Do I pay taxes on a gift?

[amelia21]

What is the name of your state? Texas
My mother gave me a ring years ago that she received from my dad. They have both died, and it turns out the ring is worth quite a bit of money. If I sell it, do I have to pay income taxes on the money I receive for it?

 

[Snipes5]

Yes, technically if you sell it you must pay taxes on the gain from the sale.

Your "basis" in the ring is its value on the date of death of whomever you inherited it from.

Snipes

 

[dallas702]

First, why would you even consider claiming the sale of your ring on your taxes? It is not part of an inherited estate. You own the ring. The IRS has no part of you selling it. Even cash gifts of up to $10,000 are not taxable.

Second, don't be surprised if (when) you get far less for the ring than you think its worth...probably 1/3 to 1/2 of its appraised value.

 

[Snipes5]

ALL income is taxable unless specifically excluded. Sale of a capital asset IS a taxable event.

I did notice it wasn't inherited though. The basis is whatever your mother paid for it.

A ring is a capital asset, and therefore its sale is taxable.

Snipes

 

[dallas702]

The ring is not a capital asset. It is personal property. It was a gift from a family member, and there is no way or need to establish value at the time it was given. The mother did not even pay for it because it came from dad. The sale of it is not income. OP already owns the value of the ring.

Snipes, do you work for the IRS? Don't you guys get tired of stealing from families?

 

[anteater]

The ring is not a capital asset. It is personal property. It was a gift from a family member, and there is no way or need to establish value at the time it was given. The mother did not even pay for it because it came from dad. The sale of it is not income. OP already owns the value of the ring.

Perhaps you could attempt to substantiate this drivel? Or, do you regualarly promote tax evasion?

 

[dallas702]

And those of you who want this person to pay taxes on her personal property are using what for credibility? She is not operating a business. The ring is not part of a taxable inheritance. It is her personal property given to her by her mother. What she does with it is her business. She already owns the ring, no matter what its value.

Are you geniuses suggesting that if she sells the ring for 1/2 of its appraised value she can write that off as a capital loss...even though the ring cost her nothing? Right.

Amelia;

If it is as you say, sell the ring if you wish, and enjoy your money. NONE of it belongs to the government or any other thief who tries to say it's not 100% yours. If I may ask, what is the appraised value?

 

[anteater]

And those of you who want this person to pay taxes on her personal property are using what for credibility? She is not operating a business. The ring is not part of a taxable inheritance. It is her personal property given to her by her mother. What she does with it is her business. She already owns the ring, no matter what its value.

Are you geniuses suggesting that if she sells the ring for 1/2 of its appraised value she can write that off as a capital loss...even though the ring cost her nothing? Right.

Amelia;

If it is as you say, sell the ring if you wish, and enjoy your money. NONE of it belongs to the government or any other thief who tries to say it's not 100% yours. If I may ask, what is the appraised value?

Amelia -- If dallas702 had said, "Chances are that nothing will ever happen if you do not report the sale", that would have been fine. But since he/she insists on blithering on:

Capital Assets
Almost everything you own and use for personal purposes or investment is a capital asset. For exceptions, see Noncapital Assets, later.

The following items are examples of capital assets.

Stocks and bonds.
A home owned and occupied by you and your family.
Timber grown on your home property or investment property, even if you make casual sales of the timber.
Household furnishings.
A car used for pleasure or commuting.
Coin or stamp collections.
Gems and jewelry.
Gold, silver, and other metals.

Personal-use property. Property held for personal use is a capital asset. Gain from a sale or exchange of that property is a capital gain. Loss from the sale or exchange of that property is not deductible. You can deduct a loss relating to personal-use property only if it results from a casualty or theft.

http://www.irs.gov/pub/irs-pdf/p544.pdf

 

[dallas702]

under your interpretation of the guidelines if I (or anyone) gave my son my car, or my watch, or some furniture...and then he later sold it for whatever it was worth, he'd have to pay taxes on that "income". Selling your own personal property doesn't constitute reportable "income".

Bulls*t!

You are wrong.

 

[anteater]

under your interpretation of the guidelines if I (or anyone) gave my son my car, or my watch, or some furniture...and then he later sold it for whatever it was worth, he'd have to pay taxes on that "income". Selling your own personal property doesn't constitute reportable "income".

Bulls*t!

You are wrong.

Interpretation, eh? IRS language seems pretty clear. Something about terms like "personal-use property," "household furnishings," or "car" that you have difficulty with?

Some people are put on earth to provide comic relief for the rest of us.

(Oh, hint, gifts and cost basis.)

 

[Snipes5]

Ooh, Ooh, I can take a hint!

If you give your son a used car for which you paid $10,000, and he sells it a year later for say, $8000, guess what rocket scientist, the $8000 is not taxable.

If, on the other hand you give him a beat-up Mustang, for which you paid $2000, and he restores it (costing him $1500) and sells it for say, $5000, then the taxable amount is the $1500 profit.

As my kids like to say, "duh".

 

[anteater]

But remember, Snipes, you work for the IRS and are a thief!!!

 

[Snipes5]

I am sure my employer would be entertained to know that, and so would the client I am representing at audit in a couple of weeks.

 

[dallas702]

And some of you will bend over for anything.

Anyone who claims the money received for selling their own personal property as income for tax purposes may as well just give everything to the government and wait for someone to come spoon some pablum into their mouth. NO one in his right mind would involve the IRS in the sale of their personal belongings...except maybe you sheep.

 

[bstoned]

I think we are dealing with an H & R Block rep!

So, snipes, you are a sale rep for the never to be wrong H & R Block. Big deal. If you're so important, how is it that you have some much excess time to drop trouser and show your flabby can?

Oops, I forgot Block doesn't start ripping seniors off till shortly after the first of the year! So, how many basic tax returns did you have to pump out for a ridiculously high fee to be qualified as a bonifided EA?

Go to bed and get your rest so can learn the sales script H & R Block crams down the throats of the victims of their crapola.

Golly gee, bet you have a "certificate of completion" from H & R Block framed and dangling from a string right next to your proof of being a member of AARP!

Thanks for the comedic material you post. You are laughable. Gonna get me are ya?!

Rather see ya than be ya!!