IRS and auctions????
Thread Starter
Le Mans Master
Joined: Oct 2000
Posts: 6,209
Likes: 33
From: Texas-out west
IRS and auctions????
I go to a lot of auctions (dreaming..LOL). Anyway, when someone sells those cars for megabucks, does the IRS know about it, I mean does the auctioneer like KRUISE report the sale etc. or do they just broker the deal?? I assume most of the people selling make money and probably haven't kept records of the work they might have done. Thoughts on this. :cheers:
Drifting
Joined: Feb 1999
Posts: 1,260
Likes: 5
From: Brandon FL
Re: IRS and auctions???? (LT1driver)
Usually buying and selling involves sales taxes which is a state jurisdiction. Having said that, if you're buying and selling and making withdrawals and deposits that can be tracked. The IRS might question that activity if you were ever audited. I doubt the buying/selling of the cars would trigger an audit, but I you were targeted for some other reason, you're going to have to have an answer for major deposits over and above your normal income.
The only thing the auction houses are required to report to the IRS is any cash transaction over $9999.99. This was a requirement instituted a while back to keep drug dealers from laundering thier money by trading in high-line cars, boats, and homes.
The only thing the auction houses are required to report to the IRS is any cash transaction over $9999.99. This was a requirement instituted a while back to keep drug dealers from laundering thier money by trading in high-line cars, boats, and homes.
Race Director
Joined: May 2000
Posts: 12,712
Likes: 2,271
Re: IRS and auctions???? (joevette57)
To the best of my knowledge, that $10K IRS reporting threshold also
applies to ALL bank transactions, so if you draw or deposit a check
for $10K or more, the bank is required to report it. It also applies to your brokerage account if you withdraw or add more than $10K per transaction, but does not apply to purchases or sales using funds already in the account. Of course, brokers report all security sales anyway, and you have to account for them on Schedule D every year.
Don't know what the IRS position is on tracking collector car transactions,
but there are potentially a lot of capital gains liabilities generated from the sale of collector cars.
Duke
applies to ALL bank transactions, so if you draw or deposit a check
for $10K or more, the bank is required to report it. It also applies to your brokerage account if you withdraw or add more than $10K per transaction, but does not apply to purchases or sales using funds already in the account. Of course, brokers report all security sales anyway, and you have to account for them on Schedule D every year.
Don't know what the IRS position is on tracking collector car transactions,
but there are potentially a lot of capital gains liabilities generated from the sale of collector cars.
Duke
Le Mans Master
Joined: Jan 2002
Posts: 8,913
Likes: 283
Re: IRS and auctions???? (LT1driver)
[Quote]
This was a requirement instituted a while back to keep drug dealers from laundering thier money by trading in high-line cars, boats, and homes.
_______
"So they can keep an eye on what everyone is spending".
"Drug money"
The gov. hates competition.
I heard the number was lowered to $3000.00. I know for sure it was or is $10,000. My experiance with auctions is that you pay state sales tax on your purchase. Then of course the state tax you live in were you licence the car. In SD. it is 3% to register the car. Then $30.00 a year for the plates.
I have heard ;) that you can fudge on the sale price of your car and dodge the 3% initial tax. It works best if the seller is in on it as well. With the advent of the computer I am sure they will close this loophole in the future by having the seller post his sale amount, then the courthouse will use that figure to asses your taxes. This is were if both parties were in on the deal it would be almost impossible to identify.
Mark
This was a requirement instituted a while back to keep drug dealers from laundering thier money by trading in high-line cars, boats, and homes.
_______
"So they can keep an eye on what everyone is spending".
"Drug money"
The gov. hates competition.
I heard the number was lowered to $3000.00. I know for sure it was or is $10,000. My experiance with auctions is that you pay state sales tax on your purchase. Then of course the state tax you live in were you licence the car. In SD. it is 3% to register the car. Then $30.00 a year for the plates.
I have heard ;) that you can fudge on the sale price of your car and dodge the 3% initial tax. It works best if the seller is in on it as well. With the advent of the computer I am sure they will close this loophole in the future by having the seller post his sale amount, then the courthouse will use that figure to asses your taxes. This is were if both parties were in on the deal it would be almost impossible to identify.
Mark
Thread Starter
Le Mans Master
Joined: Oct 2000
Posts: 6,209
Likes: 33
From: Texas-out west
Re: IRS and auctions???? (ghostrider20)
thanks for the info. Know I know why the cars at auction are so much higher than in the magazines, state sales tax I never thought of and of course the auction house fee. Besides not having the money.... :lol: I now have another reason to stay away from them when I someday can get a midyears like I want. :D
Racer
Joined: Apr 1999
Posts: 461
Likes: 0
From: Las Vegas NV
Re: IRS and auctions???? (LT1driver)
LT1driver, I thnk you are under a misception with your last statement, the prices you see the vehicles selling for at the auctions do not include Sales tax, or a fee the auction will charge you for the privilige of buying the car. Also if you purchase from a dealer you will pay the sales tax and some extra fees. Sorry, they are going to get you coming and going. If you buy frm an individual you may still be subject to some Sales tax and of course I feel you have to be much more careful with understanding titles and being comfortable with who your doing business with.
Team Owner
Joined: Oct 2000
Posts: 38,897
Likes: 1,926
From: Washington Michigan
Re: IRS and auctions???? (Daren Schneider)
Doesn't matter how you buy it or who you buy it from - when you go to register the car and apply for title and plates at your DMV, you have to pay state sales tax there unless you've already paid it to a dealer in your home state. There's no escape.... unless you don't register the car and don't need a title or plates.
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Le Mans Master
Joined: Apr 2002
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From: Egg Harbor Township NJ
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Re: IRS and auctions???? (JohnZ)
Quote*
-when you go to register the car and apply for title and plates at your DMV, you have to pay state sales tax there.
-----------------------------------------------------------------------------------------
I always look forward to seeing those friendly Smiling faces at the DMV.
I leave dancing and singing as I skip out the door on the way to my new over taxed automobile.............
:mad
-when you go to register the car and apply for title and plates at your DMV, you have to pay state sales tax there.
-----------------------------------------------------------------------------------------
I always look forward to seeing those friendly Smiling faces at the DMV.
I leave dancing and singing as I skip out the door on the way to my new over taxed automobile.............
:mad
