Hot Rods I.R.S./Bank question

Come on, wouldn't you feel bad if you didn't have to report income from a hobby vehicle sale and then consequently somebody didn't get their insurance subsidized?

 

The IRS wants it's share of actual profits made on merchandise. Selling a car for $30,000 in which you may have invested $40,000, is not a taxable event....providing you have records to support the claimed investment and accurate documentation of the proceeds received.

Money received is not automatically subject to income taxes.......it depends on for what the money was received. Labor = income = reportable. Merchandise = depends.....did you 'profit' or break even or lose?

Last I knew, The Feds required the bank to keep records, not necessarily report, cash in or out at $10,000 or more. However, a local bank has a policy to do the records thing at only $3,000.

I sometimes withdraw or deposit cash in the 'records keeping' amounts and have never, ever had a question from the IRS or any other agency. What I have had, several times, and so have several of my friends, is a 'demand' for more sales tax on an old car purchased. That occured when the armchair experts at the Illinois Department of Revenue looked at the latest Barret Jackson results and thought we MUST have under reported the purchase price. Usually a few photos and a terse letter makes that go away.

Ray

 

Uh oh, this thread is starting to make a wrong turn at the fork in the road.......

 

In bank practice, an amount of $9999 is a suspicious amount and will be reported whereas $10,000 will not.

 

Don, I am here to help. Have your friend write the check out to me and I will hold on to it for a brief time till hell freezes over.
Then I will send out 4 payments in Monopoly money once a week for a month. This way its all on me. Please send check to P.O. Box 1234 Cancun Mexico and Make it out to C.O. Bearer, my given name. Your reading glasses are still broken, right? Your pal Phil

or I would just do this:

 

google "US bail in legislation" and seriously ask yourself WTF you want to put large sums in the bank for in the first place...

 

You're probably right. I know in Maryland (where Lothiandon lives) you can sell 3 cars per year before you are curb stoning and need a dealer's lic., can a person fix up and sell a couple cars per year as a small business venture and qualify as SE? A good question for a cpa.

Anything more than $400 in profit, the you must pay SE tax, I know that much. Like the rules about sub contractors vs employees, there are standard questions regarding hobby income that aren't 100% subjective, a lot of people I know have legit 2nd incomes like this, but again a cpa is better to advise, yes. Anyone that would do anything I suggest without consulting an expert 1st is completely nuts.

The one thing I wouldn't do is sell a car for serious $$ and not get my ducks lined up for the IRS.

 

Guys and Gals:
Instead of all this talk about what people think, how about research from sources. It's really pretty simple, if you move $10,000 or more in cash in one day, the bank has to report it. It has no fees, taxes, or any other ramifications, unless of course you are a money-launderer.


FinCEN Form 112 (formerly Form 104) Currency Transaction Report (CTR): A CTR must be filed for each deposit, withdrawal, exchange of currency, or other payment or transfer, by, through or to a financial institution, which involves a transaction in currency of more than $10,000. Multiple currency transactions must be treated as a single transaction if the financial institution has knowledge that: (a) they are conducted by or on behalf of the same person; and, (b) they result in cash received or disbursed by the financial institution of more than $10,000.

 

Buy with cash sell for cash. Cash is king. Government wants all your/my money and the more people stop buying and selling with cash and use banks and computers the more taxes they get. Only a matter of time that all of our hidden 100 bills will only be good to wipe our ass'es with. Soon cash will be exempt and you will have to use electronic payments and receive money electronically. Then the government wins everytime.

 

Capital gains on a car hmmmm?

Cost basis minus sale price right?

How much does it cost to hunt 5 square miles of a swap meet looking for parts?
How many times did you go?

What does it cost to research a specific need or problem for hours/days ?

What does it cost to build networks of contacts to get it done?

What does it cost when you get burnt out and project stalls? Or waiting for funds to gather to proceed?

What does it cost to get a ribbing from you're wife ?


Guess it's always just a loosing non taxable event.


Buying something for 5000 and selling it for 10,000 with 5000 capital gains happens in the stock market, not the garage.

 

I guess I'll have to claim the fortune I'm gonna make to the IRS when that Nigerian prince's check clears....Any day now.

 

I think we need to start putting are money in jars and dig holes in the back yard...I called a few banks around my area it takes 3- days for them to have $30K cash for you to pick up no problem... Wish I had $30K.... HAHA

 

All banks and financial institutions file Currency Transaction Reports (CTR's), by law, with the IRS for all deposits and disbursements over $10,000. There is routinely 100% compliance with these large businesses, so the IRS spends little to now time following up on these submissions, unless they are looking at a specific party.
Having said that, taking a 20k transaction, and making two transactions of less than 10k to avoid the CTR, WILL get you in trouble, even arrested.
Cash is king, but do it the right way.

Sent from my SM-T377V using The H.A.M.B. mobile app

 

The last car I sold had 4 engines in it. I have the receipts to prove it.

 

Hobby expenses, if documented, will offset hobby income for the IRS. So, save your receipts. I don't know if expenses like mileage and postage/shipping count for a hobby like they do for a regular small business.

