6 Nov
2003
6 Nov
'03
3:12 a.m.
I'm somewhat hesitant to enter this "fray", but since I've for many
years been
a collector of vintage systems, here goes:
My business is consulting (computer design, architecture, patent matters, and
technical due-diligence for VCs) - so I've had my own "S" Corp. since 1986
(Minimum tax - $800/year in CA).
Every item (including vintage computers, etc.) that I buy or sell is entered
into my accounting system. Every dollar I earn using my vintage systems in
my work or for resale goes into that system. At the end of the year my CPA
creates a balance sheet, P&L, etc. (It costs about $1,500/year for tax
accounting - which is deductable). I take advantage of every legal means to
reduce my taxes - and I keep impeccable records.
I've been audited twice - and came out totally clean (well almost - once the
IRS concluded that I didn't declare $300 in income - but they let it drop
because my records otherwise were impeccable).
So if you're willing to do the necessary paperwork - and have your "hobby"
as
a collector work for you to make $, you can have a win-win in terms of
expensing collectables.
I've also considered forming a 501(3c) non-profit corporation - but so far
that hasn't been necessary - as the utililization of my collectables in
conjunction with my business has just about always turned a (taxable) profit.
Cheers,
Lyle
On Thursday 06 November 2003 03:32, Joe wrote:
At 10:02 PM 11/5/03 -0800, you wrote:
getting professional advice. Any idea if storage costs go towards showing
that you didn't make a profit?
It should be, but the same rules woiuld apply that applies to a home
business; the area would have to be used exclusively for your hobby
business. The costs for a storage unit should apply but you can't charge
off the costs of your living room (unless you use it exclusively and IRS
would probably make you prove that). My living room would qualify :-( but I
don't claim it.
Unfortunately in my case, I don't have receipts that show how much I paid
for all this junk, and I sure can't remember in most cases.
I have the same problem. I buy most of my stufff in big lots so costs is
minimal. But the expenses and travel are usually a lot more than the item
costs.
Joe
>And yes, I will end up getting professional advice in the long run on
> this.
>
> Zane
>
>--
>--
>
>| Zane H. Healy | UNIX Systems Administrator |
>| healyzh(a)aracnet.com (primary) | OpenVMS Enthusiast |
>|
>| | Classic Computer Collector |
>
>+----------------------------------+----------------------------+
>
>| Empire of the Petal Throne and Traveller Role Playing, |
>| PDP-10 Emulation and Zane's Computer Museum. |
>| http://www.aracnet.com/~healyzh/ |
--
Lyle Bickley
Bickley Consulting West Inc.
Mountain View, CA 94040
"Black holes are where God is dividing by zero"
The
problem is that with the IRS you have to PROVE that you didn't make
a profit. If they get something from PayPal (or anywhere else) that
shows that you sold something for money (note that I didn't say
profit!), then you need to have records showing that it's cost and your
expenses are equal or greater than the income from the sales or else you
owe taxes on it. In addition to the possible taxes you may (will!) also
be charged interest AND penalties AND you could even be charged with
income tax evasion!
I rather figured this was the case, and was part of why I recommended