I checked in the search function and saw a thread pertaining to the change in issuing IRS 1099 for gun sales, from 2010.
a lot of water has passed under the bridge since then. Have the Tax laws changed now?
Hypothetically, if a person sold a collection through an auction house and netted $100,000, would there be a 1099 generated?
how does that get reported or does it?

curios how some of these high dollar items that sell at gun auctions get slammed with taxes or is there no reporting requirement.

1099's are not issued for the sales of tangible personal property.

The 2010 rules which would have required the reporting were part of Obamacare but were repealed by congress before they took effect after they were informed how unworkable and expensive they would be for business. Of all the stupid tax laws and regulations I've seen in my 43 years as a CPA this was the most profoundly stupid that could have been imagined. The record keeping would have been almost impossible for both small and large businesses because a 1099 would have to be sent to every vendor from whom ANY purchase was made.

Whether or not a 1099 is required or issued has no bearing on whether the taxpayer must report the income. People seem to think they can finesse income from gun sales (or other collectibles), but that's not the case.

Curl

Finesse income ? How about just saying f()k it, and not reporting it. Do you think for a second I'm going to report every gun sale I made to friends ? I see the same gun get sold two, three, four times at the club in the shotgun room and NO one has ever thought about reporting it. Give me a break.

Unfortunately, I usually sell my guns for less than I have in them, so no income no tax...Geo

Seems like I remember something about an exemption for a casual sale of personal property.

I’ve sold a fair number of guns at auction houses in the last four years. None has ever requested a SS# from me to date. No SS# would make it a bit difficult to report me on a 1099. Now that may change going forwards and I will decline to use those who want that information.

Here is the problem as I see it. The IRS clearly does not want people claiming hobby expenses as business expenses. In fact if you try it they will decline them and your losses will not be deductible. And those hobbies can include guns, wood working or horses. I’ve known people who tried to deduct those type expense and all got into trouble because of it. The gun person was told unless he had a FFL and a store front he could not claim his hobby was a business. So unless your income is involved with selling guns without a FFl to make a living I expect you will be fine.

Perhaps if you sold a vast collection they might catch you if you made large cash deposits. But selling a gun here or there is not worth it to them. And if you inherit that collection you should be fine as the estate would be where they try to get the money from.

Capt. Curl, "reporting income" should include the fact that the seller thinks he made a profit, am I OK so far? If the Service will accept a statement of profit, shouldn't they also accept a statement of expenses and initial cost? Should I include the profit from a lawn tractor that I sold in front of my house at a price higher than I paid for it? I think the original poster is asking whether anyone from the Service will come after us under present law if we sell a bunch of guns at an auction house. Now we know you are an attorney and may decide not to reply, but I hope you do.

I’m pretty sure the 1099 is provided to cover the AUCTION house, not the seller. Shows they have no basis or ownership in the sale.

It pays to keep good records if you are hiding capital gains in the gun safe.

The sales aren’t immune from use tax either.

Gains on gun sales are not that much of a risk these days. Just like antiques, gun values are lucky if they are holding steady. I recently settled an estate that was filled with antiques. The value of which was down about 40% from an appraisal from less than 12 years ago. Same person, did both but values were way down and they did not think that they would ever recover in some cases. Furniture, China, silverware, glassware were all down. Some Oriental rugs were up slightly but several were down. The appraiser saved thousands of dollars in estate taxes because the value was just not there anymore.

It’s the same thing for guns. A few may be way up but most are level or down from historical values. And we are running out of old men entering the gun collecting market. Less competition means less demand and less pressure for increasing values.

Technically you are susposed to report gains on sale of personal property. But you must be able to prove what you paid for them. Few keep records. Unless you are selling vast amounts of guns I doubt even the current IRS will get too picky. They might if they catch you playing other games and see deposits for items sold. But that’s a reason not to be stupid in the first place.

I am disappointed that we have not heard a reply from one poster who thinks we should give up to the Service, taxes on anything we sell at whatever profit. He may have been joking.

My Neighbor got pinched for selling several tractors FWIW
We also sold off a dairy herd that was entirely internally generated and paid capital gains tax minus the depletion allowance on every one of them

If you take a large collection to auction, I’d want proof of basis.

I live in a area with some large dairy farms, still making a go of it. Many have a collection of older: White, Case, I-H, M-F (that's Massey-Ferguson, for any of you Military types that are thinking "REMF" here- and many. many 1940-1960 era J-D 2 cylinder series. Some keep them for parts, some for sentiment, some for scrap iron--

One of my favorite of all these farms had a 1943 John Deere 2-lunger, either a B or an A series- believe it had a battery starter, besides the big exposed LH side flywheel starter- a bit rusty, but still running and doing a day's work on the farm. His late father bought it with the Gov't approval paperwork of the WW11 era for around $465.00 delivered. A "Collector" wanted it badly enough to pay him about 5 times that amount, cash folding money. Wowzer-- Do you think my friend declared a "Capital gain" and sent in a 1099 for to the Infernal Revenue Idiots with a check?? Not in a pig's patootie.. "Screw 'Em"!!!!

Ok Bill, your persistence pays off.

The Internal Revenue Code is long and involved. On top of that, it is explained and expanded by even more voluminous Treasury Regulations. I studied income tax, but I do not claim to be an expert. Nor am I an accountant. One thing I learned long ago was that, rather than researching the tax code or regulations, the easiest way to get an answer usually starts with an IRS Publication. Publication 17 is relatively comprehensive in its explanations of tax concepts and requirements. You can access it from the IRS website at this link:

Publication 17


What you are interested in can be found in Part Three, Gains and Losses, Chapter 14, Sale of Property (beginning on page 104). The table of contents contains hyperlinks that make it easy to access each chapter.

The specific information you seek begins on page 108 down in the bottom right corner under the heading, "Personal Use Property". I will leave it to you to read fully the matters discussed, but I will quote this part:

"Property held for personal use only, rather than
for investment, is a capital asset, and you must
report a gain from its sale as a capital gain.
However, you can’t deduct a loss from selling
personal use property."

So I stand by the statement I made in my post above. The letter of the law requires reporting income from the sale of your guns; and yes, even your lawnmower. No joke!

The degree to which there is compliance with this obligation raises questions outside the legal requirement. I suggest you consult your tax advisor or legal advisor for specific advice tailored to your personal situation.

As always, my best to you and Linda.

Curl