58 replies
According to my accountant (an IRS 30 year veteran) in 2010, the difference between a stated value and the price, if it exceeds $600 has to be reported as income and taxes paid on it.

For example a program that the sale page says is worth $297 and then throws in bonuses with a stated vale of $3000 all for $47, would mean I would have to report $3250 as income and pay taxes on it.

(Much the same way if you do not pay a debt and it is written off, you have to pay the amount written off as income. That is nothing new though, but same vein of thinking.)

He claims it is a fact. I haven't found it in 2010's tax code, which isn't too surprising as large as it is, but was wondering if anyone else's accountant has come across this?
#fact #irs #rumor
  • Profile picture of the author jasonboom
    I'm not a tax professional, but I would find this highly unlikely. Can you imagine the nightmare for car dealerships -- slashing prices by this much actually hurts. Well, it actually would hurt. $2,000 off, but they have to pay taxes on the difference. I highly doubt it.
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    • Profile picture of the author DogScout
      Originally Posted by jasonboom View Post

      I'm not a tax professional, but I would find this highly unlikely. Can you imagine the nightmare for car dealerships -- slashing prices by this much actually hurts. Well, it actually would hurt. $2,000 off, but they have to pay taxes on the difference. I highly doubt it.
      in some states, they do have to pay the difference in state tax.

      The taxes kick in only if the DIFFERENCE is $600

      The biggest thing about my QUALIFIED and (somewhat)TRUSTED tax guy is he is a 30 IRS veteran, but plays the numbers to the possible detriment of clients, but never known him to say anything this outrageous before and be wrong. When he told me about the luxury tax on cars over 40k (at the time) I had the same reactions that have so far been expressed here. In spite of the seemingly idiocy of that, it turned out to be true.

      Like gambling, you pay taxes if you win, but are never offset by losses.
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    • Profile picture of the author jimmytron
      Banned
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      • Profile picture of the author DogScout
        Originally Posted by jimmytron View Post

        Agreed, they can't tax you on what you didn't earn..
        Untrue, they tax you on unpaid debts, those are not earned.


        Otherwise, I had no Idea this would get to be such a charged thread.

        The goverment will be needing a way to make up for the shortfall somehow, in Ca the property taxes are not based on value this year, they are basing them on last year's tax liability. There is probably no real logic involved with taxes, anyway. Lol.
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  • Profile picture of the author psresearch
    That would be hilarious if it were true, but think about it - it doesn't make any sense.

    What he's probably talking about is "imputed income"...

    But that would mean you'd have to claim income for every discount you ever got from any place at all - Retail Stores, Restaurants, Donut Shops...

    Sounds like your best bet would be to find another accountant.
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  • Profile picture of the author Lisa Gergets
    Seems highly unlikely, but being that your accountant has been with the IRS for such a long time...it is definitely something I'd explore further.
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    • Profile picture of the author mmurtha
      Originally Posted by Lisa Gergets View Post

      Seems highly unlikely, but being that your accountant has been with the IRS for such a long time...it is definitely something I'd explore further.

      I think Lisa's right. If it were me, I wouldn't be asking a bunch of marketers lol. I'd be doing some heavy duty research on the subject, and contact the IRS directly.

      Garrie has a good idea too. You can always ask your accountant to cite the code so you can see what it states.
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  • Profile picture of the author fredjr1978
    Well, perhaps his old age and lack of memory and understanding are catching up to him.
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  • Profile picture of the author Scott Ames
    My advise is worth $5 million dollars but I've given it away free. Ooopss.. I owe taxes on $5 million now. Crap.
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    • Profile picture of the author psresearch
      Originally Posted by Scott Ames View Post

      My advise is worth $5 million dollars but I've given it away free. Ooopss.. I owe taxes on $5 million now. Crap.
      Actually, I think the REST of us owe taxes on $5 million. You get to write-off $5 million times however many people got your advice!

      LOL.
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  • Profile picture of the author hotftuna
    Can you avoid taxes by claiming your stuff is worthless?
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  • Profile picture of the author Michael Oksa
    Originally Posted by DogScout View Post

    According to my accountant (an IRS 30 year veteran) in 2010, the difference between a stated value and the price, if it exceeds $600 has to be reported as income and taxes paid on it.

    For example a program that the sale page says is worth $297 and then throws in bonuses with a stated vale of $3000 all for $47, would mean I would have to report $3250 as income and pay taxes on it.

    (Much the same way if you do not pay a debt and it is written off, you have to pay the amount written off as income. That is nothing new though, but same vein of thinking.)

