Re: Capital Gains on muscle car (state of PA)
 

Sam,

I'm having a tough time with all this. Unless this was a really high dollar value muscle car (nearing or into 6 figures), I doubt that the IRS would pay any attention, especially if there were no 1099's involved. Many, many vehicles these days sell in the $30K - $50K range so it hardly raises an eyebrow. Who's going to ask how long they've owned the car or how much they have invested in it?

Re: Capital Gains on muscle car (state of PA)
 

[ QUOTE ]
Many, many vehicles these days sell in the $30K - $50K range so it hardly raises an eyebrow. Who's going to ask how long they've owned the car or how much they have invested in it?


[/ QUOTE ] Im pretty sure the IRS is very concerned about unreported 50K transactions,as well as the 100K ones .

Re: Capital Gains on muscle car (state of PA)
 

Bill,

First of all, I haven't seen you lately at the Pavillions. Just a reminder, but this is one of the reasons u moved from that tuff winter clime. Come on down! https://www.yenko.net/ubbthreads/imag...lins/laugh.gif

As to your comment, I hear you. But, I am asking for a friend as this is the direction she has been advised to head.


See u in Scottsdale... https://www.yenko.net/ubbthreads/imag...lins/beers.gif

Re: Capital Gains on muscle car (state of PA)
 

[ QUOTE ]
Sam,

I'm having a tough time with all this. Unless this was a really high dollar value muscle car (nearing or into 6 figures), I doubt that the IRS would pay any attention, especially if there were no 1099's involved. Many, many vehicles these days sell in the $30K - $50K range so it hardly raises an eyebrow. Who's going to ask how long they've owned the car or how much they have invested in it?

[/ QUOTE ]

I'll quote myself from an earlier post: tax planning is encouraged, tax avoidance is unlawful. Just bec/ you don't think you'll get caught, doesn't make it right. I'm not sure if a situation like this constitutes fraud, but if so, keep in mind that there is no statute of limitations on fraud. So, that '7 year window' that everyone thinks they have - is not not 7 years! https://www.yenko.net/ubbthreads/imag...ns/naughty.gif

The best tax advice I gave to a fellow sYc member was to simply determine your price, calc the cap gain tax, and add that amount to your price. There are some netting down / grossing up calculations in there, but it's the best way to get your number & still pay your taxes.

BTW, 67rs, if there's more to this discussion than we've covered, by all means enlighten us.

Re: Capital Gains on muscle car (state of PA)
 

So, what happens if you lose money on a classic car? Can you write off the loss? https://www.yenko.net/ubbthreads/imag...mlins/hmmm.gif

Re: Capital Gains on muscle car (state of PA)
 

You can only claim the loss against other gains. If you end up with a loss for the year you are on your own . The IRS wants to be your partner only when you win.

Re: Capital Gains on muscle car (state of PA)
 

In general, as a private individual, only gains on capital property are assessed with respect to tax. Each piece of capital property is treated individually and gains/losses cannot be accumulated and taxed as a whole like a business or investment. This is why you cannot write off the losses on your daily driver...

Re: Capital Gains on muscle car (state of PA)
 

Chuck is mostly correct. You can deduct capital losses up to the amount of your capital gains plus $3,000 (if MFJ). You may be able to use capital losses that exceed this limit in future years, (called 'carryforward'), however carryforwards have a limited life - you can't carry them forward forever.

The IRS taxes income, not losses. In their mind, it's not their fault you had a loss, so why should they allow a tax deduction for it? The offsetting of cap gains + $3,000, and the carryforward is a concession. This is where tax planning comes into play. Let's say you are going to liquidate some construction assets, and are going to take a bath on them. That would be the time to sell the muscle car, that way you could offset the loss on the equipment against the muscle car gain.

I believe there is a s/t vs. l/t angle to this as well.

Re: Capital Gains on muscle car (state of PA)
 

[ QUOTE ]
In their mind, it's not their fault you had a loss, so why should they allow a tax deduction for it?

[/ QUOTE ] Why is it when banks and mortgage companies make greedy and bad decisions they get bailed out on thier losses , but car owners dont?? https://www.yenko.net/ubbthreads/images/graemlins/no.gif Marlin, i think i am right on the point that in any given year ,any capital gain or loss can only be applied to that tax year and not carried over,unless it is a depreciation loss. That is the reason everyone wants to make any gains on Jan 1[so the tax on the gain wont have to be paid for 16 months] ,and get any losses in by DEC 31 to offset any gains that year..Im not a tax lawyer but i did stay at a Holiday Inn express last night.

Re: Capital Gains on muscle car (state of PA)
 

Leave that for another thread.