Discussion:Tax treatment of sales
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Discussion Forum Index --> Tax Questions --> Tax treatment of sales
Biltmore26 (talk|edits) said: | 10 January 2007 |
| I have a question regarding the tax treatment of some vehicles which my husband sold. He purchased and resold for a profit 5 vehicles last year. These vehicles were purchased to be resold and were not for personal use. Is the profit on these vehicles subject to self-employment tax? | |
| January 10, 2007 | |
| Yes. Fill out Schedules C and SE. To me, it sounds like your husband is in the business of selling vehicles. | |
| January 10, 2007 | |
| I agree with Blrg...sounds more like investment property to me. | |
| 10 January 2007 | |
| I think five is the limit in OR, anymore and you would have to be licensed by the state as a dealer. Which would seem to make the cap gain treatment harder to justify. | |
| January 10, 2007 | |
| I guess I am assuming that this was kind of investment stuff he was doing. If he suddenly decided to start buying and selling cars, then Deb is correct. Now as I read that, it sounds as if he bought them all last year and sold them...which is more akin to a business than a guy who buys a car every year or so, holds them for the increase in value, and eventually sells them. Facts and circumstances will carry here. What's he doing, really? | |
| January 10, 2007 | |
| Exactly, JR. I would want to ask the client more questions in order to determine if he is in business or if this was an incidental sale of five vehicles. Does he plan on selling more vehicles in the future? | |
Death&Taxes (talk|edits) said: | 10 January 2007 |
| Did he put any money into these cars? Did he sell them individually, or to a dealer? Too many years ago, there were people who would buy used cars, transport them south and sell them. To me it sounds like he is in business, and this will happen again in the future. After all, why quit if something works. | |
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