right to make as much as you want on the car. It is like why when you go to register a car they want you to pay sales tax again? I mean what a rip off. There is 2 things in life death and taxes and the IRS wants 55% of your money when you die. So my suggestion is dont open up a can of worms and expose yourself when you dont have to.

Sean

[/ QUOTE ]

If you don't expose yourself, an IRS audit will.

[agtw31]

i bought a car off a guy a few years back,caught him in a couple white lies about the car,so i wire tranferred the entire amount owed on the car,and put a stop payment on the deposit check,and told his wife.
wife blew 5 grand on furniture the first day it was in their account.this guy was extremely unhappy.
next time i bet he won't lie.

[Zedder]

The income versus capital gains determination is usually a function of the time the asset was held and the number of transactions that took place during the tax year. A general rule of thumb is that an asset must be held for at least one year to be deemed a sale of personal property that is taxable at capital gains rates. Anything less than that amount of time is usually considered regular income.

[YENKO DEUCE REGISTRY]

Then why the need for short-term vs. long-term cap. gains rates? If something held for less than one year is misc. income, there wouldn't need to be a short term cap. rate

[Zedder]

I can't speak for the US regulations, but here in Canada the regulations that we are talking about apply to the sale or "real personal property" - cars, boats, antiques, etc. and the time restraints are imposed to discourage "flipping" of personal property for income purposes without paying the associated income tax rates. When researching this last year, one interest loop-hole I found was for parts sales. Any real property purchased is assumed to be purchased for a minimum of $1,000 regardless of what you paid for it. Capital gains or income generated is therefore calculated on the selling price minus $1,000. So, you can basically sell all of the parts that you like without tax implications as long as the selling price is less than $1,000. I don't sell parts, so it makes no difference to me, but those who sell via ebay can have a nice little side income coming in.

[427king]

"So, you can basically sell all of the parts that you like without tax implications as long as the selling price is less than $1,000"...........If this were true in the US, id have retired 15 years ago ...Actually while it may or may not be a loophole in Canada to get that 1000.00 exemption as im not familiar with the tax code there , im certain if you utilize that loophole say 100 times a year with intent to avoid business income , you will find yourself on the losing end if you are audited.

[69LM1]

Here's what we are having issues with here. Per the IRS, they plan on auditing 1 in 10 people in Katrina effected areas. Just met with the CPA re: housing. It seems as if the IRS wants you to claim your loss of your house at PURCHASE price, which, to someone who purchased a house 10 yrs ago, means that you cannot take the increase in property value (no appreciation loss). HOWEVER, on contents, they are depreciated based on purchase date, condition etc. They get you both ways!