Re: [Chrysler300] Selling a 300
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Re: [Chrysler300] Selling a 300
- From: pffkllc@xxxxxxx
- Date: Tue, 23 Apr 2013 15:32:41 -0400 (EDT)
Yes the state will in fact ask the purchase price for purposes of assessing
sales tax, but I have never heard of a state using that information to
assess an income tax. If your neighbor showed them the check, they should
have had to settle for the tax on what he actually paid.
Pete
In a message dated 4/23/2013 3:30:15 P.M. Eastern Daylight Time,
awrdoc@xxxxxxxxx writes:
Hi Pete,
For a lawyer, you make a lot of sense 😃 Not sure if the smiley face
shows up on everyone's e-mail.
I thought the real issue was how much tax is paid to the state. A 1961
Chrysler may not sound any bells but my state constantly monitors the amount
that you pay tax on when titling a car.
Sold my neighbor a used BMW and they came after him for more tax even
though he declared what he paid me for it.
Tony
Sent from Yahoo! Mail for iPhone
____________________________________
From: pffkllc@xxxxxxx <pffkllc@xxxxxxx>;
To: <olson77@xxxxxxxxxxxxx>; <terrymct999@xxxxxxxxx>;
Cc: <Chrysler300@xxxxxxxxxxxxxxx>;
Subject: Re: [Chrysler300] Selling a 300
Sent: Tue, Apr 23, 2013 7:14:52 PM
Yanno,
I may be a bit naive here - or just out of the loop but, aside from
cars selling in the hundreds of thousands, people sell, trade in, and
exchange cars all over the place without ever saying a word to IRS and, to
my
knowledge, IRS seldom, if ever, asks. Does it matter if you trade in your
car
for more than its worth, or if the local dealer is paying $5,500.00 for
anything you can drive or tow in, if you buy a new car? Are you really
going
to file and tell IRS "I may have received more than the car was worth and
thereby received income?"
Look at your local car trader magazine and you will probably see 100
or more cars which will sell without anyone ever asking, regardless of the
price. If I sold my G coupe for $65,000.00 would I have to file a form
telling IRS my purchase price plus what I put into the car to get it where
it
is, just to show them that I didn't make a profit? The answer is that I
would sell it and not say a word and, if they asked, I could then show
them
that lost money on it, but I'm certainly not going to be the one to bring
the
matter up. Practicality should be a consideration, even in the midst of
IRS regulations. Just my opinion.
Regards,
Pete Fitch
In a message dated 4/23/2013 2:57:59 P.M. Eastern Daylight Time,
_olson77@xxxxxxxxxxxxxx (javascript:return) writes:
Good to know Terry. Thanks for the FYI, Jerry
--- On Tue, 4/23/13, Terry Mctaggart <__terrymct999@xxxxxxxxxx
(javascript:return) _
(mailto:_terrymct999@xxxxxxxxxx (javascript:return) ) > wrote:
From: Terry Mctaggart <__terrymct999@xxxxxxxxxx (javascript:return) _
(mailto:_terrymct999@xxxxxxxxxx (javascript:return) ) >
Subject: Re: [Chrysler300] Selling a 300
To: "Tom" <__tdcox@xxxxxxxxxxxxxx (javascript:return) _
(mailto:_tdcox@xxxxxxxxxxxxxx (javascript:return) ) >,
"__cpaviper@xxxxxxxxxxxx (javascript:return) _
(mailto:_cpaviper@xxxxxxxxxxxx (javascript:return) ) " <__cpaviper@xxxxxxxxxxxx (javascript:return) _
(mailto:_cpaviper@xxxxxxxxxxxx (javascript:return) ) >
Cc: "__jerrylindsay300h@xxxxxxxxxxxxxxxx (javascript:return) _
(mailto:_jerrylindsay300h@xxxxxxxxxxxxxxxx (javascript:return) ) "
<__jerrylindsay300h@xxxxxxxxxxxxxxxx (javascript:return) _
(mailto:_jerrylindsay300h@xxxxxxxxxxxxxxxx (javascript:return) ) >,
"'Listserver Chrysler Club'" <__chrysler300@xxxxxxxxxxxxxxxx (javascript:return) _
(mailto:_chrysler300@xxxxxxxxxxxxxxxx (javascript:return) ) >
Date: Tuesday, April 23, 2013, 2:52 PM
I just returned from my dentist who is a car guy and a racer. He also
used to have a side business of buying and selling exotics. He told me
that
the 10K thing (where the bank must notify the IRS of deposits greater than
$10K) is only for cash deposits. He said that check deposits of any size
