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Auction 83: 1965 Bell System Picturephone

Started by AE_Collector, January 28, 2013, 12:01:22 AM

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AE_Collector

I was thinking about your tax situation the other day and meant to mention it here. Didn't know that it was $20K though. If $19,999 Maureen can't sell another phone (or anything on ebaY) for the rest of the year!

Terry

Doug Rose

Terry....That would be correct, she would be one and done. For Mo, it is a delightful dilemma though....Doug
Kidphone

MagicMo

Quote from: Doug Rose on January 31, 2013, 07:35:08 PM
Terry....That would be correct, she would be one and done. For Mo, it is a delightful dilemma though....Doug

Would my husband be able to sell? I'm not all that concerned about it anyway. I can wait until next year for all the other stuff.
Mo
Practice Kindness :)

Phonesrfun

Quote from: MagicMo on January 31, 2013, 08:06:35 PM
Quote from: Doug Rose on January 31, 2013, 07:35:08 PM
Terry....That would be correct, she would be one and done. For Mo, it is a delightful dilemma though....Doug

Would my husband be able to sell? I'm not all that concerned about it anyway. I can wait until next year for all the other stuff.
Mo

The tax issues are probably complex.  Especially since the items you are now and further contemplating selling were seemingly acquired through your father's estate.  There may be part of the basis in the property that is exempt from taxation if you turn around and sell it.  I would talk to a tax accountant, and that person might refer you to a family law attorney.  As far as your husband selling, it may depend on whether you file jointly or separately.  Yet another reason to consult with someone who really knows.  Given the size of the potential from this and other potential sales, a few bucks invested with a tax professional would probably save you some heart-aches in the long run.
-Bill G

DavePEI

#49
$12,100.00 - a bid by f***n, automatic recovery by m***c, another bid by f***n and another automatic recovery by m***c! Where will it end? Still two more days+ to go. This one's going to go down to the wire, folks!

Dave
The Telephone Museum of Prince Edward Island:
http://www.islandregister.com/phones/museum.html
Free Admission - Call (902) 651-2762 to arrange a visit!
C*NET 1-651-0001

paul-f

Quote from: Doug Rose on January 31, 2013, 05:41:19 PM

Just to let you know, anything over 20K it becomes a taxable income on the whole amount.


Doug,  Isn't any profit a taxable event? You still need to delcare a cost basis to establish taxable income for the IRS. Ebay only reports sellers grossing over $20K to the IRS, making it more difficult to "hide" the income.

In this case, I believe Bill is right.  When we settled several family estates we were told to sell as much as possible within the estate and to distribute the remaining assets at "high estimate" levels to establish a high cost basis for the heirs.  We kept the estate open for several years and sold most of the valuable items.

The taxes the estate paid were a lot less than any of us would have paid individually.  After the economy turned south, we were able to sell many of the remianing items for little or no gain.

Good guidance is quite helpful.
Visit: paul-f.com         WE  500  Design_Line

.

Greg G.

If I'm not mistaken, the Picturephone will be the highest dollar amount we've done since the Auction Contests started.  The next highest one was a Viaduct Candlestick:

= Contest Seventy Six =
Viaduct Candlestick
Kleenax $5800.00 (-$1529.99)
Ended 10/30/2012 at $7329.99

Although there was some mention of a 19th century phone that was found in the trash and sold to a museum for something like $18k, but we didn't do a contest on it.  I don't have time to find it right now.
The idea that a four-year degree is the only path to worthwhile knowledge is insane.
- Mike Row
e

DavePEI

#52
Another Bid and Recovery...

1***1 bid $12,200.00, and m***c recovered with a bid of $12,300.00!

