Aircraft tax question [Archive]

Ron Rosenfeld

November 13th 05, 04:47 AM

On Sun, 13 Nov 2005 02:35:13 GMT, George Patterson >
wrote:

>Ok, I know we have some tax experts out there. Tell me. When you sell an
>aircraft, what taxes apply to the seller? Is this a capital gains/loss
>situation? We're talking about an aircraft owned by and registered to a private
>individual and used for pleasure.
>
>George Patterson
> Drink is the curse of the land. It makes you quarrel with your neighbor.
> It makes you shoot at your landlord. And it makes you miss him.

Your 1/2 right. My understanding is that the gain on a sale of an asset
held for personal use is includable in your income; however, any loss is
not deductible, except in the case of casualty or theft.

:-((

Don't forget that it is only the gain that is taxed. That is the
difference between your net receipts on the sale less the basis.
Calculating the basis may or may not be tricky, and, depending on your
situation, may warrant a discussion with someone who knows what he or she
is talking about :-))

Ron (EPM) (N5843Q, Mooney M20E) (CP, ASEL, ASES, IA)

Mike Rapoport

November 13th 05, 04:51 AM

You don't factor in depreciation unless you depreciated it for tax purposes.

Mike
MU-2

"BTIZ" > wrote in message
news:Wzydf.769$7A.758@fed1read04...
> ok... I'm not a tax expert... but when you sell a car.. what taxes apply
> to the seller..
> is it a capital gains or loss.. if you intend to take a capital gain/loss
> be sure to factor in depreciation
>
> I can't ever imagine it being a gain, unless it's an antique bird that has
> really appreciated in value..
>
> the buyer pays all sales taxes..
> BT
>
> "George Patterson" > wrote in message
> news:BDxdf.1644$Pa4.1059@trndny01...
>> Ok, I know we have some tax experts out there. Tell me. When you sell an
>> aircraft, what taxes apply to the seller? Is this a capital gains/loss
>> situation? We're talking about an aircraft owned by and registered to a
>> private individual and used for pleasure.
>>
>> George Patterson
>> Drink is the curse of the land. It makes you quarrel with your
>> neighbor.
>> It makes you shoot at your landlord. And it makes you miss him.
>
>

Peter R.

November 13th 05, 05:01 AM

George Patterson > wrote:

> Ok, I know we have some tax experts out there. Tell me. When you sell an
> aircraft, what taxes apply to the seller? Is this a capital gains/loss
> situation? We're talking about an aircraft owned by and registered to a private
> individual and used for pleasure.

I cannot imagine any US federal tax scenarios applying in this case unless
the aircraft was depreciated. Normally that doesn't happen unless the
aircraft is flown for some business purpose.

--
Peter
Not a tax accountant but uses an aircraft for business and depreciates it.

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Mike Rapoport

November 13th 05, 05:05 AM

"George Patterson" > wrote in message
news:BDxdf.1644$Pa4.1059@trndny01...
> Ok, I know we have some tax experts out there. Tell me. When you sell an
> aircraft, what taxes apply to the seller? Is this a capital gains/loss
> situation? We're talking about an aircraft owned by and registered to a
> private individual and used for pleasure.
>
> George Patterson
> Drink is the curse of the land. It makes you quarrel with your
> neighbor.
> It makes you shoot at your landlord. And it makes you miss him.

If you did not expense the costs of flying and did not depreciate it, I
would be inclined to leave it off your tax return. Figuring out your cost
basis after years of ownership would be very difficult if not impossible.
You can't deduct the loss on sale as that loss would be attributed to your
(personal, pleasure) use. I would just figure that the basis was equal to
the sale price, which is probably true anyway after you figure out what you
spent over the years on upgrading. Now if you bought a P51 in 1970 for 10K
and it sat in your barn until you sole it yesterday for a $990K gain, that
might be different. The only aircraft that I have sold were used for
business and the cost basis was easy to determine. I ended up recapturing
the depreciation as a gain.

Mike
MU-2

N93332

November 13th 05, 06:54 AM

"Ron Rosenfeld" > wrote in message
...
> Don't forget that it is only the gain that is taxed. That is the
> difference between your net receipts on the sale less the basis.
> Calculating the basis may or may not be tricky, and, depending on your
> situation, may warrant a discussion with someone who knows what he or she
> is talking about :-))

I agree, talk with someone that knows about this stuff...

My aircraft could possibly be sold for about $5-10k more than I purchased it
a few years ago. Personally, I wouldn't claim the capital gain of all $5-10k
and would figure out what all (money-wise) I have put into it to calculate
the cost basis.

TaxSrv

November 13th 05, 01:30 PM

"Mike Rapoport" wrote:
> Figuring out your cost basis after years of ownership
> would be very difficult if not impossible.

Not necessarily at all. Basis is simply original cost, plus only
capital expenditures. Latter typically is engine and/or prop,
major overhaul or new. Add amounts spent for avionics plus
additional panel instrumentation, not mere replacements. Subtract
avionics ripped out and sold, removing the sales price, like on
eBay. Paint is never a capital item, but an interior would be if a
significant improvement, like leather replacing cloth or ugly
factory design.

An abnormal case, but mine was $12K new in 1977; so say sold now
for $30K. Avionics items about $5K years ago on a mental tally.
Interior job don't count; it was essentially repair replacement.
So I have a guess $13K taxable gain, at a low capital gain rate. I
need then to dig out the actual avionics invoices, which I should
have in a fat file folder, or list from memory where need be. A
good-faith estimate for basis items can go on a 1040; if audited,
discuss then without much fuss.

