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Old 03-28-2012, 01:27 AM   #1
netperson
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Required To Report Collectible Loss?

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For a sale of a "collectible", if the sale results in a loss do I have to report the loss to the IRS? I have no other collectible sales, or gains for this year to offset, and would rather not deal with reporting.

To be clear a collectible losses are not deductible, so there is no advantage to reporting. My only concern is that if I was ever audited they would see a large deposit in my bank statement and may consider it income.

I just read this on the IRS "3. You must report all capital gains." - no mention of reporting a loss.
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Old 03-29-2012, 06:08 AM   #2
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“For a sale of a "collectible", if the sale results in a loss do I have to report the loss to the IRS?”--->Collectible losses are personal property, not possible to carry forward.It deepdns; as long as youhave both a long-term gain and an overall gain from short-term plus long-term sources combined to offset your losses, then you need to report gains from collectibles in a manner similar to other capital gains. You need to report collectibles gain / loss on line 4 of the 28% rate gain worksheet; Line 18 in the Instructions for Schedule D (Form 1040). The IRS has unveiled a new tax form for reporting capital gains and losses from stocks, bonds, mutual funds and similar investments. Starting with the 2011 tax year, investment transactions will be reported on the new Form 8949. Youneed to report in Part II of Form 8949 on line 3 a collectibles gain or (loss). A collectiblesgain or (loss) is any long-term gain or de-ductible long-term loss from the sale orexchange of a collectible that is a capitalassets. It is reported on 1040 line 44.
“ I have no other collectible sales, or gains for this year to offset, and would rather not deal with reporting.To be clear a collectible losses are not deductible, so there is no advantage to reporting. My only concern is that if I was ever audited they would see a large deposit in my bank statement and may consider it income.I just read this on the IRS "3. You must report all capital gains." - no mention of reporting a loss.”----> You need to total all gains and losses on Sch D to determine if there is a long-term capital gain from all sources that is not entirely offset by short-term losses. If there is both a long-term gain and an overall gain from short-term plus long-term sources combined,then, you should complete the "28 Percent Rate Gain Worksheet" on page D-8 of the instructions for Form 1040. If both of these conditions are not met, there is no special tax treatment of the gain from selling the work of art.Indeed many people do not report them if it was a cash transaction and untracable.

Last edited by Juno; 03-29-2012 at 06:11 AM..
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Old 03-29-2012, 02:13 PM   #3
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Personal losses are not deductible, neither as ordinary losses no as capital losses. You do not have to report personal nondeductible losses, but you should keep records so that you can explain the deposits IF you should be asked to do so.
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Old 03-30-2012, 02:25 AM   #4
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Great, thank you skyhawk and juno for the answer to my question!
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Old 04-02-2012, 08:49 PM   #5
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There was a huge discussion about this type of scenario on a sports card collecting forum. Although the discussion mainly involves paypal reporting to the IRS, your type of situation was raised as an example. A couple of CPA's chimed in and from the way I read things, the IRS can come back and say "prove you lost money, where is the recipt for the original purchase?" If you can't prove them wrong, you will owe:

http://www.blowoutcards.com/forums/o...s-help-us.html
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Old 04-02-2012, 09:11 PM   #6
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Quote:
Originally Posted by boohoo View Post
There was a huge discussion about this type of scenario on a sports card collecting forum. Although the discussion mainly involves paypal reporting to the IRS, your type of situation was raised as an example. A couple of CPA's chimed in and from the way I read things, the IRS can come back and say "prove you lost money, where is the recipt for the original purchase?" If you can't prove them wrong, you will owe:

http://www.blowoutcards.com/forums/o...s-help-us.html
Thanks. I guess the real question is what is their minimum requirements for a private party receipt? Such as I collect antiques and such and some people don't want to give me every detail of their life such as address etc. on a receipt.

does anyone know the minimum fields/data required by the IRS handmade private party receipt for say a painting?
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