Quote:
Originally Posted by raiderguy10
I am saying that if it is personal use property. I am NOT saying that if it is a hobby. Because of the limitations mentioned above, hobby expenses most of the time are not deductible. And you also cannot generate a loss from a hobby. So you basically have 4 options to figure out what your income is:
1) Personal use - capital gain/loss. Can't claim a loss, and hardly ever can generate a gain. Cards/Memorabilia are not personal use property, but personal use property was asked about earlier in the thread so I addressed it here
2) Hobby - claim all income. Losses are itemized and can only take them if 1) you file schedule A and itemize your deductions, and 2) your hobby expenses exceed 2% of your AGI. Also cannot generate a loss, so you can only claim expenses up to hobby income earned.
3) Business - Report all gains/losses on schedule C. No income/loss limitations for business
4) Investment - Gain/losses are capital gains. Capital gains get preferential tax treatment (15% maximium tax rate) and losses can be deducted $3,000 in the current year and anything above that needs to be carried forward to future years (after being netted with other capital gains/losses)
|
Got it! That really helps, thanks! So, if I only generate MAYBE 1-2K per year, but spend probably twice that if not more, which category would you suggest? I definitely buy more than I sell & really only sell to help with the funds to buy more.