Big auction houses, 1099 tax forms.

crsides · Jul 3, 2021

Was working thru alternatives with a gun collector who is downsizing a large collection. Large auction house or take your time and do it yourself. Anybody here done that already?

I was a bean counter in my previous life and am quite sure if you sell a large collection, the auction house will bill the gun buyers and forward you a nice fat check after they get theirs. My guess is you will receive a 1099 tax reporting form at year end, for which you will have to determine what your costs for the items were, and pay 28% fed ( plus state) taxes on the difference (profit).

If that happens, it needs to be part of the overall decision process.

Anybody know?

TIMETRIPPER · Jul 4, 2021

Three years ago a friend of mine sold 40 guns at an auction house and received nearly $20,000. He did not receive a 1099 nor did he pay any income tax on the proceeds. It 's consider personal property. Now, if he had owned a gun shop and the guns were part of the inventory, that would be a different situation.
Best bet is to ask the auction house or a cpa about what to expect as tax laws can change.

John

Telecaster · Jul 4, 2021

1099 is miscellaneous income for a business. You don’t get one when you sell a car or house, either, unless you’re a car dealer or realtor.

johngross · Jul 4, 2021

Straight from the IRS. Read it and weep.

Topic No. 409 Capital Gains and Losses | Internal Revenue Service

*********************

Almost everything you own and use for personal or investment purposes is a capital asset.....

There are a few exceptions where capital gains may be taxed at rates greater than 20%:

2. Net capital gains from selling collectibles (such as coins or art) are taxed at a maximum 28% rate.

**********************

THE PILGRIM · Jul 4, 2021

If you send me a 1099, I will report it or protest it.
I will not ignore it!
Back in the day, I used to be an active Barter Trader.
Then the IRS imposed the 1099 requirement on the Barter Co.
$20K of Funny Money ain’t the same as $20K of Green!
But when you get that 1099, it’s Taxed the same.

crsides · Jul 18, 2021

TIMETRIPPER said:
Three years ago a friend of mine sold 40 guns at an auction house and received nearly $20,000. He did not receive a 1099 nor did he pay any income tax on the proceeds. It 's consider personal property. Now, if he had owned a gun shop and the guns were part of the inventory, that would be a different situation.
Best bet is to ask the auction house or a cpa about what to expect as tax laws can change.

John

personal property or not, you have a capital gain that is taxable. My question is whether the big auction houses actually issue 1099's for the check they cut to the seller. Apparently not, if your friends experience is normal. I would like to hear from others who have sold thru the major auction houses.

Onomea · Jul 18, 2021

This might be useful:

...In defining a TPSO [Third party settlement organization], the IRS lists an auction house as an example. An auction house connects buyers and sellers of services and in return takes a small fee. If an auction house processes more than $20,000 and more than 200 transactions for the same seller of goods or services then it must issue the seller a 1099-K listing the seller’s gross income from the sales. This ensures that the seller reports their income payments from selling goods or services on their tax return...

Are You Confused by Form 1099-K? Don'''t Worry, You Should Be | TaxBit Blog

Skeet 028 · Jul 19, 2021

I sell quite a few items on ebay. The first time I sold enough to be over 20 grand they sent me a 1099. I had to scramble figure all the costs associated with the items i sold. The big auction houses such as Rock Island auctions charge in excess of 15% to sell your items which is ok but then comes a 1099 too. I had a model 70 Winchester rare caliber they figured would go for 18-20 thousand and they wanted me to pay for advertising and pictures in the catalog(ain't cheap) then they charge 15% and get 15% buyers premium... I sold the darn thing myself at a Winchester collectors show and no 1099 or 15% auction fee. I have a double bbl Ithaca that is worth in the neighborhood of 50-60 grand that I talked RI auctions down to 12%...As I said...I have it. Consider...on a 20,000 buck item they will make 6 grand

Big auction houses, 1099 tax forms.

crsides

US Veteran, SWCA Member, Absent Comrade

TIMETRIPPER

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Telecaster

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johngross

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THE PILGRIM

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crsides

US Veteran, SWCA Member, Absent Comrade

Onomea

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Skeet 028

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