I'm not a tax expert though.

 

Taxes are the price we pay for living in a civilized society.

 

And where might that have been?
Always heard the 10k mark set off the bells and whistles.....

 

Cars are another thing.
Once, ok fine.
Every time it changes hands ? BS for sure.

Improve it and sell it for more ? Wellll now we got a problem don't we? That's a big ass 3 scoop double dip of BS.
Y'all figure it out if you want.

 

Isn't the hoodlum/hot rod thing/car-parts stash supposed to be INVISIBLE from the wife/bank/IRS anyways?
If your buddies with Ben Franklin and friends, well........
Not saying that's always the case, and no one is ever packing straight away loot, but- I know we're all honest law abiding citizens here, and we all play by the rules........If you didn't report your sales/purchases, you would be breaking the law......LOL! Oh ya- BTW- 2+ mil in meth about 2 miles from home here= Largest seizure ever...... Coulda funded my hot rod fix forever....... STAY under the radar!

 

Tin foil stocks are skyrocketing.
If this thread ain't POLITICS I don't know what is.
Is the HAMB going downhill?

 

They've got socks too! ?? !
I just got a new hat

 

3 stars for the "Frank Booth" Blue Velvet reference. I salute you.

Heineken? $&@" that foreign shit! Pabst Blue Ribbon!

 

My Dad operated for many a year doing cash or barter only. He had a bank account for the SS direct deposit. The day after it posted he would withdraw it. He only left enough money in the acct. to keep it active. He bought, sold, traded and built cars for several decades this way. His way of thinking was, if there is no paper trail there is no proof. It worked for him. I don't think it would work for me. I'm too lazy for that. I did find a small amount of cash in his house after he passed away. He had just withdrawn his SS money the day before.

 

Roads don't get paved, kids don't get schools and our military doesn't get funded if you don't pay taxes. I don't like taxes any more than the next guy, and I can't say I have ALWAYS paid everything in the past 67 years, but one thing I have learned in business-don't get cute with the IRS. Big guy always wins. Take advantage of any breaks, consult a good tax man and pay up.

 

Oh this thread's going down faster than the comet that killed the dinosaurs. I can almost feel the moderator right now clacking away to circular file it. May as well have some fun.

You put an IRS agent in a closet with a bowling ball and a pig, will he first try to &@@" the pig or break the bowling ball?

 

I'll chime in since this is what I do during the day when I'm not playing with cars. Any transaction where more than $10k is moved (deposited or drawn) must be reported on a SAR (Suspicious Activity Report). As many have said it is a counter terrorism and anti money laundering maneuver in conjunction with the IRS, FDIC, Federal Reserve, NCUA and others. Banks are required to report not only those transaction in excess of $10k but also any attempt that the bank feels is being made to circumvent the rules like depositing smaller amounts of money several times rather then one large deposit. Trust me, if you can think of it, we already have safeguards in place.

If you sell a car, deposit the funds. The bank will fill out the SAR, no big deal...unless you are a terrorist or laundering funds for a drug syndicate . If you sell the car for a profit (well done) remember to write all of your expenses against the sales price. I keep a folder on every car including the original sales bill, parts, repairs, paint, tows, insurance, gas, etc. Can't write off your labor unless it is your trade and even then you risk audit. Save your receipts in case of audit. My CPA told me three important rules to live by; "never bitch about paying taxes on a gain" , "never mess with the IRS" and "the way to remember how to spell the word "theirs" is remember "THE IRS" (sooner or later they always get THEIRS) . Bandit 10-10 on the side good buddies!

 

Quick story. A local car pal who sells at an area monster 2016 Missouri swap meet didn't send his 1099 "special events" tax form in to Missouri Dept of revenue by certified mail. It got lost in the mail. He wasn't able to attend the event , due to his wife's illness. He got a fine totaling over 5,800 bucks. Finally it got sorted out but wow! I've always sent in my mail certified & now will certify mail for sure. I've always paid taxes on stuff legally even if it's old junk, etc . Although it greatly chaps me that a wonderful once simple swap meet has grown into a now a tax revenue target. I too wasn't able to attend last year as a vendor, due to an employee shortage & although I'd bought spaces, yet I still sent my detailed 1099 in too. It's never gonna be simple in today's over complicated paper trail world. But better to play by the rules. It gives me the right to gripe about paying taxes on something old rusty & well used up & that's my choice to sell it knowing that tax has already been paid on it when it was new. Pay up and keep all your records up to snuff. Also in many recent years, re titled older cars in Missouri now have a tearoff form for the seller to send in within a few days that must match price the buyer paid to syncronize the amounts so the tax can be collected. Flux

 

I recall many years back, at the Portland swap meet, it was "abuzz" with rumors of the big guy trying to horn in on swap meet transactions.............yea, right! They tried scaring us with another one for years...........the metric system is coming, the metric system is coming.

Edit
Flux, we were on the same wavelength apparently.

 

It wasn't me Doug! I mean I am a big guy but I'm not THE big guy, I cant even afford to be one of his elves.

 

...............Sadly, the initial questions had nothing to do with politics.