CTYANK2

I was referencing the "reporting" done by the financial institutions (Currency Transaction Report (CTR) and Suspicious Activity Report (SAR), NOT the "reporting" responsibility of the individual on their tax returns.

dfellinger

I just pulled out a lot more than $10,000 from investments to build a garage and deposited it into checking account and nobody said a word.

CMYC4GO

If you deposit $10,000 or more in your bank account, the IRS is notified, but they will do nothing. It takes regular deposits of $10,000 or more, for them to start giving you the evil eye.
When I worked overseas, although I was working tax free, I was still sending my paycheck home. I deposited $9999 every 30 days to keep out from under the watchful eye of Uncle Sammy, and kept the rest in an overseas bank. The magic number here, is $10K and above. If you are REALLY that paranoid about it, then just keep your deposits under 10 grand. Deposit $9999.99 and you're safe

KALAWAY

The tax man does look for his share of "profit" when you sell your house, unless it goes into another house, but not because you sold a car. I guess if you wanted to be totally honest, you COULD pay taxes on your "gain" of $2000, but you'd never pay tax on the $14000.

PRNDL

The laws on all this stuff change, and have changed and I am not sure I have seen ANY current information in this entire thread!!

Kalaway, are you sure a home seller can still roll a profit into a new home? The current law allows the first $500k capital gain for a married couple to be tax free, and The rules for bank reporting of cash transactions have also changed. Depositing a check for $10,000 would not automatically generate a report, but making numerous deposits of $9,999 would almost certainly be reported today because it is suspicious activity. A tremendous amount of responsibility for flagging suspicious transactions has been shifted to the banks. They are obligated to identify and report "suspicious activity" which can be broadly defined but typically relates to CASH transactions. The big concern is money laundering and how it can be used to hide illegal activity and finance terrorism. It is not about catching tax cheats.

edit: well, yes, it is also about catching tax cheats!

IRS currency reporting info here:

http://www.irs.gov/compliance/enforc...113003,00.html

Baytraveler

Just keep a copy of the title signed over to the new owner, a copy of the check and a signed receipt and you'll be fine. No worries.

Maggs

When the IRS calls on the phone, just yell "You want the truth?? YOU CAN't HANDLE THE TRUTH!!". Then hang up.

They'll leave you alone.

Chevy Guy

One deposit isnt going to ring any alarms. Several over 10k will. I think you will be just fine.

Old Rotor Head

72-LT1

You are required by IRS regulations to pay capital gains tax on any personal property sold at a profit, and you are not allowed to take a capital loss on personal property sold at a loss.

Is the IRS every going to question you on a 12K deposit? Maybe and maybe not, but if they do call or send a notice just write a letter and tell them you bought it for 10K and over the last 10 years you put 5K into upgrades. Maint, ins and upkeep costs do not add to basis.

They will accept your explanation, and its highly doubtfull they will ever question your answer, unless you have other tax problems.

So in short don't worry about it.

Yello95

======================================== =========
Nope...if you sell your house you can take $250,000 for you and $250,000 profit for your spouse without having to pay capital gains even if it doesn't go into another house...you can only do this if you have lived in the house for at least 3 years...then you can do it over and over...

Yello95

[QUOTE=vette7nine]You mean to tell me that if Joe Schmo sets up a lemonade stand in his driveway and sells $10,000 worth of refreshments one summer, he shouldn't worry about the tax consequences?



Do you know "Joe Schmo" and does he sell franchises for his lemonade business?

mandm1200

[QUOTE=mrjbq]Not sure about the IRS, but the DEA would check it out, if it were a cash deposit in excess of $10k
QUOTE]

Don't worry about the cash being in excess of $10k. Just make several deposits. There is a form for deposits/withdrawls the bank fills out and sends the Feds. Talk to a branch manager and find out if smaller deposits a day or two apart would negate the paper work. The less Uncle Sam knows, the better off you are.

mandm1200

There is some truth in that, but I don't think the IRS gets a 1099 form as they do in other instances. I bought a sold quite a bit of stock about 10 years ago. Due to a house fire, many of the trade records were lost. The IRS assumed I owed them close to 1/2 million dollars. All they saw was I sold a ton of stock and assumed I got them for free. After it was all said in done, they owed me several hundred dollars.

73737373

Why would anyone purposely tell the IRS that they made $2K selling a car, especially after reading the discussions above? Sounds like you have a death wish. Are ya crazy!?!?!?!

classiczx

Man, I wish I bought my cars from you... I could've told the DMV that you'll take care of the tax when I registered!

Langadorf

I'm surprised nobody here has brought up inflation. If you bought it for $12K 15 years ago, that works out to $17.85K present day money. If you sell it for $14K, you're actually taking a $3.85K loss.

Civis

I'm surprised that no one suggested running this question by an accountant.

Richard454

Only 2 years...to be Tax free-250k each/500K couple(Do NOT have to be married-but both must be single)-and must have owned the home (as your primary) for at least 2 years of the 5 year period ending on the date of sale. And the 730 days DO NOT have to be consecutive. This law was passed May 1998. Prior to that you had a one time exemption of 125K (250kcouple) IF you were over 55. If gain is over 500k -Have a lot of receipts!!!

How do I know? I'm doing this for a tax free living!!! I'm renovating the houses while taking a draw against the equity.

arklatex58

i have an idea, sell me the car for $9999.00 claim it as a loss. i'll buy you a beer, problem solved, just kidding, good luck with the delima!