The local IRS agent reads this news group and has made notes to look at your next year's tax return to see how you report this money!

Paul

On 2011-03-07, KD7HB wrote:
The local IRS agent reads this news group and has made notes to look
at your next year's tax return to see how you report this money!


Naturally, I report all my income.

i

On Mon, 7 Mar 2011 10:47:32 -0800 (PST), KD7HB
wrote:

Naturally.

Paul

That's the only way he can deduct all the toy^H^H^H legitimate
expenses. They have not yet figured out a way to tax you on the basis
of enjoyment.

On 2011-03-07, Spehro Pefhany wrote:
On Mon, 7 Mar 2011 10:47:32 -0800 (PST), KD7HB
wrote:

Naturally.

Paul

That's the only way he can deduct all the toy^H^H^H legitimate
expenses. They have not yet figured out a way to tax you on the basis
of enjoyment.


You are getting closer.

i

On 3/7/2011 11:15 AM, Spehro Pefhany wrote:

They have not yet figured out a way to tax you on the basis
of enjoyment.

Not that they aren't working on that...
The Beatles song, Tax Man, will be relevant for a long long time...


Jon

Spehro Pefhany wrote:
On Mon, 7 Mar 2011 10:47:32 -0800 (PST), KD7HB

Naturally.

That's the only way he can deduct all the toy^H^H^H legitimate
expenses. They have not yet figured out a way to tax you on the basis
of enjoyment.

I take it you don't drink alcohol, smoke tobacco, or dine at fine
restaurants. ;-)

Cheers!
Rich

Ignoramus1796 wrote:
On 2011-03-07, KD7HB wrote:
The local IRS agent reads this news group and has made notes to look
at your next year's tax return to see how you report this money!

Naturally, I report all my income.

We could solve all our taxation problems by replacing the income tax
with an outgo tax. Don't tax what people _earn_ (or steal, etc.), tax
them when they _SPEND_ it!

Buy a $10,000,000.00 mansion, pay $1,000,000.00 purchase tax.
Buy a $100,000.00 diamond necklace for the princess's coming out present,
pay $10,000.00 purchase tax.

Pay $6,000.00 for a designer suit, pay $600.00 purchase tax.
Pay $600.00 for a decent working suit, pay $60.00 purchase tax.
Pay sixty bucks for a passable suit at the Salvation Army thrift shop, pay
ZERO tax; grocery store food, medicine and medical supplies, and pre-owned
items would be exempt. (We might need a little discussion about used cars
and used houses.)

And this should appease the "tax the rich" crowd - if somebody spends
$500,000,000.00 on stock certificates, commodities futures, bonds, or
etc. on Wall Street, he pays $50,000,000.00 purchase tax. :-

But, of course, the fat cats (of both wings) will fight it tooth and nail,
because they wouldn't be able to evade it like they do now with the income
tax. When you write the boat store guy your check for $350,000.00 for the
custom Cigarette, it's a little hard to hide it; he collects the $35,000.00
purchase tax at the Point of Sale. :-

And it would encourage saving on the part of those of us who don't need much
stuff. :-)

Cheers!
Richard the Dreaded Libertarian

On Mon, 07 Mar 2011 13:02:17 -0800, Rich Grise
wrote:

Spehro Pefhany wrote:
On Mon, 7 Mar 2011 10:47:32 -0800 (PST), KD7HB

Naturally.

That's the only way he can deduct all the toy^H^H^H legitimate
expenses. They have not yet figured out a way to tax you on the basis
of enjoyment.

I take it you don't drink alcohol, smoke tobacco, or dine at fine
restaurants. ;-)

I pay the same tax whether I enjoy it or not.

On Mon, 07 Mar 2011 13:15:55 -0800, Rich Grise
wrote:

Ignoramus1796 wrote:
On 2011-03-07, KD7HB wrote:
The local IRS agent reads this news group and has made notes to look
at your next year's tax return to see how you report this money!

Naturally, I report all my income.

We could solve all our taxation problems by replacing the income tax
with an outgo tax. Don't tax what people _earn_ (or steal, etc.), tax
them when they _SPEND_ it!

Buy a $10,000,000.00 mansion, pay $1,000,000.00 purchase tax.
Buy a $100,000.00 diamond necklace for the princess's coming out present,
pay $10,000.00 purchase tax.