    He claims it is a fact. I haven't found it in 2010's tax code, which isn't too surprising as large as it is, but was wondering if anyone else's accountant has come across this?
    In effect, he's really saying you only have to claim income if it's OVER $600, but that isn't true.

    Also, if you would have to claim the value of bonuses, you should be able to OFFSET that cost by claiming how much you OVERPAID for other products. "I paid $47, but it was only worth $2", would be a business expense of $45 - at least by that kind of thinking. My example isn't true by any stretch, but as always...

    Check with your QUALIFIED and TRUSTED tax professional.

    My opinion is that if you are asking this question here, then he doesn't meet that definition on at least one count.

    All the best,
    Michael
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  • Profile picture of the author Michael Oksa
    He may be qualified, but does he still work for the IRS?

    In what capacity did he work for the IRS?

    What are his other tax qualifications?

    Not sure if I understood, but does he have the best interest of the IRS, or his clients at heart?

    Do you have another trusted advisor you can go to for a second opinion.

    He may be right, he may be wrong. I only hope that the above questions help you to sort out things better.

    All the best,
    Michael
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    • Profile picture of the author DogScout
      Originally Posted by Michael Oksa View Post

      He may be qualified, but does he still work for the IRS?

      In what capacity did he work for the IRS?

      What are his other tax qualifications?

      Not sure if I understood, but does he have the best interest of the IRS, or his clients at heart?

      Do you have another trusted advisor you can go to for a second opinion.

      He may be right, he may be wrong. I only hope that the above questions help you to sort out things better.

      All the best,
      Michael
      He was a GM15. He certainly does not have their best interests at heart now. Lol

      Will of course get second opinions when taxes for 2010 are due in 2011 and of course the tax would be on the buyer, not the seller. I was asking if you had heard of it, I guess not, not for actual advice.
      Thanks,
      Mark
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  • Profile picture of the author azland55
    Is this what they call stealth Tax. This is how they are going to get the country back into the black. Be afraid ,very afraid
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  • Profile picture of the author Zeus66
    Hey, we're Internet marketers here. Of course you should seek tax advice from us! Put your entire livelihood, all of your seizable property, and possibly even your very freedom on the line by basing a decision on whatever you hear from us. Makes perfect sense. Why, just the other day I heard an NFL Head Coach say he thought it was a good idea to run a double tight-end set in 3rd-and-short situations. So, naturally, I headed over to the local dry cleaners pronto to see what the workers there thought of that idea. I mean, c'mon! Momma didn't raise no fool over here.

    Just messin' with ya, Dogscout.
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    • Profile picture of the author Dan C. Rinnert
      I would get a second opinion from another accountant.

      Something doesn't add up, though whenever you get politicians involved in making laws and taxes, that's par for the course.

      But, if a product is advertised as being worth $997 but sold for only $297, then supposedly I gained $700 by spending $297? Well, that is the kind of math they do in D.C., where money comes out of nowhere.

      If that's true, though, what happens for the product owner? He's losing $700 on every transaction, right? In that case, he's taking a loss on every sale. He's not making $297--he's losing $700. If he sells 1000 copies, he's got $297,000 in his bank account, but he lost $700,000.

      If that were the case, he wouldn't have to pay taxes because, on paper, he's way below poverty level. In fact, his income is negative, no? Poor guy.
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  • Profile picture of the author Tsnyder
    Simple solution... have him cite the section of the Code verifying his claim.

    Tsnyder
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  • Profile picture of the author GarrieWilson
    Ive heard of things like that before.

    Just like AOL deducts the free month they give off their taxes from the marketing department.

    If we knew and followed all the tax codes (notice - codes not laws) we would have major issues.

    How many of us actually claim barters as income? Email promo trades? etc.

    Just imagine if they hold us to the $1/email/month claim that we have put a value on...
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  • Profile picture of the author Profit-smart
    Get him to cite the tax code, there's no economic logic to that. If anything, the person RECEIVING the discount should be paying the taxes.
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    • Profile picture of the author Tsnyder
      Originally Posted by Profit-smart View Post

      Get him to cite the tax code, there's no economic logic to that. If anything, the person RECEIVING the discount should be paying the taxes.
      That's what his accountant is saying... that if you received
      something for $47 that is valued at $97 you owe tax on the
      $50 difference.

      I know he's wrong but I'll leave DS to sort that out.

      Tsnyder
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      • Profile picture of the author DogScout
        Originally Posted by Tsnyder View Post

        That's what his accountant is saying... that if you received
        something for $47 that is valued at $97 you owe tax on the
        $50 difference.

        I know he's wrong but I'll leave DS to sort that out.

