Flip Tax
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@Ivorythumper said in Flip Tax:
I’m pretty sure that selling things for more than you paid for them is, in the eyes of the iRS, always a taxable event.
Kinda. If you sell your car, you don't have to pay the IRS. If you sell your house, you don't have to pay the IRS on profits up to $500k (if married) or $250k (if single).
@Ivorythumper said in Flip Tax:
I’m pretty sure that selling things for more than you paid for them is, in the eyes of the iRS, always a taxable event.
Kinda. If you sell your car, you don't have to pay the IRS. If you sell your house, you don't have to pay the IRS on profits up to $500k (if married) or $250k (if single).
If you sell your car for more than it's worth (bit hard to determine right now) you are curbstoning and subject to tax.
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If you sell your car and it’s part of your business then you have to pay taxes on it as well.
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Purely hypothetical … what if they structure the property tax rates to be progressive based on the price of the property?
E.g., like your federal income tax, the more money you make, the higher your marginal tax rate. For a property sale, the higher the sale price, the higher the marginal tax rate for the sale.
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@Ivorythumper said in Flip Tax:
I’m pretty sure that selling things for more than you paid for them is, in the eyes of the iRS, always a taxable event.
Kinda. If you sell your car, you don't have to pay the IRS. If you sell your house, you don't have to pay the IRS on profits up to $500k (if married) or $250k (if single).
@Ivorythumper said in Flip Tax:
I’m pretty sure that selling things for more than you paid for them is, in the eyes of the iRS, always a taxable event.
Kinda. If you sell your car, you don't have to pay the IRS. If you sell your house, you don't have to pay the IRS on profits up to $500k (if married) or $250k (if single).
The first $500k is excluded from gains by tax regulation but that demonstrates my point that government claims the right to tax all profits. It’s smart policy to exclude some profits so to make society more mobile and to encourage upward mobility and economic stimulus.
As for cars, there are casual sales vs business transactions— even if you did sell your car for a few thousand more than you paid, it’s not worth going after low sums from individuals.