Pay $6,000.00 for a designer suit, pay $600.00 purchase tax.
Pay $600.00 for a decent working suit, pay $60.00 purchase tax.
Pay sixty bucks for a passable suit at the Salvation Army thrift shop, pay
ZERO tax; grocery store food, medicine and medical supplies, and pre-owned
items would be exempt. (We might need a little discussion about used cars
and used houses.)

And this should appease the "tax the rich" crowd - if somebody spends
$500,000,000.00 on stock certificates, commodities futures, bonds, or
etc. on Wall Street, he pays $50,000,000.00 purchase tax. :-

But, of course, the fat cats (of both wings) will fight it tooth and nail,
because they wouldn't be able to evade it like they do now with the income
tax. When you write the boat store guy your check for $350,000.00 for the
custom Cigarette, it's a little hard to hide it; he collects the $35,000.00
purchase tax at the Point of Sale. :-

And it would encourage saving on the part of those of us who don't need much
stuff. :-)

Tax poverty, I say. Whatever you tax you get less of, and who needs
more poor people?

Rich Grise wrote:

Ignoramus1796 wrote:
On 2011-03-07, KD7HB wrote:
The local IRS agent reads this news group and has made notes to look
at your next year's tax return to see how you report this money!

Naturally, I report all my income.

We could solve all our taxation problems by replacing the income tax
with an outgo tax. Don't tax what people _earn_ (or steal, etc.), tax
them when they _SPEND_ it!

Buy a $10,000,000.00 mansion, pay $1,000,000.00 purchase tax.
Buy a $100,000.00 diamond necklace for the princess's coming out present,
pay $10,000.00 purchase tax.

Pay $6,000.00 for a designer suit, pay $600.00 purchase tax.
Pay $600.00 for a decent working suit, pay $60.00 purchase tax.
Pay sixty bucks for a passable suit at the Salvation Army thrift shop, pay
ZERO tax; grocery store food, medicine and medical supplies, and pre-owned
items would be exempt. (We might need a little discussion about used cars
and used houses.)

And this should appease the "tax the rich" crowd - if somebody spends
$500,000,000.00 on stock certificates, commodities futures, bonds, or
etc. on Wall Street, he pays $50,000,000.00 purchase tax. :-

But, of course, the fat cats (of both wings) will fight it tooth and nail,
because they wouldn't be able to evade it like they do now with the income
tax. When you write the boat store guy your check for $350,000.00 for the
custom Cigarette, it's a little hard to hide it; he collects the $35,000.00
purchase tax at the Point of Sale. :-

And it would encourage saving on the part of those of us who don't need much
stuff. :-)

Cheers!
Richard the Dreaded Libertarian

Perhaps you haven't noticed that there are a few states left that do not
have a state income tax, only a sales tax. I for one favor a flat tax as
the only fair option. There is no excuse for taking a higher percentage
tax from those who are better off, someone making $10k and someone
making $10m should be paying the same percentage tax.

On 2011-03-07, Jon Elson wrote:
On 03/07/2011 03:15 PM, Rich Grise wrote:
Ignoramus1796 wrote:
On 2011-03-07, wrote:
The local IRS agent reads this news group and has made notes to look
at your next year's tax return to see how you report this money!

Naturally, I report all my income.

We could solve all our taxation problems by replacing the income tax
with an outgo tax. Don't tax what people _earn_ (or steal, etc.), tax
them when they _SPEND_ it!

Buy a $10,000,000.00 mansion, pay $1,000,000.00 purchase tax.
Buy a $100,000.00 diamond necklace for the princess's coming out present,
pay $10,000.00 purchase tax.


What about the grocery store that makes a 1% margin on sales? Or the
grocery wholesaler that makes a 2% margin on sales to the grocery?
Or the farm that makes a 5% margin on the food they grow?
Now, food prices will be inflated by 50% or more by government taxes.
(I'm sure it will really end up double or higher, I just can't think of
all the other middlemen right now.)

Rich needs to stop smoking what he is smoking, and when cannabis
effects finally recede, read about sales tax and VAT.

i

On 03/07/2011 03:15 PM, Rich Grise wrote:
Ignoramus1796 wrote:
On 2011-03-07, wrote:
The local IRS agent reads this news group and has made notes to look
at your next year's tax return to see how you report this money!