If a loss on a personal use aircraft, nothing is reported to IRS,
as it is net gain, not sales price which is reported on 1040 Sch D.

Fred F.

Matt Whiting

November 13th 05, 01:43 PM

George Patterson wrote:

> BTIZ wrote:
>
>> ok... I'm not a tax expert... but when you sell a car.. what taxes
>> apply to the seller..
>
>
> According to the IRS, the selling price of the car is taxed as income. I
> would prefer that that is not the case with aircraft.

Well, it has been a while since I read the tax code, but I believe this
is true only if you sell the car for more than you paid for it. This is
very unlikely with most cars...

Matt

Mike Rapoport

November 13th 05, 05:14 PM

"TaxSrv" > wrote in message
...
> "Mike Rapoport" wrote:
>> Figuring out your cost basis after years of ownership
>> would be very difficult if not impossible.
>
> Not necessarily at all. Basis is simply original cost, plus only
> capital expenditures. Latter typically is engine and/or prop,
> major overhaul or new. Add amounts spent for avionics plus
> additional panel instrumentation, not mere replacements. Subtract
> avionics ripped out and sold, removing the sales price, like on
> eBay. Paint is never a capital item, but an interior would be if a
> significant improvement, like leather replacing cloth or ugly
> factory design.
>
> An abnormal case, but mine was $12K new in 1977; so say sold now
> for $30K. Avionics items about $5K years ago on a mental tally.
> Interior job don't count; it was essentially repair replacement.
> So I have a guess $13K taxable gain, at a low capital gain rate. I
> need then to dig out the actual avionics invoices, which I should
> have in a fat file folder, or list from memory where need be. A
> good-faith estimate for basis items can go on a 1040; if audited,
> discuss then without much fuss.
>
> If a loss on a personal use aircraft, nothing is reported to IRS,
> as it is net gain, not sales price which is reported on 1040 Sch D.
>
> Fred F.
>

I see the following problems/ambiguities with your method:

I would definately add paint to the basis, particularly if it was done
recently. It definately adds value to the airplane.

How much of the upgraded avionics value was "consumed" during your
ownership? Normally one would depreciate the avionics and have a basis for
them, but is is fair to add the entire avionics cost to the airplane's basis
if the avionics were added 15yrs and 2000hrs ago?

If, the day before I sell the airplane, I replace the autopilot servos that
were 15yrs old when I bought the airplane and 20yrs old now, does that add
to the basis?

If, when the airplane was purchased, all the bushings in the landing gear
pivots were worn out and replaced at the buyers expense, shouldn't that be
factored into the basis? If the seller had replace the bushings and
increased the price by the cost to do so, the basis would be higher.

If you purchased the airplane with a crappy interior and it is like new now
then clearly you should add some of that cost to the basis but how much?

If you bought the airplane with a run out engine and overhauled the engine
for $10K and TBO is 2000hrs and you have put 1000hrs on the engine, what
should you do to the airplanes basis? If you just pro-rate you get $5K
What if you had to do a top overhaul for $5K at 900hrs?

All these things are easy if the airplane was used for business and all
expenses were either expensed or capitalized and depreciated leading to an
unambigous basis. A used airplane is actually a collection of used parts in
variour stages of wearing out. After owning an airplane for multiple years
it is impossible to calculate what the true basis should be unless you know
what the life limits of each part are. The airplanes I have sold were, in
most ways, newer than when I bought them

I think that there is so much ambiguity here that reasonable arguments could
be made that there is no gain on sale in the vast majority of cases. In the
case of the airplane that would sell for more than new, clearly there is a
gain if it was purchased new and the total of any improvements was less than
the increase in value.

Mike
MU-2

TaxSrv

November 13th 05, 06:17 PM

"Mike Rapoport" wrote:
>
> I would definately add paint to the basis, particularly if it
> was done recently. It definately adds value to the airplane.

The IRS has long ago ruled that paint on anything is not capital.
If a very fresh paint, one might argue on the concept of "fixing-up
expenses," if done after the intent to promptly sell was formed.

> How much of the upgraded avionics value was "consumed" during
your
> ownership? Normally one would depreciate the avionics and have a
basis for
> them, but is is fair to add the entire avionics cost to the
airplane's basis
> if the avionics were added 15yrs and 2000hrs ago?

Under long held principles of tax law -- yes. Add avionics from day
one to basis, even if a box is ripped out and sold on eBay for $1.
Even if gone thru 3 comms, trading in the old one each time.

> If, the day before I sell the airplane, I replace the autopilot
servos that
> were 15yrs old when I bought the airplane and 20yrs old now, does
that add
> to the basis?

Depends if a repair was called for. Doesn't matter when done;
repairs do not add to basis. Else, a possible fixing up expense if
for purpose of sale. Don't know why somebody would replace working
servos just to better sell it, unless owner is an A&P maybe.

> If, when the airplane was purchased, all the bushings in the
landing gear
> pivots were worn out and replaced at the buyers expense,
shouldn't that
> be factored into the basis?

No, it's a repair.

> If you bought the airplane with a run out engine and overhauled
the engine
> for $10K and TBO is 2000hrs and you have put 1000hrs on the
engine, what
> should you do to the airplanes basis? If you just pro-rate you
get $5K

We don't prorate nuthin'. Even if you put 6,000 hours on the
plane, and did three majors at 2,000 hrs each, under tax law your
basis reflects a 4-engine airplane with one prop.

