Re: [Chrysler300] Selling a 300

[Edward Mills Antique Tractors <millserat@xxxxxxxxxxxxx>]

Not sure about it, but I was told threshold had gone down to $4000 - 
anyone ???

On 4/23/2013 1:52 PM, Terry Mctaggart wrote:
>
> 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@xxxxxxxxxxxxx <mailto:tdcox%40bellsouth.net>>
> To: cpaviper@xxxxxxxxxxx <mailto:cpaviper%40comcast.net>
> Cc: jerrylindsay300h@xxxxxxxxxxxxxxx 
> <mailto:jerrylindsay300h%40tampabay.rr.com>; 'Listserver Chrysler 
> Club' <chrysler300@xxxxxxxxxxxxxxx 
> <mailto:chrysler300%40yahoogroups.com>>; 'Terry Mctaggart' 
> <terrymct999@xxxxxxxxx <mailto:terrymct999%40yahoo.com>>
> 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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> 



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