Naturally, I report all my income.

We could solve all our taxation problems by replacing the income tax
with an outgo tax. Don't tax what people _earn_ (or steal, etc.), tax
them when they _SPEND_ it!

Buy a $10,000,000.00 mansion, pay $1,000,000.00 purchase tax.
Buy a $100,000.00 diamond necklace for the princess's coming out present,
pay $10,000.00 purchase tax.


What about the grocery store that makes a 1% margin on sales? Or the
grocery wholesaler that makes a 2% margin on sales to the grocery?
Or the farm that makes a 5% margin on the food they grow?
Now, food prices will be inflated by 50% or more by government taxes.
(I'm sure it will really end up double or higher, I just can't think of
all the other middlemen right now.)


Jon

On 03/07/2011 12:22 PM, Ignoramus1796 wrote:
On 2011-03-07, wrote:
The local IRS agent reads this news group and has made notes to look
at your next year's tax return to see how you report this money!


Naturally, I report all my income.

i

But, now you qualify (if you didn't before) for the incredible
government giveaway called "exemption for business use of your home"
IRS form 8829.

Also, in Missouri (don't know about IL) they have incredible exemptions
on state use tax for anything that keeps a machine running or upgrades
it. So, a CNC conversion or retrofit of a dead control should be able
to be bought tax-free, assuming the original machine was capital
equipment. Also, drill bits, end mills, oil, etc. are tax-free.
I had to print out the relevant state tax commission rulings and read
them three times to believe what I was seeing.

I have no idea if other states have such a generous arrangement.

Jon

Jon Elson wrote:

On 03/07/2011 12:22 PM, Ignoramus1796 wrote:
On 2011-03-07, wrote:
The local IRS agent reads this news group and has made notes to look
at your next year's tax return to see how you report this money!


Naturally, I report all my income.

i

But, now you qualify (if you didn't before) for the incredible
government giveaway called "exemption for business use of your home"
IRS form 8829.

Also, in Missouri (don't know about IL) they have incredible exemptions
on state use tax for anything that keeps a machine running or upgrades
it. So, a CNC conversion or retrofit of a dead control should be able
to be bought tax-free, assuming the original machine was capital
equipment. Also, drill bits, end mills, oil, etc. are tax-free.
I had to print out the relevant state tax commission rulings and read
them three times to believe what I was seeing.

I have no idea if other states have such a generous arrangement.

Jon

You have to be careful of such seemingly good exemptions, since they may
end up getting you stuck paying business tax on your personal property.
Trying to explain that 5% of the use of your machines is for business
and 95% for personal enjoyment will confuse the hell out of any auditor
who already has no understanding of metalworking as a hobby. Just report
your miscellaneous income as general consulting income and be done with
it.

On Mon, 07 Mar 2011 13:15:55 -0800, Rich Grise
wrote:

Ignoramus1796 wrote:
On 2011-03-07, KD7HB wrote:
The local IRS agent reads this news group and has made notes to look
at your next year's tax return to see how you report this money!

Naturally, I report all my income.

We could solve all our taxation problems by replacing the income tax
with an outgo tax. Don't tax what people _earn_ (or steal, etc.), tax
them when they _SPEND_ it!

Buy a $10,000,000.00 mansion, pay $1,000,000.00 purchase tax.
Buy a $100,000.00 diamond necklace for the princess's coming out present,
pay $10,000.00 purchase tax.

Pay $6,000.00 for a designer suit, pay $600.00 purchase tax.
Pay $600.00 for a decent working suit, pay $60.00 purchase tax.
Pay sixty bucks for a passable suit at the Salvation Army thrift shop, pay
ZERO tax; grocery store food, medicine and medical supplies, and pre-owned
items would be exempt. (We might need a little discussion about used cars
and used houses.)