are OK. Any comments? Terry McTaggart
________________________________
From: Tom <__tdcox@xxxxxxxxxxxxxx (javascript:return) _
(mailto:_tdcox@xxxxxxxxxxxxxx (javascript:return) ) >
To: __cpaviper@xxxxxxxxxxxx (javascript:return) _
(mailto:_cpaviper@xxxxxxxxxxxx (javascript:return) )
Cc: __jerrylindsay300h@xxxxxxxxxxxxxxxx (javascript:return) _
(mailto:_jerrylindsay300h@xxxxxxxxxxxxxxxx (javascript:return) ) ;
'Listserver Chrysler Club' <__chrysler300@xxxxxxxxxxxxxxxx (javascript:return) _
(mailto:_chrysler300@xxxxxxxxxxxxxxxx (javascript:return) ) >; 'Terry
Mctaggart' <__terrymct999@xxxxxxxxxx (javascript:return) _
(mailto:_terrymct999@xxxxxxxxxx (javascript:return) ) >
Sent: Tuesday, April 23, 2013 8:49 AM
Subject: RE: [Chrysler300] Selling a 300
Thanks to Noel for a far more comprehensive discussion of the issues
surrounding income and losses of collector cars. Tax return treatments are
complex and fraught with pitfalls. Anyone that plans to sell a valuable
asset
should consult with their tax professional prior to embarking on the
transaction. The family income level, the purpose of owning the vehicle
and may
other factors affect the tax treatment of a sale as outlined below by
Noel.
Buyer and seller beware!!
From: mailto:cpaviper%40comcast.net [mailto:mailto:cpaviper%40comcast.net]
Sent: Monday, April 22, 2013 10:23 PM
To: Tom
Cc: mailto:jerrylindsay300h%40tampabay.rr.com; Listserver Chrysler Club;
Terry Mctaggart
Subject: Re: [Chrysler300] Selling a 300
Hello Group,
Adding to what Tom has laid out - the U.S. tax regulations provide for 3
classifications from which an owner is considered - Dealer, Investor,
Collector - and different income tax outcomes result under each of these.
State
and local sales/use tax issues are outside this income tax discussion.
Dealer - someone engaged in the trade or business of selling, primarily to
customers. Court cases further define Dealer status. The U.S. Supreme
Court stated the taxpayer must be involved in the activity with continuity
and
regularity, and the primary purpose must be for income or profit. Dealers
are subject to ordinary income tax rates on their taxable income; they
also
benefit from their net business losses.
Investor - buys and sells primarily for investment, rather than for
personal use and enjoyment, or as a trade or business. Investors can
deduct their
investment expenses as an other itemized deduction subject to income
limitation. Investors can also report capital loss on sale. The courts
have
examined various factors (Dealer vs. Investor), including -
* purpose for which the property was acquired
* purpose for which it was held
* frequency, continuity and substantiality of sales
* duration of ownership
* use of proceeds from sale of the property
* business of the taxpayer
* time and effort devoted to sales activities re the asset in question, by
developing or improving that asset, soliciting customers, and advertising
Indicators of Investment -
* investment purpose was of primary importance
* collector must intend to hold the [300] for investment (collector's
financial position, investment history, believes [300] is an inflation
hedge,
and whether collector has made personal declarations of investment purpose
and intention)
* consulting with experts on purchases
* reading pertinent publications
* participating in collection-related activities
* devoting time to the collection
* making an effort to display the collection publicly, so as to enhance
its value
* developing expertise about the collection
* keeping business-like records and using a business-like method of
accounting for the collection
Collector - buys and sells primarily for personal pleasure; is neither
dealer nor investor. Ordinarily may not deduct expenses or losses. The
U.S.
long-term capital gain rate for collectibles is 28%. A Collector's
expenses
may be deductible as an other itemized deduction, up to the amount of
income
derived from that activity.
