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#31
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#32
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Who/what makes the determination that the sale of an old car is an 'investment' as opposed to 'misc. income'?
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Marlin 70 Yenko Nova-350/360, 4speed M21, 4.10 Posi (Daddy's Ride) 69 SS Nova-396/375hp, 4speed M20, 3.55 Posi (Benjamin's Ride) 67 RS Camaro-327/250hp, 2speed Glide, & 3.08 Open (Danny's Ride) |
#33
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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 |
#34
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[ 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.
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Marlin 70 Yenko Nova-350/360, 4speed M21, 4.10 Posi (Daddy's Ride) 69 SS Nova-396/375hp, 4speed M20, 3.55 Posi (Benjamin's Ride) 67 RS Camaro-327/250hp, 2speed Glide, & 3.08 Open (Danny's Ride) |
#35
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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.
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#36
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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.
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Mark |
#37
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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
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Marlin 70 Yenko Nova-350/360, 4speed M21, 4.10 Posi (Daddy's Ride) 69 SS Nova-396/375hp, 4speed M20, 3.55 Posi (Benjamin's Ride) 67 RS Camaro-327/250hp, 2speed Glide, & 3.08 Open (Danny's Ride) |
#38
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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.
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Mark |
#39
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"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
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#40
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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!
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Rich Pern 69 Camaro COPO "Tin Soldier" |
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