And this should appease the "tax the rich" crowd - if somebody spends
$500,000,000.00 on stock certificates, commodities futures, bonds, or
etc. on Wall Street, he pays $50,000,000.00 purchase tax. :-

But, of course, the fat cats (of both wings) will fight it tooth and nail,
because they wouldn't be able to evade it like they do now with the income
tax. When you write the boat store guy your check for $350,000.00 for the
custom Cigarette, it's a little hard to hide it; he collects the $35,000.00
purchase tax at the Point of Sale. :-

And it would encourage saving on the part of those of us who don't need much
stuff. :-)

Cheers!
Richard the Dreaded Libertarian

=========
The problem is that this consumption tax or VAT will be "in
addition to" rather than "in place of" the existing tax
structure. Also we already have state sales taxes at or
near 10% in many areas, and real estate taxes over a few
years can exceed the price of the home [excluding interest].

Another area that should be considered is a capital levy on
total net worth for high income/high worth individuals no
matter where their wealth is located nor what form it is in.
This would partially avoid tax dodging, cheating, avoidance
and evasion. IIRC Denmark has a 1% capital levy on personal
assets above a certain limit in addition to the usual VAT,
income, auto, etc. etc. taxes. Anybody on the group from
Denmark that can tell us how this is working?


-- Unka George (George McDuffee)
...............................
The past is a foreign country;
they do things differently there.
L. P. Hartley (1895-1972), British author.
The Go-Between, Prologue (1953).

Jon Elson wrote:
On 03/07/2011 12:22 PM, Ignoramus1796 wrote:
On 2011-03-07, wrote:
The local IRS agent reads this news group and has made notes to look
at your next year's tax return to see how you report this money!


Naturally, I report all my income.

i

But, now you qualify (if you didn't before) for the incredible
government giveaway called "exemption for business use of your home"
IRS form 8829.

Also, in Missouri (don't know about IL) they have incredible exemptions
on state use tax for anything that keeps a machine running or upgrades
it. So, a CNC conversion or retrofit of a dead control should be able to
be bought tax-free, assuming the original machine was capital equipment.
Also, drill bits, end mills, oil, etc. are tax-free.
I had to print out the relevant state tax commission rulings and read
them three times to believe what I was seeing.

I have no idea if other states have such a generous arrangement.

Jon


In PA if your are a manufacturer everything directly used in the process
of manufacturing is tax exempt.

John

On 2011-03-07, Jon Elson wrote:
On 03/07/2011 12:22 PM, Ignoramus1796 wrote:
On 2011-03-07, wrote:
The local IRS agent reads this news group and has made notes to look
at your next year's tax return to see how you report this money!


Naturally, I report all my income.

i

But, now you qualify (if you didn't before) for the incredible
government giveaway called "exemption for business use of your home"
IRS form 8829.

Also, in Missouri (don't know about IL) they have incredible exemptions
on state use tax for anything that keeps a machine running or upgrades
it. So, a CNC conversion or retrofit of a dead control should be able
to be bought tax-free, assuming the original machine was capital
equipment. Also, drill bits, end mills, oil, etc. are tax-free.
I had to print out the relevant state tax commission rulings and read
them three times to believe what I was seeing.

I have no idea if other states have such a generous arrangement.

Jon

I think that tax authorities would have a hard time proving that
business equipment and repairs thereof, is not for business, PROVIDED
that the business is profitable. A non-profitable busniess may be
classified as a hobby. But as long as you turn up a profit, I think
that writing off business equipment is what the tax system is designed
for.

i

On 2011-03-07, Pete C. wrote:

Jon Elson wrote:

On 03/07/2011 12:22 PM, Ignoramus1796 wrote:
On 2011-03-07, wrote:
The local IRS agent reads this news group and has made notes to look
at your next year's tax return to see how you report this money!


Naturally, I report all my income.

i

But, now you qualify (if you didn't before) for the incredible
government giveaway called "exemption for business use of your home"
IRS form 8829.

Also, in Missouri (don't know about IL) they have incredible exemptions
on state use tax for anything that keeps a machine running or upgrades
it. So, a CNC conversion or retrofit of a dead control should be able
to be bought tax-free, assuming the original machine was capital
equipment. Also, drill bits, end mills, oil, etc. are tax-free.
I had to print out the relevant state tax commission rulings and read
them three times to believe what I was seeing.

I have no idea if other states have such a generous arrangement.

Jon

You have to be careful of such seemingly good exemptions, since they may
end up getting you stuck paying business tax on your personal property.
Trying to explain that 5% of the use of your machines is for business
and 95% for personal enjoyment will confuse the hell out of any auditor
who already has no understanding of metalworking as a hobby. Just report
your miscellaneous income as general consulting income and be done with
it.

