Are there any tax gurus on Hubski that can help me translate these two pages on Capital Gains?

https://www.irs.gov/taxtopics/tc409

https://en.wikipedia.org/wiki/Capital_gains_tax_in_the_United_States

To cut to the chase, my main questions are . . .

If I sell an ass ton of my personal property in 2018, and the wife and I don't make enough money to qualify for being taxed for personal gains, do I still report my sales?

If so, do all I have to do is keep the receipts?

If literally every last penny I get from selling turns around and goes to charitable organizations, does that add to or subtract from or change how I report things?

Will all of this activity trigger an audit? Not that I have anything to hide, because I'm always 100% honest and transparent on my taxes, but I'd like to save myself, my tax preparer, and the government a lot of hassle if possible.


kleinbl00:

Capital gains tax changes a bit for 2018. Additionally "an ass ton" is different numbers for different people. Finally, the standard deduction changes.

I'm going to make some assumptions. You can pretend this is about someone else if I'm wrong.

We'll assume you're married filing jointly. Your standard deduction changes from $12,700 to $24,000. We'll also assume that you're in the 22-24% tax brackets (you and dala have a taxable income together between $38k and $148k).

Long term capital gains are taxed at the same rate as your income (but are not added to your taxable income). You now have double the standard deduction - that means the amount you can deduct without having to itemize. Let's assume you are ragged edge of having to itemize in 2017 (you aren't) and nothing changes for 2018 except the liquidation of your holdings. The difference in standard deduction is 11,300. If you make less than $50k or so on your sales, the amount of capital gains tax you would pay would still be within your standard deduction. If you net more than that, you would pay capital gains tax on the remainder (I think - not a tax professional).

So let's say you sell $75k worth of comics. First off, nice job. Second off, you would pay between 22% and 24% of $75k-$49,130(ish) or $6000(ish). You're still netting $69k after taxes.

Charitable donations don't really gain you that much. The reason you do it is to sneak into another tax bracket.

Audits:

The current audit rate is something less than 1%.

    The higher your income, the more likely you are to be audited. The IRS audited 1.7 percent of returns that reported more than $200,000 in income. Agents audited 5.8 percent of returns that reported more than $1 million in income.

If they're going to audit, they'll generally put their efforts into places they can make real money. If you're in the land of standard deductions and 1040EZs, you're more likely to get hit by a bus than audited. The two people I know who have been audited in the past ten years own multiple properties overseas, shelter their earnings through multiple pass-through corporations and have aggressive accountants whose attitudes run towards "bring it - the worst you can do is make me pay what I actually owe."


posted by rd95: 24 days ago