> What if you had to do a top overhaul for $5K at 900hrs?

Sounds like a repair to me at only 900 on 2,000 TBO. No effect on
basis.

> All these things are easy if the airplane was used for business
> and all expenses were either expensed or capitalized and
> depreciated leading to an unambigous basis.

No, the rules on what is capital vs. repair do not change, personal
or business asset. Tax law merely says no depreciation allowed for
personal use portion, including100% personal.

> I think that there is so much ambiguity here.

No, it's very simple for a personal asset, because we don't worry
about the complexities of computing depreciation. For a personal
asset, you may capitalize basically big items not in the nature of
usual repairs. Except paint, which is a repair too.

Fred F.

Ron Natalie

November 13th 05, 07:08 PM

BTIZ wrote:
> ok... I'm not a tax expert... but when you sell a car.. what taxes apply to
> the seller..
> is it a capital gains or loss.. if you intend to take a capital gain/loss be
> sure to factor in depreciation
>
> I can't ever imagine it being a gain, unless it's an antique bird that has
> really appreciated in value..
>

You only have to worry about depreciation that was deducted (if you used
it for business). Otherwise your gain is the sales price (less any
expenses involved in the sale) less the purchase price less any capital
improvements you made to the aircraft.

If you've held the aircraft for more than a year you owe 15% of the
gain.

Ron Natalie

November 13th 05, 07:09 PM

George Patterson wrote:
> BTIZ wrote:
>> ok... I'm not a tax expert... but when you sell a car.. what taxes
>> apply to the seller..
>
> According to the IRS, the selling price of the car is taxed as income. I
> would prefer that that is not the case with aircraft.
>
It's not the case with either the car or the aircraft which the IRS
treats the same. The taxable gain is the difference between the
sales price and the basis (essentially what you paid for it). Car's
rarely appreciate.

George Patterson

November 13th 05, 08:35 PM

TaxSrv wrote:

> Not necessarily at all. Basis is simply original cost, plus only
> capital expenditures. Latter typically is engine and/or prop,
> major overhaul or new. Add amounts spent for avionics plus
> additional panel instrumentation, not mere replacements. Subtract
> avionics ripped out and sold, removing the sales price, like on
> eBay. Paint is never a capital item, but an interior would be if a
> significant improvement, like leather replacing cloth or ugly
> factory design.
> If a loss on a personal use aircraft, nothing is reported to IRS,
> as it is net gain, not sales price which is reported on 1040 Sch D.

Thanks. I had hoped that would be the case.

George Patterson
Drink is the curse of the land. It makes you quarrel with your neighbor.
It makes you shoot at your landlord. And it makes you miss him.

Matt Whiting

November 13th 05, 09:06 PM

Mike Rapoport wrote:

> "TaxSrv" > wrote in message
> ...
>
>>"Mike Rapoport" wrote:
>>
>>> Figuring out your cost basis after years of ownership
>>>would be very difficult if not impossible.
>>
>>Not necessarily at all. Basis is simply original cost, plus only
>>capital expenditures. Latter typically is engine and/or prop,
>>major overhaul or new. Add amounts spent for avionics plus
>>additional panel instrumentation, not mere replacements. Subtract
>>avionics ripped out and sold, removing the sales price, like on
>>eBay. Paint is never a capital item, but an interior would be if a
>>significant improvement, like leather replacing cloth or ugly
>>factory design.
>>
>>An abnormal case, but mine was $12K new in 1977; so say sold now
>>for $30K. Avionics items about $5K years ago on a mental tally.
>>Interior job don't count; it was essentially repair replacement.
>>So I have a guess $13K taxable gain, at a low capital gain rate. I
>>need then to dig out the actual avionics invoices, which I should
>>have in a fat file folder, or list from memory where need be. A
>>good-faith estimate for basis items can go on a 1040; if audited,
>>discuss then without much fuss.
>>
>>If a loss on a personal use aircraft, nothing is reported to IRS,
>>as it is net gain, not sales price which is reported on 1040 Sch D.
>>
>>Fred F.
>>
>
>
> I see the following problems/ambiguities with your method:
>
> I would definately add paint to the basis, particularly if it was done
> recently. It definately adds value to the airplane.

I'm not a tax expert, but from what I understand, paint would definitely
be considered maintenance rather than a capital improvement. I believe
the basic rule is pretty simple: are you bringing the asset back to a
state in which it formerly existed or are you taking it to a "better"
state? If the airplane came from the factory with good paint, then
painting it is simply restoring it to its previous condition and thus is
a repair and not an improvement. Now a high-end custom mural airbrush
paint job could probably legimately be argued to be a capital
improvement. :-)

> How much of the upgraded avionics value was "consumed" during your
> ownership? Normally one would depreciate the avionics and have a basis for
> them, but is is fair to add the entire avionics cost to the airplane's basis
> if the avionics were added 15yrs and 2000hrs ago?

But depreciation assumes business use for the asset, right?

> If, the day before I sell the airplane, I replace the autopilot servos that
> were 15yrs old when I bought the airplane and 20yrs old now, does that add
> to the basis?

I suspect that would be a hrad sell unless the servos add some
substantial new features. If they simply replicate the
performance/features of the original servos, then I could see the IRS
determining this to be a repair.