I would not touch that business use of home exemption, with a 10 foot
pole.

i

Ignoramus1796 wrote:
On 2011-03-07, Jon Elson wrote:
On 03/07/2011 12:22 PM, Ignoramus1796 wrote:
On 2011-03-07, wrote:
The local IRS agent reads this news group and has made notes to look
at your next year's tax return to see how you report this money!


Naturally, I report all my income.

i

But, now you qualify (if you didn't before) for the incredible
government giveaway called "exemption for business use of your home"
IRS form 8829.

Also, in Missouri (don't know about IL) they have incredible exemptions
on state use tax for anything that keeps a machine running or upgrades
it. So, a CNC conversion or retrofit of a dead control should be able
to be bought tax-free, assuming the original machine was capital
equipment. Also, drill bits, end mills, oil, etc. are tax-free.
I had to print out the relevant state tax commission rulings and read
them three times to believe what I was seeing.

I have no idea if other states have such a generous arrangement.

Jon

I think that tax authorities would have a hard time proving that
business equipment and repairs thereof, is not for business, PROVIDED
that the business is profitable. A non-profitable busniess may be
classified as a hobby. But as long as you turn up a profit, I think
that writing off business equipment is what the tax system is designed
for.

Are banks and GM hobbies?

On 2011-03-08, Cydrome Leader wrote:
Ignoramus1796 wrote:
On 2011-03-07, Jon Elson wrote:
On 03/07/2011 12:22 PM, Ignoramus1796 wrote:
On 2011-03-07, wrote:
The local IRS agent reads this news group and has made notes to look
at your next year's tax return to see how you report this money!


Naturally, I report all my income.

i

But, now you qualify (if you didn't before) for the incredible
government giveaway called "exemption for business use of your home"
IRS form 8829.

Also, in Missouri (don't know about IL) they have incredible exemptions
on state use tax for anything that keeps a machine running or upgrades
it. So, a CNC conversion or retrofit of a dead control should be able
to be bought tax-free, assuming the original machine was capital
equipment. Also, drill bits, end mills, oil, etc. are tax-free.
I had to print out the relevant state tax commission rulings and read
them three times to believe what I was seeing.

I have no idea if other states have such a generous arrangement.

Jon

I think that tax authorities would have a hard time proving that
business equipment and repairs thereof, is not for business, PROVIDED
that the business is profitable. A non-profitable busniess may be
classified as a hobby. But as long as you turn up a profit, I think
that writing off business equipment is what the tax system is designed
for.

Are banks and GM hobbies?

Since GM is not an individual nor an S corporation, the hobby income
rule does not apply to it.

If GM was ran out of one person's garage, and was not profitable for
several years in a row, arguably it could be classified as a hobby.

http://www.irs.gov/newsroom/article/...169490,00.html

``The IRS presumes that an activity is carried on for profit if it
makes a profit during at least three of the last five tax years,
including the current year...''

i

Ignoramus1796 wrote:



I would not touch that business use of home exemption, with a 10 foot
pole.
Well, you need to be careful of claiming the business exemption for
occasional small jobs. But, I don't see a downside. You have to calculate
the percentage area used for the business, it has to be mostly used for
business (again, calculate percentage of time) and you need to have proper
records. I am running a manufacturing business with two lines of products,
one sold to end users (the CNC machine stuff) and another sold to national
labs and universities. I have facilities to machine parts (CNC mill and
manual lathe), sheet metal shear and brake, and assemble circuit boards,
plus some gear used to make essentially fixtures for the circuit board
assembly. So, this stuff doesn't look very hobby-like, I sell over the web
and by purchase order.

I've been doing this, with several product lines, since 1986, and got
professional advice when I set it up. There have been quite a number of
years where I didn't make a "profit" the way the IRS calculates it. When
you lop off ALL those exemptions, depreciation, home use, car mileage,
advertising, shipping, phones, equipment upgrades, and so on, it is easy to
turn what I would initially think was a profitable year into a loss year!
Well, no taxes that year, who am I to complain!