        Tsnyder
        Actually, no. The difference has to be over the $600 threshold, same as written off debts, contracted work, etc.
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        • Profile picture of the author Tsnyder
          Originally Posted by DogScout View Post

          Actually, no. The difference has to be over the $600 threshold,
          I just picked those numbers out of the
          air to illustrate the point.

          Tsnyder
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  • Profile picture of the author Magix
    Of course the really good part would be to make the provider of the discount liable for reporting the recipient on a 1040 MISC like affiliate commissions. Otherwise the IRS should just collect from the discount provider, plus penalties. So on that $5 million discount...what was your name again?
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  • Profile picture of the author Dennis Gaskill
    Dogscout, is your guy saying the buyer or seller has to report that? It would seem the buyer, but so many folks are interpreting it as the seller that you need to clarify WHO your accountant says should report the break as income. I can't see how it would be the seller, that makes no sense at all - but then again, most of what the government does makes little sense to me.
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    • Profile picture of the author Tsnyder
      Originally Posted by Dennis Gaskill View Post

      Dogscout, is your guy saying the buyer or seller has to report that? It would seem the buyer, but so many folks are interpreting it as the seller that you need to clarify WHO your accountant says should report the break as income. I can't see how it would be the seller, that makes no sense at all - but then again, most of what the government does makes little sense to me.
      It couldn't be the seller. The seller is only liable
      for what they received. They didn't receive the
      discount.

      Tsnyder
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      • Profile picture of the author Dennis Gaskill
        Originally Posted by Tsnyder View Post

        It couldn't be the seller. The seller is only liable
        for what they received. They didn't receive the
        discount.

        Tsnyder
        That's the way I took it too, but it seems others were reading it differently.

        Now suppose what DogScout's accountant says was true...is a free gift worth $1000 worth $1000 or worth nothing, because you labeled it as both free and worth $1000?
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  • Profile picture of the author kindsvater
    I'd like to see that code section. It certainly is not like have a debt waived.

    If my legal services are worth $1000, but I only get paid $200, not only do I pay income taxes on only the $200, but there is not a $800 loss.

    There might be a gift issue in some circumstances, but generally what a product is worth it what it sells for.

    The result is otherwise insane. Take this forum. I guess Allen will soon be declaring bankruptcy from 'owing' millions of dollars in federal taxes because the value of the War Room is greater than the admission fee.
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    • Profile picture of the author DogScout
      Originally Posted by kindsvater View Post

      I'd like to see that code section. It certainly is not like have a debt waived.

      If my legal services are worth $1000, but I only get paid $200, not only do I pay income taxes on only the $200, but there is not a $800 loss.

      There might be a gift issue in some circumstances, but generally what a product is worth it what it sells for.

      The result is otherwise insane. Take this forum. I guess Allen will soon be declaring bankruptcy from 'owing' millions of dollars in federal taxes because the value of the War Room is greater than the admission fee.
      He never states membership is worth x amount and if he did, it is the members, not him that would have to pay taxes on the difference.
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  • Profile picture of the author DogScout
    Before 2009 was over, the tax codes was over 64,000 pages long. (At the beginning of '09 it was 17,000+ pages log) In either case, he hasn't passed on the passage or code # or page even. I could ask, but will probably not. I'll merely state that in spite of the value of the items that were represented as being by the seller, they were inflated to make sales. (that ought make the IRS happy and the FTC unhappy.) LMAO!

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    • Profile picture of the author Dan C. Rinnert
      If this is true, this would be completely nuts.

      For example, if the seller says their product is worth $997, but sells it to me for $297, I would owe taxes on that missing $700 because that would be considered income?

      That would be 100% nutty. A product is really only worth what someone is willing to pay for it. I don't care how much the seller says it's worth; it's only worth what I am willing to pay.

      The seller can claim it's worth $997, but, if I'm not willing to pay $997, is it really worth that much? If he says I can have it for $297, then I might go for it. But, at $997, I'm not biting.

      Let's say that I'm in a 35% tax bracket. So, that $700 "income" will cost me $245. So, my total cost for that product would have been $542.

      So, the product ends up costing me more than I paid for it because of some imaginary income that doesn't really exist.

      And, where do we find these amounts? The sales page? Because, for example, a PayPal receipt only shows what you paid, not what the seller claimed it was worth.

      That would be completely nuts.

      What would be next? Keeping track of the savings you realize by shopping at Wal-Mart and Home Depot and paying taxes on the amounts your receipts say you saved?

      That'd be a fast-track to bankrupt everyone in the country because we'd all have to pay taxes on money that not only didn't really exist but also never exchanged hands.

