2. misc-audio
  3. 126811-2278

Potential Tax Liability

I have a friend who inherited many electronic items including those of the audiophile variety. Through ads on this site and others, he sold about $60k worth of equipment within this year.   He is not a dealer and does not have a business, either physically or on paper.  Most of the payment transactions were made through PayPal. He is now worried about potential tax liability. Sometimes he created invoices. Sometimes the money was sent through PayPal's "Friends and Family" option. The money was transferred from PayPal to his bank account periodically. It suddenly occurred to him about possibly having a tax liability.    Made me curious too.   Would these proceeds need to be declared as income to the IRS?
kodak805
almarg's avatar
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almarg
8,673 posts
 
If it’s used than tax had already been paid and double-jeopardy will make no sense.
Not sure if you are referring to sales tax that may have been collected by the original dealer from the original purchaser, or to income tax that may have been paid by the original dealer based on his profit from the sale. But neither is relevant to the question.
...you can even claim losses out of this sale endeavor.
Yes, as I mentioned in my initial post that is a possibility, within certain limitations.

Regards,
-- Al

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warmglowingtubesart
29 posts
 
"Double jeopardy", which comes from the Fifth Amendment, applies to CRIMINAL prosecutions and punishments only. It has absolutely no relevance to any civil law matter, such as civil tax matters.  All courts throughout U.S. history have always so found.
   Any attempt to apply this concept to a civil tax matter is 100% nonsense.
---Steve
czarivey
4,494 posts
 
Well, Steve, Yes if only get down to Bill of Rights as a stereotype, "Double Jeopardy" applies to prosecutions and punishments only, but if you get out of stereotypes and look around farther and broad, than such meaning easily fall onto the common sense I've mentioned. 


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