Tom also mentions the possibility of a tax-deferred (Section 1031)
exchange transaction, that's available to Dealers and to Investors, but
not to
Collectors. There's a clear incentive for this purpose to report the
transaction as an Investor. It's important to note that the sales proceeds
must be
fully deposited into a tax-deferred escrow account, to be reinvested in
the
replacement vehicle, in addition to several other technical requirements
that must be fulfilled.
There's yet another type of exchange - "Involuntary Conversion" (Section
1033) exchange in casualty loss circumstances such as flood, fire or theft
damage, and reinvestment of insurance proceeds received. Many great cars
were badly damaged here in the past week with the Chicago area flooding
we've
had in the past few days. In this type of exchange, the owner can receive
the cash proceeds, and has until the end of the 2nd tax year following the
casualty loss year to reinvest these proceeds to defer a taxable gain.
And, note - collectibles are not allowed in self-directed retirement -
IRA, SEP - accounts.
Documentation is key! Build your story around your tax position. These
comments just begin to touch upon the issues that come into play, and
there
are significant gray areas within which you can form your own
interpretations.
Noel Hastalis
Burr Ridge, IL
F coupe
_____
From: "Tom" <mailto:tdcox%40bellsouth.net>
To: mailto:jerrylindsay300h%40tampabay.rr.com, "Listserver Chrysler Club"
<mailto:chrysler300%40yahoogroups.com>, "Terry Mctaggart"
<mailto:terrymct999%40yahoo.com>
Sent: Monday, April 22, 2013 10:02:48 AM
Subject: [Chrysler300] Selling a 300
Hey Terry and Jerry,
Generally, a car is considered a personal asset (not a business asset) and
if you sell it for more than you have invested in it, it is taxable
income. On the flip side, losing money on the same car is not deductible.
This
isn't fair but it is the tax law.
The investment aspect would include what you paid for it and any
improvements (similar to a house) such as repaint, engine rebuild, etc.
but would
not include normal maintenance (tune-ups, oil changes, etc.). If you
inherited the car, the initial value of the car is the Fair Market Value
on the
date of death of the previous owner.
The good news is that it would be subject to capital gains rates, assuming
you owned it for more than a year.
One other alternative that is somewhat tricky would be a tax-free
exchange. This is where you trade your car for another and as long as you
don't
receive any cash on the trade, the transaction would not generate any
taxes
due. You would, however, have to report the trade on your tax return. For
example, if you traded a 300C for a 300F and traded even, there would be
no
tax due. So simply trade your ride for something else you have always
wanted!!
If you have any specific questions, let me know.
Tom Cox
From: mailto:Chrysler300%40yahoogroups.com
<mailto:Chrysler300%40yahoogroups.com>
[mailto:mailto:Chrysler300%40yahoogroups.com
<mailto:Chrysler300%40yahoogroups.com> ] On Behalf Of
mailto:jerrylindsay300h%40tampabay.rr.com
<mailto:jerrylindsay300h%40tampabay.rr.com>
Sent: Monday, April 22, 2013 10:07 AM
To: Listserver Chrysler Club; Terry Mctaggart
Subject: Re: [Chrysler300] Selling a 300
Great question Terry, something to look at and consider. I plan on egtting
rid of some of my 62's this year. My age and I can't do the things I used
to do and can't afford to pay others.
Jerry Lindsay
---- Terry Mctaggart <mailto:terrymct999%40yahoo.com
<mailto:terrymct999%40yahoo.com> <mailto:terrymct999%40yahoo.com> > wrote:
> Looking at the asking and sales prices of 300s, some of our cars are
beginning to be worth real money. Does anybody out there have any
knowledge /
experience on how to handle the tax issues, both federal (capital gains)
and local (sales) issues of such an exchange? Terry McTaggart
>
> [Non-text portions of this message have been removed]
>
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