      As I said, that's just nuts.
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      • Profile picture of the author Mr. Enthusiastic
        Originally Posted by Dan C. Rinnert View Post

        What would be next? Keeping track of the savings you realize by shopping at Wal-Mart and Home Depot and paying taxes on the amounts your receipts say you saved?
        What a crazy, ludicrous idea. Keep your voice down, there might be a crazy, ludicrous politician in the area!
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      • Profile picture of the author Eric Graudins
        Originally Posted by Dan C. Rinnert View Post


        That'd be a fast-track to bankrupt everyone in the country because we'd all have to pay taxes on money that not only didn't really exist but also never exchanged hands.

        As I said, that's just nuts.
        I agree that the taxable value of such a "discount" is just notional, and I'd very much like to see the legislation for it.

        But as for money that doesn't exist? That's not nuts, It's reality.

        The foundation of the entire banking system rests on money that doesn't exist.
        It's called fractional reserve banking, where a deposit of $10 into a bank leads to the "creation" of many times that amount that the bank lends out.

        And I'm sure if some politician is reading this thread, they'll probably think it was a great idea, and will organise a committee to look into a feasability study to commission a report to propose legislation to tax you on the value of these discounts.

        Wouldn't be any more crazy than some of the other things that have happened recently
        cheers,
        Eric G.
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  • Profile picture of the author Mr. Enthusiastic
    I'm curious about this too. Mike Filsaime's promotional video last night ("lost his ego") mentioned that he won't charge $5,000 for the current offer, "although it's worth that much."

    When someone pays their $497, does that mean that the IRS is due tax on a $4,503 benefit?

    How will the tax court determine whether the "stated price" or "actual price" is the true value of the offer? Will they have to set up a web site offering software to help Internet marketers, and leave it up for a reasonable amount of time to see how many sales they make?

    If the software truly is worth $5,000, should the government buy all the available licenses and become the #1 reseller in order to balance the federal budget? The mind boggles.

    Chris
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  • Profile picture of the author seasoned
    I doubt that ****VERY**** much. It would be a DISASTER! On the OTHER hand, a SIMILAR, albeit different rule was passed over a decade ago that said that a deduction could be taken on a donation only UP to the net stated value given. It USED to be that a $3000 donation was a $3000 donation PERIOD, and could be declared as such. NOW, if you get a product that cost $40, but has a stated value of $400 in return for your $3000 gift, you can deduct ONLY $2600! But that IS different and was passed quite some time ago.


    BTW being a veteran USED to mean something but NOW they are changing SO MUCH SO fast that NOBODY can keep up with it. And IRS agents DON'T know the code and are actually EXEMPT from having ANY negative effect as to giving out the wrong info. If you are OVER charged, GREAT, they LOVE that! If something happens so you pay less, EVEN solely as a direct consequence of bad info from an IRS employee, GREAT! They will simply charge you the fee, interest AND a penalty! So don't take an IRS employees word as gospel, and that is FROM the IRS! They want you to KNOW you can't trust them(er, their employees)!

    Steve
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  • Profile picture of the author CDarklock
    Originally Posted by DogScout View Post

    According to my accountant (an IRS 30 year veteran) in 2010, the difference between a stated value and the price, if it exceeds $600 has to be reported as income and taxes paid on it.
    So if it's income for the buyer, then surely it's a loss for the vendor, right?

    Which means that if I say my product is $1,500 but I'm selling it for $500, and you buy it... I didn't just make $500 income. I took a $1,000 loss.

    Ask your accountant about that one.
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    • Profile picture of the author Dennis Gaskill
      Originally Posted by Dan C. Rinnert View Post

      [b]...if the seller says their product is worth $997, but sells it to me for $297, I would owe taxes on that missing $700 because that would be considered income?

      That would be 100% nutty. A product is really only worth what someone is willing to pay for it. I don't care how much the seller says it's worth; it's only worth what I am willing to pay.
      On the other hand, with tens of thousands of new pages of tax code, and a what, a 1.X trillion dollar deficit, maybe the IRS has been instructed to aggressively go after anything and everything.

      Originally Posted by CDarklock View Post

      So if it's income for the buyer, then surely it's a loss for the vendor, right?

      Which means that if I say my product is $1,500 but I'm selling it for $500, and you buy it... I didn't just make $500 income. I took a $1,000 loss.

      Ask your accountant about that one.
      Nope. If I send out one of my books and it gets lost, I can only claim what it cost me, not what it sells for.
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      • Profile picture of the author seasoned
        Originally Posted by Dennis Gaskill View Post

        On the other hand, with tens of thousands of new pages of tax code, and a what, a 1.X trillion dollar deficit, maybe the IRS has been instructed to aggressively go after anything and everything.



