Auctions And Income Tax

Is money received for selling at auction
considered income and taxable.

I am not a CPA nor do I portray one on TV.

That said, I suspect the answer depends on which country you are talking about.

Here in the USA, it also depends on the state in which you live and pay taxes. The feds have their rules; the states each have their own, and we pay taxes to both.

In any case, I also suspect that only the profit/gain realized would be taxable. Whether that would be considered (and taxed as) a short- or long-term capital gain or as straight income is a matter for your CPA to resolve.

Just as uboatnut, I am not a CPA nor do I portray one on TV.

First of all, your question is too vague. Gains made on selling stamps are either treated as capital gains or as income, depending on your situation. In addition, there is the question on how gains are defined, which depends on how the stamps are sold. The only way to be sure is to consult with a CPA, and even then it depends on the tax department's interpretation.

A CPA did give a presentation to our stamp club a few years back (I am in Canada). As I recall, whether income or capital gains depends on if the tax department thinks you are running a business. Capital gain is not just selling price minus purchase price. Also the amounts involved do matter.

Jan

Unless you're doing it on a significant basis, I doubt very much Revenue Canada cares...

I am not a CPA nor do I potray one either. If you check out the CRA website there are several different distinctions. Search for them. Below are a few different scenarios I have read and a link to one-
CRA capital gains/LPP.

Are you just disposing of a couple of extra items you accumulated and do not want from time to time?
Are you carrying on as a buisness of buying and selling in the nature of trade as a source of income? And if over $30,000 Total sales you will have to also become a GST registrant to collect taxes.
And then there is Listed Personal Property such as stamps, coins, manuscripts, paintings, other collectables which may have to be reported under personal property and be subject to Capital gains and losses. $1000.00 rule applies. Item sells for more than $1000. Gain is reportable. Sell for less than $1000. loss should be recorded in your book to use against future gain.
Check the CRA website for a lot of information under topics mentioned, and I would seek out professional assistance for more clarification depending on what your intent is.

Listed personal property (LPP) - Canada.ca
https://www.canada.ca/en/revenue-ag...roperty.html

I wasn't asking for myself.
Just a thought I had after reading
about people selling at auctions.
Sounds a lot like selling stocks.

More like a business buying and selling inventory.

What happens in the auction stays in the auction.

As a hobbyist you would pay capital gains like stocks. As a business you would pay income taxes (if your sales > costs + inventory). As a business you also have to pay sales taxes when selling, though eBay handles it for you if you sell there.

Hi Rog;

Do the auction houses operate under these guidelines?
Do they require ssn# or ein# for this purpose?
Thank you

Please note:
The original question came from Canada and some of the replies are coming from the U.S.

John,

Postings to this forum are supposed to be "Non Country Specific." When someone posts a "Country Specific" question I usually report it to the staff and suggest the forum it should be moved to. I didn't think to do this because I didn't notice it was coming from Canada. There is a separate forum for "all aspects of Canadian philately" where it probably should have been posted in the first place.

It looks like the thread is about run its course, but if it picks back up, I'll suggest that the staff move it.

Basil

When I first saw the thread, I considered moving it. But we do not have country specific sections for 'general' posts, so I did not move it.
Don

Basil, I was not calling-out any specific reply, but rather making a general cautionary comment. Tax questions/answers can be very country specific.

As a Canadian CPA (R) CGA(R) and knowledgible of the Income Tax Act with respect to donations of Listed Personal Property (ie. stamps), I agree with No1philatelist who stated:
"And then there is Listed Personal Property such as stamps, coins, manuscripts, paintings, other collectables which may have to be reported under personal property and be subject to Capital gains and losses. $1000.00 rule applies. Item sells for more than $1000. Gain is reportable. Sell for less than $1000. loss should be recorded in your book to use against future gain."

Additionally, the problem may be convincing the Canada Reveue Agency (CRA) of your acquisition cost of the items auctioned if you did not kept accurate records/receipts of such acquisitions.

No matter what country you're in the answer is going to be quite similar.

Basically the taxman is only interested if the amounts involved are large -- either for CGT or income tax purposes.
So if you're a a collector buying and selling small amounts on eBay or at auction, the taxman will take no interest.
If the money involved is worth taxing, then the taxman will want his cut.

Of course most auction houses pay mandatory taxes of some sort. Here in UK there is standard rate VAT on auction house premiums.