When tax time comes what should I do?

Question

HI, I have a situation here : My relatives from overseas asked to buy a luxury car for them here i US and ship it to them, so I did. They deposited money to my US bank account ,then I took that money and bought and shipped that car over seas to my relatives. I did NOT earn any penny on it. When tax time comes what should I do? Thank-you!

Answer 1

You don't need to do anything. You made no profit on the deal so there is no tax due. Just make sure you have all of your records straight in the event any questions are asked about it. Statistically that won't happen, however.

Answer 2

I would be far less concerned about the IRS, and more concerned about Customs and the Homeland Security people.

You accepted a large sum of money from a foreign national, and then purchased and shipped a vehicle to a foreign country. While this is all innocent, and any person with half a brain would be able to understand the logic of what took place; you may be dealing with government agents who may not let logic interfere with there investigation.

As recommended earlier, but for the IRS; make sure you have the documentation of where the money came from, where you bought the car, and what you did in shipping it out of the country. A verifiable document showing the source of the money that your relatives sent you would also help, should you be questioned. Also, make sure you had all the paperwork that was needed filled out with regard to shipping the car out of the country. Find out if there were tariff's that should have been paid, that you may have overlooked.

Basically it is the old CYA.

Remember: Just because they say you are being paranoid - dosen't mean they aren't out to get you.

Answer 3

I would ignore the "transaction." Although there may be reportable sale, it is probably de minimis since you did not make any money in the process, and your income equalled your expense. I don't think the IRS would get too worked up over this unless they got a 1099 or something, and from the way it sounds, they probably won't.

Answer 4

Assuming you did not record a profit, this is not a taxable transaction. If anything, you may have experienced a loss which you should not report because it is a personal loss (not deductible)