        Nope. If I send out one of my books and it gets lost, I can only claim what it cost me, not what it sells for.
        What MANY don't seem to understand is that a TAX is TAXing!!!!!

        5 : to make onerous and rigorous demands on
        If they tax the people, they tax the economy. Let's say that a person has $1,000,000. MAYBE s/he will start/expand a business. If you tax them an additional $300,000, NOW they cut back on expectations, may not hire, and may even cut back on purchases because of doubt on the future. And that is for a MILLONARE! If they make say $100,000, that same 30% will have an even bigger effect. They may decide to not buy a new car(EVEN if used), not speculate, not update their home, etc....

        So the IRS figures an extra $1000 is an extra $1000. They don't realize that that $1000 might simply go to temporary unemployment for a person laid off because they charged the $1000 in the first place. Lately the government has taken to saying that they tax to prevent behaviour! Following THAT line, I guess they don't want people to have jobs, make money, or even live.

        Steve
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        • Profile picture of the author Jenb
          Well, I may not be an IRS agent, but I've been a CPA for 10 years, and what he is stating is true in certain circumstances. But one of them is NOT going to be an internet marketing course 'claiming' value. If people are willing to pay $47, guess what the 'value' is? If, instead, you are talking about a real piece of property that is appraised at $60,000, you don't have to 'guess' what the value is....there is a difference.
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          • Profile picture of the author seasoned
            Originally Posted by Jenb View Post

            Well, I may not be an IRS agent, but I've been a CPA for 10 years, and what he is stating is true in certain circumstances. But one of them is NOT going to be an internet marketing course 'claiming' value. If people are willing to pay $47, guess what the 'value' is? If, instead, you are talking about a real piece of property that is appraised at $60,000, you don't have to 'guess' what the value is....there is a difference.
            GEE, I don't even think that is a new thing. Of course, with sales, etc... I don't think they can pull it off but with certain sales, like to relatives, the value the property at its appraised value. So if you sell a $500,000 home to your kids for $10,000, they may have to pay for taxes on the $490,000 as income. AND, of course, the real estate taxes are generally based on appraisers, and they don't care what it sold for.

            Steve
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            • Profile picture of the author SirThomas
              Originally Posted by seasoned View Post

              GEE, I don't even think that is a new thing. Of course, with sales, etc... I don't think they can pull it off but with certain sales, like to relatives, the value the property at its appraised value. So if you sell a $500,000 home to your kids for $10,000, they may have to pay for taxes on the $490,000 as income. AND, of course, the real estate taxes are generally based on appraisers, and they don't care what it sold for.

              Steve
              And, if someone has a property "appraised" for $500k and I negotiate a sale price of $400k,
              it doesn't mean I received a $100k income...

              $400k is the real value and price.


              Thomas
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              • Profile picture of the author seasoned
                Originally Posted by SirThomas View Post

                And, if someone has a property "appraised" for $500k and I negotiate a sale price of $400k,
                doesn't it mean I received a $100k income...

                $400k is the real value and price.


                Thomas
                I did say SOME! I'm not sure how it is supposed to work, but in some casess it is supposed to work as I said. USUALLY, you're right. It sells in a normal way and taxes are on the sale.

                Steve
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              • Profile picture of the author GarrieWilson
                Originally Posted by SirThomas View Post

                And, if someone has a property "appraised" for $500k and I negotiate a sale price of $400k,
                doesn't it mean I received a $100k income...

                $400k is the real value and price.


                Thomas
                Actually, property tax is based on the current appraised/assessed value. Not what you pay for it.

                Atleast in most states.

                Of course I think property tax is BS because I paid sales tax when I purchased it. People should do something...
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                • Profile picture of the author SirThomas
                  Originally Posted by seasoned View Post

                  GEE, I don't even think that is a new thing. Of course, with sales, etc... I don't think they can pull it off but with certain sales, like to relatives, the value the property at its appraised value. So if you sell a $500,000 home to your kids for $10,000, they may have to pay for taxes on the $490,000 as income. AND, of course, the real estate taxes are generally based on appraisers, and they don't care what it sold for.

                  Steve
                  Originally Posted by GarrieWilson View Post

                  Actually, property tax is based on the current appraised/assessed value. Not what you pay for it.

                  Atleast in most states.

                  Of course I think property tax is BS because I paid sales tax when I purchased it. People should do something...

                  Sure. Most counties base their property taxes on appraised values, but we were talking about income tax...