> If, when the airplane was purchased, all the bushings in the landing gear
> pivots were worn out and replaced at the buyers expense, shouldn't that be
> factored into the basis? If the seller had replace the bushings and
> increased the price by the cost to do so, the basis would be higher.

Again, I'd say this is a repair. It is like putting new siding on your
house or replacing your shingles or your water heater.

> If you purchased the airplane with a crappy interior and it is like new now
> then clearly you should add some of that cost to the basis but how much?

Only what went beyond the original. If it came with cloth seats and you
replace with leather, then I think you could argue a basis increase. If
you simply replace with new cloth, then I think the basis remains the same.

> If you bought the airplane with a run out engine and overhauled the engine
> for $10K and TBO is 2000hrs and you have put 1000hrs on the engine, what
> should you do to the airplanes basis? If you just pro-rate you get $5K
> What if you had to do a top overhaul for $5K at 900hrs?

Good question. Again, seems like a repair under the standard IRS rules,
but given the extreme cost of repairs on an airplane, maybe there is a
different treatment allowed for things like overhauls.

> All these things are easy if the airplane was used for business and all
> expenses were either expensed or capitalized and depreciated leading to an
> unambigous basis. A used airplane is actually a collection of used parts in
> variour stages of wearing out. After owning an airplane for multiple years
> it is impossible to calculate what the true basis should be unless you know
> what the life limits of each part are. The airplanes I have sold were, in
> most ways, newer than when I bought them
>
> I think that there is so much ambiguity here that reasonable arguments could
> be made that there is no gain on sale in the vast majority of cases. In the
> case of the airplane that would sell for more than new, clearly there is a
> gain if it was purchased new and the total of any improvements was less than
> the increase in value.

Yes, I guess it probably comes down to who your auditor is and how
persuasive you or your lawyer are. :-)

I've never yet had the pleasure of an IRS audit, so I have no idea how
the typical auditor is with respect to logical arguments.

Matt

Ron Natalie

November 13th 05, 09:41 PM

Mike Rapoport wrote:

Paint generally counts only when done IMMEDIATELY before the sale.

>
> How much of the upgraded avionics value was "consumed" during your
> ownership? Normally one would depreciate the avionics and have a basis for
> them, but is is fair to add the entire avionics cost to the airplane's basis
> if the avionics were added 15yrs and 2000hrs ago?

You don't depreciate stuff in personal ownership. You can add the
capitol improvement of purchasing / installing avionics to the plane
(as opposed to maintaining what was there). You need to subtract
from the basis any residual value from anything your removed (if you
for example sell off your old stuff after it is removed).

> If, the day before I sell the airplane, I replace the autopilot servos that
> were 15yrs old when I bought the airplane and 20yrs old now, does that add
> to the basis?

Probably those would be considered maintenance
>
> If, when the airplane was purchased, all the bushings in the landing gear
> pivots were worn out and replaced at the buyers expense, shouldn't that be
> factored into the basis? I

Nope, correcting wear and tear is NOT generally counted. However,
certain fixes you have to right before the sale to make things
sellable can be added to your basis.

>
> If you purchased the airplane with a crappy interior and it is like new now
> then clearly you should add some of that cost to the basis but how much?

The "value of things" doesn't MATTER. The issue is WHAT YOU PAID FOR
and whether that is a capital (or other allowable) expense. You
subtract that from WHAT YOU SELL the plane for. The difference is your
capital gain.

>
> If you bought the airplane with a run out engine and overhauled the engine
> for $10K and TBO is 2000hrs and you have put 1000hrs on the engine, what
> should you do to the airplanes basis? If you just pro-rate you get $5K
> What if you had to do a top overhaul for $5K at 900hrs?

The basis is what you paid. How much time is on the engine is
IMMATERIAL. The change in value of the engine is taken care of in
your purchase /selling price.

Matt

November 13th 05, 10:57 PM

Just don't make the mistake of selling the aircraft to a related party (son,
father, cousin, etc.). In that case the gain is "ordinary" and subject to
whatever your marginal rate is.

"Ron Natalie" > wrote:

> If you've held the aircraft for more than a year you owe 15% of the
> gain.

Mike Rapoport

November 14th 05, 04:13 AM

OK. I did not realize that *everything* gets added to the basis (even if it
was thrown away year ago and you arn't even selling it when you sell the
airplane.) I guess it makes some sense since the business user would have
deducted these costs over time.

