Transfer of Large Amounts of Funds?

[firstgenaddict]

If you restore the car yourself do you have to claim the difference between buy and sell price as capital gains (minus expenses) What about your own labor can you only deduct it if you own a restoration shop?

Just wondering about tax implications of all this money floating around...

[Keith Tedford]

I bought our COPO Chevelle new. I guess I will just restore the car and drive it. I'll be damned if I will do all the work of restoring the car then give half the profit to the government. Capital gains tax up here is about 50 percent and they didn't lift a finger. I'm the one with the dirt in the eye, sweat, cuts and gouges. Makes the choice easy.

[Zedder]

Actually Keith, Capital gains tax is 50% of your income tax rate for a maximum of 23% if you are making 6 figures.

[Keith Tedford]

I guess that I didn't understand the information that I got. With retirement coming up the income will take a drop into safer territory. Not going to give them 23% either. Don't be surprised to see one COPO Chevelle on the roads....If I can ever get it done. Guess I'm going to be Like Albert Galdi and do it myself.

[427king]

If the car is owned for 1 year or more it is considered a long term cap gain and is subject to 2o% cap gain tax,also our state adds 5% cut,for a total of 25%. If the car is owned for less than 1 year it is considered a short term cap gain and then the income realized is not a cap gain, but rather considered regular income which can be taxed at 43% here in CT[38% highest bracket plus 5% state]. In a perfect world you should sell a short term gain in a year where you have no other income to take advantage of the lower tax brackets, i havent done the math but it would save you 5 figures in taxes in any given year if you profit by 75K for example.[Not that youd want to quit your job to save that]. Another thing is if you own the car for 10 months for example,wait the extra time for sure and save up to 18% in taxes by holding it for the year.Lastly it is a big advantage to sell a car in the beggining of the year rather than the last few months of the year.If you sell a car in Jan 2007 for example the taxes arent due until April 2009. And you have 16 months to use that tax money to invest in a cd or something. if you sell in Dec 2006,you owe the tax in 5 months instead of 16 months in the previous example just by holding out on selling by a few days or weeks

[Unreal]

Leave it to your kids...they will take possession at the value on the day of your death.

[Keith Tedford]

Perhaps we can have them back date our death certificates to 1972. Talk about a hijacked topic.

[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