                  Thomas
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      • Profile picture of the author CDarklock
        Originally Posted by Dennis Gaskill View Post

        Nope. If I send out one of my books and it gets lost, I can only claim what it cost me, not what it sells for.
        Connect the dots on that. If it's not really a loss to the vendor, it's not really income to the buyer either. Even if this is in the tax code, it won't stand up.
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        "The Golden Town is the Golden Town no longer. They have sold their pillars for brass and their temples for money, they have made coins out of their golden doors. It is become a dark town full of trouble, there is no ease in its streets, beauty has left it and the old songs are gone." - Lord Dunsany, The Messengers
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        • Profile picture of the author Dennis Gaskill
          Originally Posted by seasoned View Post

          What MANY don't seem to understand is that a TAX is TAXing!!!!!
          Not sure why you quoted me to say that. I never said anything about the intelligence of that notion. Government decisions are often lacking in logic and reason to me.

          Originally Posted by CDarklock View Post

          Connect the dots on that. If it's not really a loss to the vendor, it's not really income to the buyer either. Even if this is in the tax code, it won't stand up.
          lol - you're thinking logically, the government doesn't have to and often doesn't. For example, if I get a tax return because I overpaid, I have to claim that as income the next year. I already claimed it as income this year, so the same income gets claimed as income twice. Does that make sense? Your tax dollars helped pay for a $2.6 million dollar effort to get prostitutes in China to drink less alcohol, is that logical? Taxpayers money funded an Argentinian study to discover why gay men engage in risky sexual behavior while drunk.

          Duh. They were drunk. Did we need to spend $400,000 on that?

          Obviously, the government has little use for logic unless it serves to grow government.
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          Just when you think you've got it all figured out, someone changes the rules.

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          • Profile picture of the author CDarklock
            Originally Posted by Dennis Gaskill View Post

            lol - you're thinking logically, the government doesn't have to and often doesn't.
            It's terribly frustrating to me when people complain that the government doesn't think logically. The government is extremely logical. People just don't understand the logic, and it's usually because they can't look past the question of what's important to them.

            For example, if I get a tax return because I overpaid, I have to claim that as income the next year. I already claimed it as income this year, so the same income gets claimed as income twice. Does that make sense?
            Yes. Money is taxed when it changes hands. When you got the money, you were taxed. You gave it to the government for some reason (why?). Now the government is giving it back to you, and you're being taxed again - because the money changed hands.

            It's the same reason you're "double-taxed" if you start a corporation. The corporation is not you. When you take money out of the corporation, it changes hands. If you were a sole proprietor, you wouldn't get double-taxed. That double taxation is the price you pay for the protection of the corporate veil.

            Start looking at things this way, and you'll begin to understand why large companies operate the way they do. Large companies really, really like to run up whopping great credit balances with one another... because as long as the money doesn't change hands, they don't get taxed on it.

            Governments operate this way, too. So just like these big corporations aren't worried about their massive credit balances with other corporations, our government isn't worried about the national debt either.

            Your tax dollars helped pay for a $2.6 million dollar effort to get prostitutes in China to drink less alcohol, is that logical?
            Not familiar with that study, but let's put it in perspective: the government spent $2.6 million out of $4.4 trillion.

            Let's spell that out, shall we?

            $2,600,000

            out of

            $4,400,000,000,000

            This is roughly the equivalent of having a six-figure income and losing a nickel. Should that outrage anyone?

            Yes, I know, $2.6 million is a lot of money and you sure do wish they had spent it on something you cared about. But to the government, it's tiny, and certainly dwarfed by the cost of several other things they did that you'd be very unhappy not to have. Surely you can let the Asian hookers have a nickel. Who wouldn't give a nickel to an Asian hooker?

            Taxpayers money funded an Argentinian study to discover why gay men engage in risky sexual behavior while drunk.

            Duh. They were drunk. Did we need to spend $400,000 on that?
            Again, out of $4 billion. This is slightly more money, proportionally. It might be shocking. It's like making a hundred thousand a year... and losing TEN DOLLARS.

            But let's also put it in perspective.

            Latin America has a higher incidence of HIV than any other part of the world. In Argentina, one out of every 200 adults has HIV. To put that in perspective, here in the United States, it's approximately one out of every 600.

            The single most common vector of infection is male-on-male sex.

            Statistics show that while everyone has impaired judgment and engages in risky behaviour while drunk, gay men are markedly more likely than any other group to engage in risky SEXUAL behaviour rather than any other kind of risky behaviour. (There's no "duh" here. It's an actual mystery.)

            Argentina's public health system pays approximately $600,000 in care over the lifetime of an HIV patient.

