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Collection Sale and the IRS


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When selling a collection in part or in whole, and a payment of $10k or more is received, it’s my understanding that the bank needs to notify the IRS. There could be a profit, it could be a break even, or I could lose my butt. My age and health may dictate a sale quicker than I like. How do you handle this? Thanks in advance!

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When my former FFL/SOT sold a Type 99 LMG on my behalf, I made up a spreadsheet showing my profit and all expenses. I then paid Capital Gains taxes, Federal and State, on the profit. 

It sucks but you ain't gonna hide a big assed check from the government. Caesar wants his share of the good. 

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banks need to fill out a form if 10k+ of cash is deposited.  if you break it up into smaller deposits to circumvent that, that's considered structuring which is also illegal and attract more attention. 

big checks don't automatically flag any tax forms as far as i know, however in the event of an audit it will certainly attract further review.

MontanaRenegade86 did what i would do, document the acquisition cost, disposition cost and any expenses in the meantime to minimize your capital gains exposure. 

if you have heirs you want to leave it to, it would be better tax-wise to leave it to them to deal with after you pass.  they will get it at the stepped up basis for tax purposes and not owe a lot of capital gains taxes if they dispose of it soon after you leave it.  consult your cpa or tax professional on that.

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