Hurry up and bid - as of today, the Picturephone winner gets $100 in eBay Bucks! What a bargain! :D

Dave
The Telephone Museum of Prince Edward Island:
http://www.islandregister.com/phones/museum.html
Free Admission - Call (902) 651-2762 to arrange a visit!
C*NET 1-651-0001

AE_Collector

Quote from: Brinybay on February 01, 2013, 12:49:06 PM
Although there was some mention of a 19th century phone that was found in the trash and sold to a museum for something like $18k, but we didn't do a contest on it.  I don't have time to find it right now.

http://www.classicrotaryphones.com/forum/index.php?topic=4642.0

Terry

AE_Collector

Quote from: DavePEI on February 01, 2013, 01:52:04 PM
the Picturephone winner gets $100 in eBay Bucks!
Dave

Yes ebaY Bucks top out at $100 unfortunately....

Terry

Phonesrfun

#55
Quote from: Doug Rose on January 31, 2013, 05:41:19 PM

Just to let you know, anything over 20K it becomes a taxable income on the whole amount.


Let's be careful here on "taxable".

The 1099 only reports what you sold the item for, and of course, most things that are sold have a deductible cost.  Anyone who sells things is allowed to deduct the cost of an item, and taxes are paid on the amount that the selling price exceeds the cost.  In other words, if you sold something for $100.00 and your cost was $200.00, there is no profit, and no tax to pay.  Just because you get a 1099 that says you sold $20,000 worth of stuff does not mean you show that entire amount without deducting the item's costs, and any other direct costs such as packaging it for sale, advertising, etc.

Your original cost in an item you sell is called its tax "Basis".  Taxable sales activity is the amount sold less its basis, which equals Profit.  Obviouysly, if you find something lying on the street and turn around and sell it, you have no basis and no direct selling costs, then the entire amount of that sale is taxable.

I am not current on the rules that come into place that establish basis on items inherited.  Seems to me that there are or were years ago rules that allow the items coming to an heir to retain their original basis.  These things need to be worked out with someone who knows the rules and knows how to properly document the transaction to avoid getting in trouble.  That's why I say that since this auction is gaining so much momentum, it would be worth Maureen's time to seek out someone who can answer these questions professionally for her further auctions.

Technically, any profit, not just over $20k is taxable.  The IRS only chose $20k to cherry pick the high dollar sellers when they put in the rules of reporting last year.

-Bill G

Doug Rose

Bill...let me rephrase taxable...if you go over 20K as of last December you will get a W-TF form from the IRS from paypal monies that you received from Paypal. I got this last February and was blindsided by it..... and yes I said What the F*ck. I never had to pay for eBay profits before as George W said it was free enterprise. This is not political, this is what was the law before last year, a very late in the game change.  It includes all monies that you received from Paypal. Yes...shipping on your W-TF is included and you have to write it off, as well as the two eBay fees for selling. I know you are an accountant, so I am just recapping. If Mo goes over 40K, Paypal has her SS number and next year she will get the form. I was just trying to make her aware of taxes. This is what I consider taxable, maybe the wrong terminology.

Paul...the answer is No, I never paid taxes on eBay until last year. I was not breaking the law, it was the law that you did not have too.....Doug
Kidphone

DavePEI

New Totals:

Now $13,050.88 - f***n bid $13,000 and m***c countered with $13,050.88

Yay Maureen!
The Telephone Museum of Prince Edward Island:
http://www.islandregister.com/phones/museum.html
Free Admission - Call (902) 651-2762 to arrange a visit!
C*NET 1-651-0001

zapper

I'm confused with Doug's post regarding the IRS. Reading the explanation on Pay Pal you need 200 transactions AND $20,00.00 in sales to receive a 1099. Both must be met not one or the other.
My guess for the Picturephone is $22,799.00 and the winning bidder will be the buyer from Canada.
Zapper

DavePEI

Quote from: zapper on February 01, 2013, 06:22:12 PM
My guess for the Picturephone is $22,799.00 and the winning bidder will be the buyer from Canada.
Zapper
All the bidders so far have been from the U.S.

Dave
The Telephone Museum of Prince Edward Island:
http://www.islandregister.com/phones/museum.html
Free Admission - Call (902) 651-2762 to arrange a visit!
C*NET 1-651-0001