            I would say $400,000 on this study was a pretty good business decision.
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            "The Golden Town is the Golden Town no longer. They have sold their pillars for brass and their temples for money, they have made coins out of their golden doors. It is become a dark town full of trouble, there is no ease in its streets, beauty has left it and the old songs are gone." - Lord Dunsany, The Messengers
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            • Profile picture of the author JohnMcCabe
              Originally Posted by GarrieWilson View Post

              Actually, property tax is based on the current appraised/assessed value. Not what you pay for it.

              Atleast in most states.

              Of course I think property tax is BS because I paid sales tax when I purchased it. People should do something...
              You are partly right. The language in many states pegs the property tax at some levy against the fair market value of the property. If a property hasn't changed hands in several years, tax authorities use an estimate of fair market value via the local assessor.

              A current sale typically resets the meter, as the sale price is accepted as the fair market value in most cases.

              Back in Nebraska, and in many rural communities, you have properties which have not been sold on the open market for generations. I knew about one farmstead that had an assessed value of ~$150, starting with the original sale price of $1/acre and going through over 100 years of minor adjustments through the assessor applying a formula to the property in lieu of an actual assessment. When the house, outbuildings and land eventually sold, it went for ~$225K. Once the sale was recorded, the new value was ~$225K, and the sellers paid capital gains tax, not income tax.
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            • Profile picture of the author seasoned
              Originally Posted by CDarklock View Post

              It's terribly frustrating to me when people complain that the government doesn't think logically. The government is extremely logical. People just don't understand the logic, and it's usually because they can't look past the question of what's important to them.
              Why don't you look at REALITY, and THEN comment!

              Originally Posted by CDarklock View Post

              Yes. Money is taxed when it changes hands. When you got the money, you were taxed. You gave it to the government for some reason (why?). Now the government is giving it back to you, and you're being taxed again - because the money changed hands.

              It's the same reason you're "double-taxed" if you start a corporation. The corporation is not you. When you take money out of the corporation, it changes hands. If you were a sole proprietor, you wouldn't get double-taxed. That double taxation is the price you pay for the protection of the corporate veil.
              Actually, the corporation is taxed based on assets, and expenses AREN'T taxed! The INCOME is!

              Originally Posted by CDarklock View Post

              Not familiar with that study, but let's put it in perspective: the government spent $2.6 million out of $4.4 trillion.

              Let's spell that out, shall we?

              $2,600,000

              out of

              $4,400,000,000,000

              This is roughly the equivalent of having a six-figure income and losing a nickel. Should that outrage anyone?
              FIRST of all, 4.4trillion is a LOT of money! The TOTAL OUTSTANDING DEBT, AND obligations, prior to obama was only about 3 times that.

              So let's say you made 100K for 20 years, that would be equivalent to about 4MILLION in your case! So that is ACTUALLY more like $2.4. But that is for ONE year! Let's say you live to be 80, that is $192 over your life, assuming the price is consistant, which you know it WON'T be! And this is one of MILLIONS of programs! But are you REALLY going to tell me that you would be HAPPY if someone took $192 from you!?!? HEY, I can make you VERY happy! HECK, send $192,000 to me!

              Originally Posted by CDarklock View Post

              Yes, I know, $2.6 million is a lot of money and you sure do wish they had spent it on something you cared about. But to the government, it's tiny, and certainly dwarfed by the cost of several other things they did that you'd be very unhappy not to have. Surely you can let the Asian hookers have a nickel. Who wouldn't give a nickel to an Asian hooker?
              Actually, it is NOT tiny! Haven't you heard? Californias credit rating has gone down the tubes, and the US credit rating may soon follow. HOW could you NOT know we are in HARD TIMES!?!?!? Heck, my bank had the un flattering distinction of being the LARGEST bank failure IN HISTORY!

              Originally Posted by CDarklock View Post

              Again, out of $4 billion. This is slightly more money, proportionally. It might be shocking. It's like making a hundred thousand a year... and losing TEN DOLLARS.

              But let's also put it in perspective.

              Latin America has a higher incidence of HIV than any other part of the world. In Argentina, one out of every 200 adults has HIV. To put that in perspective, here in the United States, it's approximately one out of every 600.

              The single most common vector of infection is male-on-male sex.

              Statistics show that while everyone has impaired judgment and engages in risky behaviour while drunk, gay men are markedly more likely than any other group to engage in risky SEXUAL behaviour rather than any other kind of risky behaviour. (There's no "duh" here. It's an actual mystery.)

              Argentina's public health system pays approximately $600,000 in care over the lifetime of an HIV patient.

