auto sale

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Neil Bardsley
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Re: auto sale

#16 Post by Neil Bardsley »

Wow a tax which us communists in Europe didn't have! No caps gains tax on cars in the UK :)

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Paul Ahnell
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Re: auto sale

#17 Post by Paul Ahnell »

I learned long ago: If you can't stand the answer, don't ask the question.
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Vic Skirmants
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Re: auto sale

#18 Post by Vic Skirmants »

Only problem with paying someone else to raise your "investment" cost: Whatever you pay out, will not be comparable to any future deduction.
Don't bother playing games.

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Adam Wright
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Re: auto sale

#19 Post by Adam Wright »

My only advice with taxes is have a really good accountant, which usually aren't cheap, and take his advice. But don't play games with taxes, it isn't worth the risk.
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C J Murray
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Re: auto sale

#20 Post by C J Murray »

Hi Ron,
Sorry to say that you are way "left" on this one. Government, who we will call "G", would tax you at a rate of 100% and reward you with a roach infested apartment in the projects if they could get away with it. Jack has a big problem because his transaction will be large and visible. Every day a zillion Mustangs change hands and G doesn't have a clue. No individual claims $3k cap gains on their Mustang sale but Jack gets a total screwing. When Jack bought that pile of scrap many decades ago he was just too dumb to realize his mistake, he was not entering into an intended fiduciary windfall. The fact that Jack turned out to be a genius doesn't mean that G should get substantially more than 1/5 of the money. Remember all his sweat equity that he can not credit to the "cost of goods sold".

Meanwhile, millions of people go to swap meets and buy and sell guns, antique furniture, coins, art, and other collectibles and G has no idea what private individuals have made or lost on those transactions. Cars and real estate have title and usually involve more dollars so G can confiscate your money with ease. G is lazy so easy is what they like and going to an auto auction is easy. The differences in how G enforces the tax laws is fundamentally unfair and very disturbing.

What if you buy a shiny 356 for $60k, discover that under the shiny paint is Bondo and rust, pay Willhoit $200k to fix it, then sell it for $125k? Does G send you 20% of your loss? If that loss is allowed to be deducted from other cap gains, I don't know, is the average person able to use that? Exactly where is the fairness?

Car dealers engaged in buying and selling many vehicles pay tax on their business activities. They should because making money is their only goal. They are not engaged in a hobby. They don't hold vehicles for years for their pleasure. They don't pay for years of maintenance and insurance. They have no problem deducting a loss on a car from the earnings made on other cars. They also deduct the expense of repairs made in their own shop.

Neil, in low tax England what is the difference in buying a classic from your neighbor as opposed to buying that same car from America?
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C J Murray
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Re: auto sale

#21 Post by C J Murray »

PaulAhnell wrote:I learned long ago: If you can't stand the answer, don't ask the question.
Agree. Ignorance is bliss.
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George Walling
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Re: auto sale

#22 Post by George Walling »

If and when I decide to pass the speedster to another care taker I'm going to talk to a finance advisor but thinking might sell it for cash money or sell it by check or what ever at a price to help off set the taxes. and give the new owner a better price rather than the G man. I would think this maybe a option but will have to talk to a tax advisor to see what the risk is and if it is even a option. the only thing that might cloud this idea is when the title is transferred don't know how close the G man watches them. and of course the money would go in my gun safe so no banking tracking available. Just some thing I've been thinking about so see what the finance advisor says
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Adam Wright
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Re: auto sale

#23 Post by Adam Wright »

George Walling wrote:and of course the money would go in my gun safe so no banking tracking available.
I hope you have a big safe, Speedster money gets big fast. This is the pile in 100's that it took to buy this 55. Unsurprisingly, many of the people I buy cars from demand cash, and it gets large fast.
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C J Murray
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Re: auto sale

#24 Post by C J Murray »

Any actual effort to hide the "profit" will be harder to explain than just selling it and waiting to see what happens. The problem is that you know the income should be claimed so you are making a conscious decision to defraud the fine G man. It's better to be a dope. What you don't know, you don't know. Gee, sure I will pay the tax. I had no idea!

Either way you should try to get the highest price for your car because "only" 20% of a discount is saved in tax. 80% is on you.

You should read this article from Forbes about capital gains taxes and a proposal from the Trump administration that would be very helpful to Jack and George who have owned their cars for a very long time. This would help the fairness a little...

https://www.forbes.com/sites/kellyphill ... e4c70f25e1
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C J Murray
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Re: auto sale

#25 Post by C J Murray »

Adam Wright wrote:
George Walling wrote:and of course the money would go in my gun safe so no banking tracking available.
I hope you have a big safe, Speedster money gets big fast. This is the pile in 100's that it took to buy this 55. Unsurprisingly, many of the people I buy cars from demand cash, and it gets large fast.

That isn't really a great idea. The buyer has to state the real acquisition price or pay all the capital gains that the seller owes. The seller can understate the sale price but the buyer can't without incurring an income tax bill and if the buyer has an IRS audit the trail will lead right back to the seller. The bad part is that the hiding of the cash will prove intent to defraud. The lazy G man may not find out but if he does you have a big problem as the seller. There are ways that the buyer could gain by paying cash if they are engaged in activities that generate "hidden" cash but then everybody is in trouble, if caught.

All you guys claim the actual price paid when you pay sales tax on a privately bought used car, right? Sure you do.
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Doug McDonnell
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Re: auto sale

#26 Post by Doug McDonnell »

CJ You are assuming that the proposed change in Capital Gains tax would include collectibles.
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Jack Walter
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Re: auto sale

#27 Post by Jack Walter »

Doug McDonnell wrote:CJ You are assuming that the proposed change in Capital Gains tax would include collectibles.
Automobiles are NOT collectibles according to the government - which is a good thing because collectibles like art are taxed at 28% in capital gains.
Cars are taxed at only 20% (lucky us...)

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C J Murray
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Re: auto sale

#28 Post by C J Murray »

The article says this...
If you hold a capital asset for one year or less and then sell or otherwise dispose of it, your capital gain is considered short-term. Short-term gains are generally taxed at your ordinary income tax rate (you can check the 2018 tax rates here).
If you hold a capital asset for more than one year before you get rid of it, your capital gain is called long-term. Long-term gains are subject to more favorable rates. For 2018, the highest tax rate on a net long-term capital gain is 20%.
'57 Speedster
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C J Murray
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Re: auto sale

#29 Post by C J Murray »

You all need to read this. Basically the best way to avoid taxes is to die. Our government, R or D, is a smoke and mirrors organization. When a plan is this complicated you can be certain that you are being played for a sucker.

https://www.sportscarmarket.com/columns ... collectors
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Wes Bender
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Re: auto sale

#30 Post by Wes Bender »

If you got paid for doing all the work, it would be taxable income anyway and you would owe tax at a higher rate. I've sold a few cars that I've restored for myself. Did I report the income as a taxable gain. A "qualified" yes. It depended upon whether the party that received the car would, at some point, report what they paid me for it. I don't need the tax man coming around and asking why I didn't report the income. I'm with Ron on this one. If you made a decent profit, you can well afford to pay the capital gains that you got. Do I like it? No, but that's the law.

With regard to expenses, you can deduct everything that you have receipts for, except routine maintenance.
Some days it's just not worth chewing through the restraints.....

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