Mike
MU-2

"TaxSrv" > wrote in message
...
> "Mike Rapoport" wrote:
>>
>> I would definately add paint to the basis, particularly if it
>> was done recently. It definately adds value to the airplane.
>
> The IRS has long ago ruled that paint on anything is not capital.
> If a very fresh paint, one might argue on the concept of "fixing-up
> expenses," if done after the intent to promptly sell was formed.
>
>> How much of the upgraded avionics value was "consumed" during
> your
>> ownership? Normally one would depreciate the avionics and have a
> basis for
>> them, but is is fair to add the entire avionics cost to the
> airplane's basis
>> if the avionics were added 15yrs and 2000hrs ago?
>
> Under long held principles of tax law -- yes. Add avionics from day
> one to basis, even if a box is ripped out and sold on eBay for $1.
> Even if gone thru 3 comms, trading in the old one each time.
>
>> If, the day before I sell the airplane, I replace the autopilot
> servos that
>> were 15yrs old when I bought the airplane and 20yrs old now, does
> that add
>> to the basis?
>
> Depends if a repair was called for. Doesn't matter when done;
> repairs do not add to basis. Else, a possible fixing up expense if
> for purpose of sale. Don't know why somebody would replace working
> servos just to better sell it, unless owner is an A&P maybe.
>
>> If, when the airplane was purchased, all the bushings in the
> landing gear
>> pivots were worn out and replaced at the buyers expense,
> shouldn't that
>> be factored into the basis?
>
> No, it's a repair.
>
>> If you bought the airplane with a run out engine and overhauled
> the engine
>> for $10K and TBO is 2000hrs and you have put 1000hrs on the
> engine, what
>> should you do to the airplanes basis? If you just pro-rate you
> get $5K
>
> We don't prorate nuthin'. Even if you put 6,000 hours on the
> plane, and did three majors at 2,000 hrs each, under tax law your
> basis reflects a 4-engine airplane with one prop.
>
>> What if you had to do a top overhaul for $5K at 900hrs?
>
> Sounds like a repair to me at only 900 on 2,000 TBO. No effect on
> basis.
>
>> All these things are easy if the airplane was used for business
>> and all expenses were either expensed or capitalized and
>> depreciated leading to an unambigous basis.
>
> No, the rules on what is capital vs. repair do not change, personal
> or business asset. Tax law merely says no depreciation allowed for
> personal use portion, including100% personal.
>
>> I think that there is so much ambiguity here.
>
> No, it's very simple for a personal asset, because we don't worry
> about the complexities of computing depreciation. For a personal
> asset, you may capitalize basically big items not in the nature of
> usual repairs. Except paint, which is a repair too.
>
> Fred F.
>

TaxSrv

November 14th 05, 01:51 PM

"Mike Rapoport" wrote:
> OK. I did not realize that *everything* gets added to the
> basis even if it was thrown away year ago and you arn't
> even selling it when you sell the airplane.) I guess it makes
> some sense since the business user would have deducted
> these costs over time.

"Sense" has little to do with tax law, which has to also operate
its own way for practical enforcement, and timing tax receipts
today vs. tomorrow if Congress so desires.

Say you originally bot the plane with a Loran, and it stopped
working, so you removed and tossed it. Whether business or not,
there's no accounting loss, since you can't establish the % of
purchase price which was in the Loran. So Loran stays forever in
the basis.

However, if you bot plane and then added Loran for $1500, and sold
it for $100, then you have a business loss if this separate Loran
asset was not fully depreciated. Otherwise a taxable ordinary
gain. For a personal plane, you similarly take the Loran back out
of basis, but with no tax effect ever as to the $100.

However, if the Loran in a personal plane which you installed
stopped working, and you ripped it out and tossed, you're actually
supposed to take it back out of basis (purchase price of plane).

Back to if Loran was in the plane when you bot it, but you sold
working Loran for $100. Whether biz or not, just subtract $100
from basis of plane which forever includes the Loran. It really
all follows a few simple rules.

Fred F.

Matt Barrow

November 14th 05, 02:30 PM

"TaxSrv" > wrote in message
...
>
> Say you originally bot the plane with a Loran, >
> However, if you bot plane and then added Loran for $1500,
> Back to if Loran was in the plane when you bot it, but you sold

Do you mean _bought_ or are you using terminology I'm not familiar with?

sfb

November 14th 05, 03:17 PM

His ISP charges by the character.

"Matt Barrow" > wrote in message
...
>
> "TaxSrv" > wrote in message
> ...
>>
>> Say you originally bot the plane with a Loran, >
>> However, if you bot plane and then added Loran for $1500,
>> Back to if Loran was in the plane when you bot it, but you sold
>
> Do you mean _bought_ or are you using terminology I'm not familiar
> with?
>
>
>

TaxSrv

November 14th 05, 03:24 PM

"Matt Barrow" wrote:
> > Say you originally bot the plane with a Loran, >
>
> Do you mean _bought_ or are you using terminology I'm
> not familiar with?
>

I remember it from way back, if not Accounting 101, in college
taxation texts. Short words and small money amounts like $10, in
examples, better focuses the mind on the concept.

Fred F.

TripFarmer

November 14th 05, 05:03 PM

George,

If you bought and sold a 4 wheeler and made a few bucks would
you report it? What about a car? See where I'm going?

Trip

In article <BDxdf.1644$Pa4.1059@trndny01>, says...
>
>Ok, I know we have some tax experts out there. Tell me. When you sell an
>aircraft, what taxes apply to the seller? Is this a capital gains/loss
>situation? We're talking about an aircraft owned by and registered to a private
>individual and used for pleasure.
>
>George Patterson
> Drink is the curse of the land. It makes you quarrel with your neighbor.
> It makes you shoot at your landlord. And it makes you miss him.

TripFarmer

November 14th 05, 05:04 PM

>
>According to the IRS, the selling price of the car is taxed as income. I would
>prefer that that is not the case with aircraft.
>

This is not correct.

Trip

George Patterson

November 14th 05, 05:12 PM

TripFarmer wrote:

> If you bought and sold a 4 wheeler and made a few bucks would
> you report it? What about a car? See where I'm going?

Yeah, I see where you're going, but I'm running a small business. I make very
little money at it and write off quite a bit of stuff, which makes me a target
for an audit. I use TurboTax to calculate my returns, and they don't seem to
have considered aircraft ownership in their package.

As it turns out, the total cost of the aircraft and added equipment is well over
the price I got for the plane, so I don't have a tax liability there. When I
asked the original question, I felt there were three possibilities there. One
would have treated the entire selling price as income, one would allow me to get
a capital loss on the sale, and the third is this one. This is satisfactory.

