You report on schedule D. Here is a sample:Okay, I think I can get the tax owed with respect to capital gains once I decide how much am I required to report. My question relates to my obligation. If I sell $9999 in value of my coins, I am required to report what if anything to the IRS? And sorry to belabor but I am interested in handling this transaction legally as required not just because I can get away with it because it wasn’t reported by the coin dealer who is the buyer. Tell me as if I were 12 years old.
Code:
Part II Long Term Capital Gains[ ] (D)[ ] (E)[X] (F) Long-term transactions not reported to you on form 1099-B(a) Description (b) Date (c) Date (d) Proceeds (e) Cost or Adjustments to gain or loss (h) Gain orof Property Acquired Sold (sales price) other basis (f) Codes (g) Amount of Adj (loss)=================================================================================================================================55 oz silver Various 08/19/20 $1,345. $1,198. C 0. $147You need to know the sell date. That can be various too if you don't sell all at once.
You need the amount of money received($1325 in my example) and you need to know the cost basis ($1198 in my example). Basis can be difficult if you don't have purchase receipts and don't know what year it was bought.
The adjustment code C is for collectible
There is no adjust amount, as code C just affects the tax table percentages used.
Gain or loss is (d) - (e) -(g) which the tax software should calculate.
In the example above, I actually had 3 entries: 55oz of silver, $40 face of 40% silver, and $4 face of 90% silver. I did this because they are priced differently per ounce so it was easier to see that the prices I listed were logical. There are no hard and fast rules for how detailed to list. You could lump it all together in one line, you could break it down by gold coin type or size, or list it by each transaction. In the end, what matters is that you capture the total gain and pay the tax. The IRS has no way to verify any of this, so unless you put numbers that just don't make sense, it would be difficult to challenge you.
The hardest part is estimating the taxes because your other income affects that. You could do a mock tax return or use a tax calculator and just consider the gold capital gain a short term capital gain. That would work unless you are already in the 31% tax bracket. Do the return or tax calculator with the gold sale and without to see what the ta difference is. That would be what you need to pay now or make sure gets covered by withholding some time during the year.
If you are in the 31% or higher bracket, then the tax owed is just 28% of the capital gains.
Statistics: Posted by suemarkp — Sun Aug 18, 2024 8:50 pm — Replies 23 — Views 2210