Do you collect something, like coins, stamps, or baseball cards? If so, this article will help you with your taxes. A little planning and positioning can go a long way toward increasing your profits.
The collectibles sections of the tax law include rules that can trash all your deductions. Conversely, some rules can increase your profits. Your profits hinge on the rules you know and use.
When you know the rules, you can make adjustments. Sometimes the adjustments are easy; at other times, they require rethinking the collectibles activity. This article will give you the rules you need to know to make the adjustments you want to make.
Your collectibles activity—say, baseball card collecting—can fall into one of four categories, each with a different tax treatment. When you get a different tax treatment, you also get a different bottom line. This article explains when your collectibles activities fall into one of the four following activities:
1.
The hobby category (this is the most undesirable category and can cost you a lot of money).
2.
The investor category (this is better than the hobby category, but not nearly as desirable as the next category).
3.
The for-profit trader-type business activity category (this is the very best place to be if you are making money on your collectibles activity).
4.
The dealer-activity category (this is the very best place to be if you are losing money on your collectibles activity).
You have more things to consider in a collectibles activity than with an investment in stocks. With stocks, ... Log in to view full article.