              I would say $400,000 on this study was a pretty good business decision.
              They KNEW the answers in the context of what was needed, so it was a BAD decision. Try to justify it all you want, but it WAS a bad decision. And they demand WE pay more?!?!?!?
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  • Profile picture of the author TelegramSam
    The fact that most people never implement the courses they buy, never mind the added bonuses, means that there was zero benefit. Hence zero tax :-)

    In fact they can claim an even bigger write off for the added stress of trying to order through server down times, lack of technical support, and the hassle of trying to cancel a forced monthly continuty.

    Sam
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  • Profile picture of the author Lisa Gergets
    In what capacity did he work for the IRS?
    He was the janitor...is that bad?
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  • Profile picture of the author SirThomas
    Originally Posted by DogScout View Post

    According to my accountant (an IRS 30 year veteran) in 2010, the difference between a stated value and the price, if it exceeds $600 has to be reported as income and taxes paid on it.
    And who would be assessing the value? a seller?

    Using your accountant's logistics, I could value my house at a million dollars but
    sell it to you for 5000k. Then claim myself 500k as a loss and you'd have to absorb
    that 500k as income and pay taxes on it... lol

    Now I know, how we can bring more taxes in to balance the budget! :-)


    Thomas

    PS. Knowing the current legislators and how they come up with all those "solutions",
    I wouldn't be surprised see this "new rule" somewhere in the 2010 IRS code...!
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  • Profile picture of the author Phil Spinelli
    it doesn't matter if he worked for the IRS.

    Call any government agency 3 times,
    ask the same exact question to 3 different people
    and you'll get 3 different answers.

    And as for accountants, they crack me up too.

    Anytime you change accountants, they want to redo your past few years filings that another certified accountant already did.

    One more thing, and even this is not a 100% guarantee. Is to ask a tax lawyer these questions or have them setup your business structure, then have your accountant follow the lawyers advise on how things should be filed and organized.
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  • Profile picture of the author lisag
    Originally Posted by DogScout View Post

    According to my accountant (an IRS 30 year veteran) in 2010, the difference between a stated value and the price, if it exceeds $600 has to be reported as income and taxes paid on it.

    For example a program that the sale page says is worth $297 and then throws in bonuses with a stated vale of $3000 all for $47, would mean I would have to report $3250 as income and pay taxes on it.

    (Much the same way if you do not pay a debt and it is written off, you have to pay the amount written off as income. That is nothing new though, but same vein of thinking.)

    He claims it is a fact. I haven't found it in 2010's tax code, which isn't too surprising as large as it is, but was wondering if anyone else's accountant has come across this?
    Let's see what the IRS says:

    What is considered a gift?
    Any transfer to an individual, either directly or indirectly, where full consideration (measured in money or money's worth) is not received in return.

    Who pays the gift tax?
    The donor is generally responsible for paying the gift tax. Under special arrangements the donee may agree to pay the tax instead. Please visit with your tax professional if you are considering this type of arrangement.

    What can be excluded from gifts?
    The general rule is that any gift is a taxable gift. However, there are many exceptions to this rule. Generally, the following gifts are not taxable gifts.

    1. Gifts that are not more than the annual exclusion for the calendar year.
    2. Tuition or medical expenses you pay for someone (the educational and medical exclusions).
    3. Gifts to your spouse.
    4. Gifts to a political organization for its use.

    In addition to this, gifts to qualifying charities are deductible from the value of the gift(s) made.

    What is "Fair Market Value?"

    Fair Market Value is defined as: "The fair market value is the price at which the property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or to sell and both having reasonable knowledge of relevant facts.

    The fair market value of a particular item of property includible in the decedent's gross estate is not to be determined by a forced sale price. Nor is the fair market value of an item of property to be determined by the sale price of the item in a market other than that in which such item is most commonly sold to the public, taking into account the location of the item wherever appropriate." Regulation ยง20.2031-1.


    Frequently Asked Questions on Gift Taxes
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    -- Lisa G

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  • Profile picture of the author Lyn Woodring
    Riddle me this; If you as an employee recieves a discount from the company you work for that exceeds a limit (15%?) then that amount above (15%?) is income to you. But if you get that same discount and are not employeed there, then there is no implied income. I suspect the difference lies in the relationship. As already been said money is taxed when it changes hands and since no money is changing hands on a discount liked described and there is no relationship between buyer and seller then I don't believe there is neither income nor loss.
    Capital gains are incurred when the sale exceeds your costs in the property. But those gains can be offset by the purchase of another house.
    BTW CPAs, Enrolled Agents and other tax professionals serve two masters, the IRS and you. Who do you think has the most clout?
    I've filed taxes for twenty years and never had an audit and my clients always files as self prepared. I do that because I will tell my clients the truth which might get me censored as a IRS approved agent.
    Personally I'd talk with a tax lawyer.
    The $600 is a yearly threshold for reporting income.
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