George Patterson
Drink is the curse of the land. It makes you quarrel with your neighbor.
It makes you shoot at your landlord. And it makes you miss him.

Steve Foley

November 14th 05, 05:48 PM

So if I bought a damaged aircraft for $5000, repaired it, painted it, and
sold it for $50,000, I would be liable for taxes $45,000?

"TaxSrv" > wrote in message
...
> "Mike Rapoport" wrote:
> > OK. I did not realize that *everything* gets added to the
> > basis even if it was thrown away year ago and you arn't
> > even selling it when you sell the airplane.) I guess it makes
> > some sense since the business user would have deducted
> > these costs over time.
>
> "Sense" has little to do with tax law, which has to also operate
> its own way for practical enforcement, and timing tax receipts
> today vs. tomorrow if Congress so desires.
>
> Say you originally bot the plane with a Loran, and it stopped
> working, so you removed and tossed it. Whether business or not,
> there's no accounting loss, since you can't establish the % of
> purchase price which was in the Loran. So Loran stays forever in
> the basis.
>
> However, if you bot plane and then added Loran for $1500, and sold
> it for $100, then you have a business loss if this separate Loran
> asset was not fully depreciated. Otherwise a taxable ordinary
> gain. For a personal plane, you similarly take the Loran back out
> of basis, but with no tax effect ever as to the $100.
>
> However, if the Loran in a personal plane which you installed
> stopped working, and you ripped it out and tossed, you're actually
> supposed to take it back out of basis (purchase price of plane).
>
> Back to if Loran was in the plane when you bot it, but you sold
> working Loran for $100. Whether biz or not, just subtract $100
> from basis of plane which forever includes the Loran. It really
> all follows a few simple rules.
>
> Fred F.
>

Gig 601XL Builder

November 14th 05, 05:54 PM

All other things being equal, Yes.

"Steve Foley" > wrote in message
news:J54ef.456$Rb.274@trndny01...
> So if I bought a damaged aircraft for $5000, repaired it, painted it, and
> sold it for $50,000, I would be liable for taxes $45,000?
>
> "TaxSrv" > wrote in message
> ...
>> "Mike Rapoport" wrote:
>> > OK. I did not realize that *everything* gets added to the
>> > basis even if it was thrown away year ago and you arn't
>> > even selling it when you sell the airplane.) I guess it makes
>> > some sense since the business user would have deducted
>> > these costs over time.
>>
>> "Sense" has little to do with tax law, which has to also operate
>> its own way for practical enforcement, and timing tax receipts
>> today vs. tomorrow if Congress so desires.
>>
>> Say you originally bot the plane with a Loran, and it stopped
>> working, so you removed and tossed it. Whether business or not,
>> there's no accounting loss, since you can't establish the % of
>> purchase price which was in the Loran. So Loran stays forever in
>> the basis.
>>
>> However, if you bot plane and then added Loran for $1500, and sold
>> it for $100, then you have a business loss if this separate Loran
>> asset was not fully depreciated. Otherwise a taxable ordinary
>> gain. For a personal plane, you similarly take the Loran back out
>> of basis, but with no tax effect ever as to the $100.
>>
>> However, if the Loran in a personal plane which you installed
>> stopped working, and you ripped it out and tossed, you're actually
>> supposed to take it back out of basis (purchase price of plane).
>>
>> Back to if Loran was in the plane when you bot it, but you sold
>> working Loran for $100. Whether biz or not, just subtract $100
>> from basis of plane which forever includes the Loran. It really
>> all follows a few simple rules.
>>
>> Fred F.
>>
>
>

Ron Natalie

November 14th 05, 05:54 PM

Steve Foley wrote:
> So if I bought a damaged aircraft for $5000, repaired it, painted it, and
> sold it for $50,000, I would be liable for taxes $45,000?
>
That's pretty much the way it works. If you hold it for a year, you are
taxed at the capital gains rate of 15% (plus whatever gouge your state
wants). If you sell it in under a year, you pay whatever your top
tax bracket is one the income.

Steve Foley

November 14th 05, 06:00 PM

That figgers.

Note: I'm not selling my plane.

2 More questions:

#1) Could I set up everything on a schedule C and claim a business - sole
proprietor ?

#2) Can you apply a 1031 tax exchange to an aircraft? , ie roll the $50,000
into a $75,000 aircraft and defer the taxes until I sell the $75,000 one.

"Ron Natalie" > wrote in message
m...
> Steve Foley wrote:
> > So if I bought a damaged aircraft for $5000, repaired it, painted it,
and
> > sold it for $50,000, I would be liable for taxes $45,000?
> >
> That's pretty much the way it works. If you hold it for a year, you are
> taxed at the capital gains rate of 15% (plus whatever gouge your state
> wants). If you sell it in under a year, you pay whatever your top
> tax bracket is one the income.

Ron Natalie

November 14th 05, 06:25 PM

Steve Foley wrote:
:
>
> #1) Could I set up everything on a schedule C and claim a business - sole
> proprietor ?

If you operate the plane as a business, you can do that. More
deductions are available to you then. The capital gains treatment
however is essentially the same.
>
> #2) Can you apply a 1031 tax exchange to an aircraft? , ie roll the $50,000
> into a $75,000 aircraft and defer the taxes until I sell the $75,000 one.
>
Yes, if it is a depreciable business property you can do the 1031 exchange.

