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19 August 2021, 11:28 AM | #1 |
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When selling a Rolex to a Gray. Is your return on the watch taxed?
Apologies in advance if this is a dumb question as I’ve never sold to a Gray before. I have a TT DJ41 that is not getting much wrist time and I’d like to sell it. Hypothetically if I’m offered 7.5k, am I obligated to pay tax on that amount or keep the whole dollar amount. Thx
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19 August 2021, 11:35 AM | #2 |
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there are always capital gains on assets with realized gains... whether or not the IRS fins out is up to the buyer...
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19 August 2021, 11:38 AM | #3 |
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Capital gains? I wouldn’t be gaining anything Lol. I assume the buyer would have to pay tax on his purchase as well if it’s decided that they will report purchase to the IRS.
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19 August 2021, 12:07 PM | #4 |
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you're selling at a loss... then no gains.
a watch is like a piece of art or real estate or crypto |
19 August 2021, 12:16 PM | #5 |
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You are not a store. You do not collect tax. However, in theory, if you sold a Daytona for 40k you’re “supposed” to pay tax on the 26.5k profit.
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19 August 2021, 12:18 PM | #6 |
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Interesting question. If you make a profit on something in the US, you pay capital gains, right? No idea…
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19 August 2021, 12:30 PM | #7 | |
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If you owned less than a year and make a profit, you pay regular income tax rate. Post 1 year of ownership, profits taxed as capital gains. The dealer won’t take the taxes, you’d have to declare on tax forms at the end of the year. If you trade towards something else, the price of your trade is deducted and you only pay sales tax on the remaining balance. I.e. you’re offered 7.5k trade value for your watch and purchasing another 10k watch, you’d only pay sales tax on 2.5k. Sent from my iPhone using Tapatalk |
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19 August 2021, 12:40 PM | #8 | |
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Quote:
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19 August 2021, 12:44 PM | #9 | |
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Income or capital gains tax would be paid on the proceeds (profits) of any sale. Buy a watch for $9,000, sell it six months later for $15,000, pay income tax on $6,000. Sales tax is paid on the purchase of a new watch. Buy a $9,000 watch, pay sales tax on a $9,000 purchase. In either situation, a trade-in offsets the tax liability: Income/cap gains tax: Dealer offers $15,000 for a watch you paid $9,000 for, decide to instead take a $12,000 watch and $3,000 cash, pay income tax on $3,000 instead of $6,000. Sales tax: Dealer offers $15,000 for the watch you paid $9,000 for, you put it towards a $20,000 watch, sales tax is paid on the $5,000 difference you pay in cash. |
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19 August 2021, 12:46 PM | #10 | |
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Crappy “asset” because technically you’re taxed on profit but cannot write off losses. Which is why I never view watches as investments. My guess is 90%+ of flippers don’t report. Sent from my iPhone using Tapatalk |
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19 August 2021, 12:49 PM | #11 |
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Correct, lots cash changing hands…
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19 August 2021, 12:53 PM | #12 | |
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19 August 2021, 01:05 PM | #13 |
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Let me get this straight. I pay state tax, federal tax, sales tax, property tax, wife tax, child tax, tax on tax. Now if I sell my watches I have to pay more taxes? GTFO. I'll keep them. Thank you very much.
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19 August 2021, 01:17 PM | #14 |
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19 August 2021, 01:23 PM | #15 |
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19 August 2021, 01:40 PM | #16 |
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Simple, don't worry about it. No one will ever know unless you start blabbing about it on the internet. The government takes enough already.
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19 August 2021, 01:56 PM | #17 |
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Just guessing here, taxes on sold watches don't get paid often
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19 August 2021, 02:00 PM | #18 |
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Call me crazy, but I would try to sell it for green cash. Most grey market dealers are swimming in it to buy and sell inventory. No smart dealer is going to charge tax. No smart seller is going to pay it. There's always grey areas to obfuscate it. *no pun intended.
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19 August 2021, 02:02 PM | #19 | |
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And any serious dealer would have a retail tax number that exempts them from paying sales taxes on items purchased for resale. |
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19 August 2021, 02:12 PM | #20 |
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I have never paid income tax on an object I have sold in my life. I can’t imagine that many people do.
(Obviously this does not apply to property sales, or investments that result in capital gains) |
19 August 2021, 09:00 PM | #21 |
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19 August 2021, 09:11 PM | #22 |
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19 August 2021, 09:21 PM | #23 | |
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Quote:
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19 August 2021, 09:54 PM | #24 |
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The real question is can you claim that loss?
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19 August 2021, 09:59 PM | #25 | |
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Quote:
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19 August 2021, 10:06 PM | #26 |
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Think about your question Frank.
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19 August 2021, 11:42 PM | #27 |
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I am not familiar with the tax system in the US but in the EU, proceeds from the sale by an individual of her / his private property are not considered income and therefore exempted from taxation. Which makes perfect sense.
You can sell your house, your car, your watch and never have to pay tax even if you sold at a profit. |
20 August 2021, 12:03 AM | #28 |
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Since I'm not a billionaire, I'm always afraid of the IRS.
That's I guess why everything I sell seems to be at a loss. Crazy like a fox, eh..............eh????????
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20 August 2021, 01:14 AM | #29 | |
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In the UK you'd be taxed on the gain only, not the whole amount and I'd imagine its the same in the USA.
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20 August 2021, 01:30 AM | #30 |
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I would think a grey flipper, unless he has a business license, business insurance and/or brick and mortar location, wouldn't declare anything. If you buy through eBay or Chrono24, they will tack on sales tax, but they don't know your basis in anything you sell.
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