Sold a 356 and used a 1031, as CPA or car owner?

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Larry Coreth
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Re: Sold a 356 and used a 1031, as CPA or car owner?

#46 Post by Larry Coreth »

tax gurus

From my limited experience in buying and selling IRS visible assets, i.e. stocks and mutual fond shares, the IRS can tax you only the gain. In order to do this you need to know the sale price and the original cost, this being the critical factor. They (IRS) have wild rules for determining this cost. Now if you purchased said asset(car) many years previously who is to say what you paid for it ? Here in NC when you title a car in your name the state wants 3% sales tax and they will use a value guide to determine that you are not cheating them. But said guide only goes back 10 some odd years., long after 356's became extinct from their view point. This was the case when I re-titled my Speedster from VA to NC, 20 years ago. So they had to believe whatever I told them.

Oh maybe you're right CJ just get buried in your 356 and leave a treasure map for someone to find later.
Larry Coreth
Roanoake Rapids, NC

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Dennis ODonnell
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Re: Sold a 356 and used a 1031, as CPA or car owner?

#47 Post by Dennis ODonnell »

Tom, private aircraft often change hands for "$1 plus OVC" where OVC is "other valuable consideration." The value of that consideration is up to the two parties to declare, not the feds to estimate or assess. Similarly, sales or use tax on a plane is determined by the value declared by the owner, not local authorities or the IRS.

I recently sold a car to a friend for a nominal $50, it could just as easily have been for $I+OVC. The sale was taxed accordingly, considerably less than its market price. As Larry said, a state's valuation guide is not comprehensive. When I bought my 356 it was taxed on my declared value and the seller (the first owner), did not declare a longterm gain although it had appreciated over forty years.

I'm curious too. Why would you declare a capital gain on a non-investment with no 1099 issued, regardless of its sale price? You're neither a collector nor a dealer, just a guy selling an old car. If the only record of the transaction is your bank's declaration of a large cash deposit, that deposit could very well have come from the coffee cans or mattresses you kept throughout your life.

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Re: Sold a 356 and used a 1031, as CPA or car owner?

#48 Post by C J Murray »

Call the IRS and ask them the questions. LOL :D
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Larry Coreth
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Re: Sold a 356 and used a 1031, as CPA or car owner?

#49 Post by Larry Coreth »

CJ,

I would but I don't like to tempt fate ! And I want to save all that good Karma for when I really need it.

However once I had to put my head into the lions mouth. A number of years ago I was offered and accepted a job in an other state by a former boss for whom had great respect. As part of the deal the company would give a lump sum for moving expenses. OK I thought. Well I started work there got an apartment as temporary living for me. After 2 months the company was acquired by another and soon my boss, the plant mgr. was out of job. The new plant mgr was not interested in keeping any of the "old" team so I was history and went back to NC. At the end of that year and tax time came around I had this lump sum for moving expenses which was never used, on which I thought I might have to pay taxes as income. I called the IRS and the guy and I discussed the situation, he stated no taxes were due ! Well I was blown away, speechless, not to mention relieved !

So although I have run across many intransigent bureaucrats, governmental and otherwise, but not at the IRS who has not stuck it to me (yet?).
Larry Coreth
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C J Murray
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Re: Sold a 356 and used a 1031, as CPA or car owner?

#50 Post by C J Murray »

Hi Larry,
Another absolute...if you speak to 3 IRS agents you will get 3 different answers because the law is so complex and because many bureaucrats want you off the phone so that they can go back to looking at porn until the day that they retire to a generous pension and superior health care.

I'm not sure how moving expense reimbursement is reported to the IRS or what proof of actual expense is required but I would be very surprised if that money that is above the actual expense is not taxed. Imagine the free for all that companies would engage in to head hunt new employees. Conversely, people that move on their own dime to improve their income logically would not be able to claim their out of pocket expenses. I can't see how the advise given to you by the IRS is correct. By now the fines and interest is much more than the original money you received. Would a CPA like to respond???
'57 Speedster
'59 Sunroof
'60 Devin D Porsche Race Car
'63 Cabriolet "Norm"
'67 911 S Original Owner
'03 Ferrari 575M
'09 Smart Passion

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Larry Coreth
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Re: Sold a 356 and used a 1031, as CPA or car owner?

#51 Post by Larry Coreth »

CJ,

It would seem that you have an even darker opinion of our civil "servants" than I or most people do.

Over the past 40 years of working as an engineer having changed jobs and companies due to circumstances beyond my control, I have moved my household more than once and yes, moving expenses are deductible up to a point whether company or personally paid, although (see line 26 form 1040) the rules have changed over the years several times (personal experience). On some occasions I had to pay for the move all on my own while others the new company subsidized the move. In each case most expenses were deductible, whether I paid or the company covered all or only part of the cost. Moving expenses reimbursed by the company used to be listed on the W-2 form and detailed expenses on a separate form (Form 3903).

In my case , from previous post, despite your doubts it happened 20 years ago and I didn't hear from the IRS on the subject then or since. As I said I was surprised too that they didn't want apiece of the action but I was not about to argue with the IRS, I just took the ruling (and money) and ran.

As they say, "the Lord and the IRS work in mysterious ways" ! What's the other saying about the bear getting or being gotten ? :) :P
Larry Coreth
Roanoake Rapids, NC

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Mark Sabbann
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Re: Sold a 356 and used a 1031, as CPA or car owner?

#52 Post by Mark Sabbann »

Here's another part of the picture: http://www.irs.gov/uac/Like-Kind-Exchan ... ction-1031
Once again, "your mileage may vary"....
Mark Sabbann
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Re: Sold a 356 and used a 1031, as CPA or car owner?

#53 Post by C J Murray »

Who here believes that the US government deserves 15-28% of the appreciation on your property? What is "fair" about a home owner/couple getting a tax free gain of $250k/$500k when they sell their house? If a "renter" collects art, coins, and cars they are treated very unfairly by our tax code.

From Mark's last IRS link is a warning that con-men use the over complex tax law to scam their customers...
If you do not specifically follow the rules for like-kind exchanges, you may be held liable for taxes, penalties, and interest on your transactions.
Beware of schemes
Taxpayers should be wary of individuals promoting improper use of like-kind exchanges. Typically they are not tax professionals. Sales pitches may encourage taxpayers to exchange non-qualifying vacation or second homes. Many promoters of like-kind exchanges refer to them as “tax-free” exchanges not “tax-deferred” exchanges. Taxpayers may also be advised to claim an exchange despite the fact that they have taken possession of cash proceeds from the sale.
We have fallen far since the Boston Tea Party.
'57 Speedster
'59 Sunroof
'60 Devin D Porsche Race Car
'63 Cabriolet "Norm"
'67 911 S Original Owner
'03 Ferrari 575M
'09 Smart Passion

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Larry Coreth
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Re: Sold a 356 and used a 1031, as CPA or car owner?

#54 Post by Larry Coreth »

CJ,

The Boston Tea party was all about "Taxation without Representation" since the colonists had no MP's in the Parliament and it could impose any tax they wanted to !

Now today we do have representation via Congress good or bad depending your political view point and/or who's in power at the time !. So if you don't like the rules change them via your congressman/senator, good luck !!! But at least it is theoretically possible. Try that in Iran, China, Saudi Arabia, Cuba, Venezuela, etc.

The tax code is riddled with shelters to serve hundreds of business/political interests, shocking isn't it, but such is democracy at work. Life isn't fair why should government be any better ?
Larry Coreth
Roanoake Rapids, NC

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