So, they don't seem to be real strict at all with the 3 out of 5 years
profit rule. There are limits to the deductions and such when you don't
turn a profit that year, though. But, I've NEVER had the slightest hint of
trouble doing this. The state audited me about ten years ago because I
claimed a refund when the state supreme court ruled that the director of
revenue was collecting a tax improperly. The auditor came out, reviewed my
books, and told me that I had been paying tax on some stuff that I
shouldn't have, mostly lumping shipping with parts ordered and consumed
rather than sold.

So, at least so far, I think I'm doing it all right.

Jon

Mention was made that three out of five previous years had to be profitable.
When I was in business, horse breeding and mining and a third, IIRC, were
only two out of five. Of course the IRS codes change with the relative
humidity, so who knows now.

But, knowing deductions, and knowing them well can be berry berry profitable
to a taxpayer. You just have to know the ropes, tapdance inside the lines,
and keep damn good records.

And stay away from the gray areas that they seem to be sensitive about.

We came out smelling like a rose this year.

Steve, no sig. You guys know where to get a book if you want one.

"Pete C." wrote in message
ster.com...
snip-
Perhaps you haven't noticed that there are a few states left that do not
have a state income tax, only a sales tax. I for one favor a flat tax as
the only fair option. There is no excuse for taking a higher percentage
tax from those who are better off, someone making $10k and someone
making $10m should be paying the same percentage tax.

Welcome to the good ol' USA, where doing the right thing is punished, and
being a deadbeat is rewarded.

That's the way we work here----it's a punitive system.

Harold

"Steve Ackman" wrote in message
...
In .com, on Mon, 07 Mar
2011 16:15:52 -0600, Pete C., wrote:

Perhaps you haven't noticed that there are a few states left that do not
have a state income tax, only a sales tax.

And at least one (or two) that have neither state
income tax nor sales tax (but property taxes a little
higher than average).

I for one favor a flat tax as the only fair option.

Sales tax pretty much qualifies. User fees may
be the only thing higher on the fairness scale.
Gasoline tax used for building/maintaining highways.
That sort of thing.

There is no excuse for taking a higher percentage
tax from those who are better off, someone making $10k and someone
making $10m should be paying the same percentage tax.

Ayup.

Bull****, the ultra rich will only continue to accumulate money--if for no
other reason then because of mental illness and neurosis

Let too much fall into their hands and since they already have WAY more than
enought to meet basic needs, they simply "re-invest" in a manner that
"produces" more cash for themselves via the fractional reserve depostit bank
system..the result is that government is starved of cash due to reduced
revenue and inflation for the middle class keeps going up while their wages
remain stagnant.

Put another way :

--if a decade worth of reducing taxes for the rich has indeed produced new
jobs, then where exactly have all of these supposed newly-created jobs gone
to then ?

On Wed, 9 Mar 2011 21:55:26 -0700, Steve Ackman
wrote:

In .com, on Mon, 07 Mar
2011 16:15:52 -0600, Pete C., wrote:

Perhaps you haven't noticed that there are a few states left that do not
have a state income tax, only a sales tax.

And at least one (or two) that have neither state
income tax nor sales tax (but property taxes a little
higher than average).

Oregon has a nasty, gouging income tax but no sales tax.


I for one favor a flat tax as the only fair option.

Sales tax pretty much qualifies. User fees may
be the only thing higher on the fairness scale.
Gasoline tax used for building/maintaining highways.
That sort of thing.

There is no excuse for taking a higher percentage
tax from those who are better off, someone making $10k and someone
making $10m should be paying the same percentage tax.

Ayup.

Agreed.

--
Life is full of obstacle illusions.
-- Grant Frazier

"Larry Jaques" wrote in message
...
On Wed, 9 Mar 2011 21:55:26 -0700, Steve Ackman
wrote:

In .com, on Mon, 07 Mar
2011 16:15:52 -0600, Pete C., wrote:

Perhaps you haven't noticed that there are a few states left that do not
have a state income tax, only a sales tax.

And at least one (or two) that have neither state
income tax nor sales tax (but property taxes a little
higher than average).

Oregon has a nasty, gouging income tax but no sales tax.



Tell me about it...

I spent nearly 2 decades working there but living in Wa.

What galled me especially was the ones that had moved to Wa to avoid paying
taxes for their auto license and to escape property taxes and also always
holding up the grocery line by claiming tax free status by presenting their
oregon ID.

Put em all onto a bus back to California or mexico let them sort it out
there is what I say.