Note that you have to really have a business motive. You can't just
claim the plane as a business and continue to use it personally and
expect preferred tax status.

xyzzy

November 14th 05, 06:34 PM

I don't know if aircraft are different, but with investment real estate
you have to factor in the depreciation if you were entitled to deduct
it, even if you didn't.

Mike Rapoport wrote:

> You don't factor in depreciation unless you depreciated it for tax purposes.
>
> Mike
> MU-2
>
> "BTIZ" > wrote in message
> news:Wzydf.769$7A.758@fed1read04...
>
>>ok... I'm not a tax expert... but when you sell a car.. what taxes apply
>>to the seller..
>>is it a capital gains or loss.. if you intend to take a capital gain/loss
>>be sure to factor in depreciation
>>
>>I can't ever imagine it being a gain, unless it's an antique bird that has
>>really appreciated in value..
>>
>>the buyer pays all sales taxes..
>>BT
>>
>>"George Patterson" > wrote in message
>>news:BDxdf.1644$Pa4.1059@trndny01...
>>
>>>Ok, I know we have some tax experts out there. Tell me. When you sell an
>>>aircraft, what taxes apply to the seller? Is this a capital gains/loss
>>>situation? We're talking about an aircraft owned by and registered to a
>>>private individual and used for pleasure.
>>>
>>>George Patterson
>>> Drink is the curse of the land. It makes you quarrel with your
>>>neighbor.
>>> It makes you shoot at your landlord. And it makes you miss him.
>>
>>
>
>

--
"You can support the troops but not the president"
--Representative Tom Delay (R-TX), during the Kosovo war.

xyzzy

November 14th 05, 06:35 PM

N93332 wrote:

> "Ron Rosenfeld" > wrote in message
> ...
>
>>Don't forget that it is only the gain that is taxed. That is the
>>difference between your net receipts on the sale less the basis.
>>Calculating the basis may or may not be tricky, and, depending on your
>>situation, may warrant a discussion with someone who knows what he or she
>>is talking about :-))
>
>
> I agree, talk with someone that knows about this stuff...
>
> My aircraft could possibly be sold for about $5-10k more than I purchased it
> a few years ago. Personally, I wouldn't claim the capital gain of all $5-10k
> and would figure out what all (money-wise) I have put into it to calculate
> the cost basis.
>
>

You can't count routine repairs as part of the basis. Only "improvements."

--
"You can support the troops but not the president"
--Representative Tom Delay (R-TX), during the Kosovo war.

TaxSrv

November 14th 05, 07:19 PM

"Steve Foley" wrote:
> So if I bought a damaged aircraft for $5000, repaired it, painted
it, and
> sold it for $50,000, I would be liable for taxes $45,000?
>

Negative. An exception to the rules about capital vs. repair is
that in a planned program of renovation, just about every stinkin'
thing can be capitalized until the project is done and all signed
off. So your basis would be $50,000 if not a bit less.

Fred F.

TaxSrv

November 14th 05, 07:24 PM

"xyzzy" wrote:
> I don't know if aircraft are different, but with investment real
estate
> you have to factor in the depreciation if you were entitled to
deduct
> it, even if you didn't.
>

Only investment property held for production of income (e.g.,
rental) is depreciated. Else, depreciation is not allowable, nor
figured in when the property is sold. Ordinary people were doing
this in hot market areas -- "flipping" vacant residential real
estate, not even bothering with tenants.

Fred F.

Steve Foley

November 14th 05, 07:30 PM

I'm talking about the specific case where I buy a basket-case with the
intention of fixing it and selling it.

As I stated, I have no current plans to do that. It's just something I've
dreamed about.

"Ron Natalie" > wrote in message
m...
> Steve Foley wrote:

> Note that you have to really have a business motive. You can't just
> claim the plane as a business and continue to use it personally and
> expect preferred tax status.
>

Matt Barrow

November 14th 05, 10:01 PM

"sfb" > wrote in message news:mU1ef.7360$9T4.6748@trnddc04...
> His ISP charges by the character.

O, I C

>
> "Matt Barrow" > wrote in message
> ...
>>
>> "TaxSrv" > wrote in message
>> ...
>>>
>>> Say you originally bot the plane with a Loran, >
>>> However, if you bot plane and then added Loran for $1500,
>>> Back to if Loran was in the plane when you bot it, but you sold
>>
>> Do you mean _bought_ or are you using terminology I'm not familiar with?
>>
>>
>>
>
>
>

Matt Whiting

November 14th 05, 10:15 PM

TaxSrv wrote:

> "Matt Barrow" wrote:
>
>>>Say you originally bot the plane with a Loran, >
>>
>>Do you mean _bought_ or are you using terminology I'm
>>not familiar with?
>>
>
>
> I remember it from way back, if not Accounting 101, in college
> taxation texts. Short words and small money amounts like $10, in
> examples, better focuses the mind on the concept.

The exception is when the short words aren't really words at all. In
that case all you are doing is completely distracting the reader from
the topic at hand wondering if this really is a new word with some
meaning or simply an illiterate writer.

Matt

Matt Whiting

November 14th 05, 10:17 PM

Matt Barrow wrote:

> "sfb" > wrote in message news:mU1ef.7360$9T4.6748@trnddc04...
>
>>His ISP charges by the character.
>
>
> O, I C

No, you mean OIC. You wasted three characters! :-)

Matt

Doug

November 14th 05, 10:35 PM

Steve Foley wrote:
> So if I bought a damaged aircraft for $5000, repaired it, painted it, and
> sold it for $50,000, I would be liable for taxes $45,000?

