The kid said he had no choice but to sell, in order to avoid a stiff tax based on potential income from the sale of the ball. Why can't he just keep the ball and declare nothing. It seems unfair and unfounded for the IRS to assume the value of a tangible asset - it's only worth as much as somebody is willing to pay.
If he sells the ball to a family member, he can record the sale and avoid any taxes. Am I missing something here?
2007-08-22 05:02:24 · 3 answers · asked by elias_boston 1 in Business & Finance ➔ Taxes ➔ United States
The IRS hasn't said they're going to tax it unless it's sold, that was an announcement by one publicity-hound tax lawyer.
If the kid wants to sell it, that's his choice. When he does, taxes will be due.
2007-08-22 05:10:51 · answer #1 · answered by Judy 7 · 1⤊ 1⤋
Yes, you are missing something. Forget that it is a ball. When you sell something to a family member at less that FMV, the difference is a gift, which may or may not result in a taxable event.
Secondly, if you did sell an item to a family member at a bargain price, they could re-sell it and keep the proceeds. They wouldn't be yours.
2007-08-22 06:16:29 · answer #2 · answered by CPA/PFS 2 · 1⤊ 0⤋
The ball is going to be auctioned by Sotheby's making all other speculation meaningless
2007-08-22 08:28:34 · answer #3 · answered by Anonymous · 0⤊ 0⤋