Are you a collector of coins, stamps, baseball cards, or other items?
If the answer is “yes,” you should also start collecting some important tax information.
For starters, you should know that your collecting activities will fall into one of four IRS-determined tax categories:
- Hobby
- Investment
- Trader
- Dealer
Depending on how the IRS categorizes your collecting activities, you may be liable for the AMT, capital gains, and self-employment taxes. Ouch!
Want to know how to avoid problems with the IRS and keep more money in your pocket? Don’t miss my new article titled Tax Tips: How to Treat Your Coin, Stamp, and Baseball Card Activities?
Three ways our fact-filled article can help you:
- You’ll learn why you should avoid the “hobby” classification. If Uncle Sam thinks you’re engaged in a mere “hobby,” you’re in the worst possible position. Why? Because you’ll have to jump over four hurdles before you can claim deductions for the expenses you’ve incurred. We’ll tell you what they are when you read the full article.
- We’ll explain why being an “investor” makes sense. If you can get the IRS to consider your collecting an “investing” activity you’ll do better than if you’re deemed a lowly “hobbyist.” There are four reasons for this that we’ll explain when you read the full article.
- We’ll tell you why being a “trader” is best of all. As a trader who’s making money, you’ll get the best possible tax benefits. To be considered a “trader” you must be able to prove that your collectibles activities have a profit motive and that you’re running a real trading activity. All will be explained when you read the full article.