No, because you would have spent money on parts to repair it. That
money spent would be added to the $5000 for your basis. And since this
is aviation, no doubt that amount would now be MORE than $50,000. :-)

81mm

November 22nd 05, 01:31 AM

Sorry guys.., but an aircraft is not real estate..!! It is not real
property for tax purposes. If you are a private individual the IRS needn't
know a damn thing about it unless you are flying it for hire, using in a
business.., and bring drugs into the country.., AND it certainly is not part
of a P/L statement unless it's registered to a corporation. If you hear
anything from the IRS ask'em how they got involved, where's the profit in
owning an aircraft..?? Believe me.., I haven't had'em answer the question
when I last ask'd back in 1982..!!!

sfb

November 22nd 05, 03:21 AM

Don't give up your day job to do taxes.

Topic 409 - Capital Gains and Losses
http://www.irs.gov/taxtopics/tc409.html

Almost everything you own and use for personal or investment purposes is
a capital asset. Examples are your home, household furnishings, and
stocks or bonds held in your personal account.

"81mm" > wrote in message
news:fyugf.1247$Tr3.367@trnddc08...
> Sorry guys.., but an aircraft is not real estate..!! It is not real
> property for tax purposes. If you are a private individual the IRS
> needn't know a damn thing about it unless you are flying it for hire,
> using in a business.., and bring drugs into the country.., AND it
> certainly is not part of a P/L statement unless it's registered to a
> corporation. If you hear anything from the IRS ask'em how they got
> involved, where's the profit in owning an aircraft..?? Believe me..,
> I haven't had'em answer the question when I last ask'd back in
> 1982..!!!
>

81mm

November 22nd 05, 02:08 PM

Yeah.., well (sfb), don't give up your day job either.., it's you, and
others like you who are "working" up into July or August of the year just to
pay taxes you never owed to begin with (smile)!!
I'm sure if you can fly (and land) an aircraft, then you're able to do a
little research on the smiple definition of "income", as in Income Tax
(grin)..!!
Sorry brother, but just Goggle that question and you can cross a rabbi's
eyes with teying to define the phrase.., and believe it or not.., various
tax codes won't do it either without a P/L..!!
To the rest of you "aviators" out there.., just go down your check list
before playing a tax you can't define. If you don't understand how to fly
an aircraft, I suggest you not fly until you do!
And if you don't understand what a tax is, who it applys to, or who is
"libel" to pay it.., then don't pay it until some taxing authority shows
you, and you do understand it..!! Enough said..!!

The old fart with the wind in the wires...!!!

Matt Barrow

November 22nd 05, 03:20 PM

"81mm" > wrote in message
news:nDFgf.291$Dx3.189@trnddc07...

A reply to sfb who stated:

Don't give up your day job to do taxes.

Topic 409 - Capital Gains and Losses
http://www.irs.gov/taxtopics/tc409.html

Almost everything you own and use for personal or investment purposes is
a capital asset. Examples are your home, household furnishings, and
stocks or bonds held in your personal account.

> Yeah.., well (sfb), don't give up your day job either.., it's you, and
> others like you who are "working" up into July or August of the year just
> to pay taxes you never owed to begin with (smile)!!
> I'm sure if you can fly (and land) an aircraft, then you're able to do a
> little research on the smiple definition of "income", as in Income Tax
> (grin)..!!

Nice evasion for a response. You an remove that foot from your mouth
anytime.

(rest of drivel snipped)

Ron Natalie

November 22nd 05, 03:45 PM

81mm wrote:
> Sorry guys.., but an aircraft is not real estate..!! It is not real
> property for tax purposes. If you are a private individual the IRS needn't
> know a damn thing about it unless you are flying it for hire, using in a
> business.., and bring drugs into the country.., AND it certainly is not part
> of a P/L statement unless it's registered to a corporation. If you hear
> anything from the IRS ask'em how they got involved, where's the profit in
> owning an aircraft..?? Believe me.., I haven't had'em answer the question
> when I last ask'd back in 1982..!!!
>
You are correct it isn't real estate, but the capital gains rules
aren't limited to real estate (if it was, I want some serious money
back on my other investments from the IRS).

From the IRS's own web page:

Almost everything you own and use for personal purposes, pleasure or
investment is a capital asset. The IRS says when you sell a capital
asset, such as stocks, the difference between the amount you sell it for
and your basis, which is usually what you paid for it, is a capital gain
or a capital loss. While you must report all capital gains, you may
deduct only your capital losses on investment property, not personal
property.

81mm

November 24th 05, 03:28 PM

Matt.., where is the "evasion" in telling folks not to pay a tax they don't
understand..? And as far as "removing my foot", well I'll be taking it out
of your third point of contact if you insist on taking the conversation in
that direction..!! Now, go home to Mommy and get on the computer. Do a
little constructive research.., won't hurt as much as my foot (smile)..!!
Oh, and Happy T'day and XMas..!!

81mm

November 24th 05, 03:50 PM

Seriously Ron.., you've got nothing to lose by researching the "rules" you
speak of.., and by the way.., any "rules" issued from administrative
agencies, offices, or departments are not really "laws" per se..!! All
state taxing authorities, and the IRS in particular have no "law making"
authority..!! Hard to believe I know, but the IRS itself is a state
corporation, and it does make up it's own "rules." So, when one buys an
aircraft for personal use there is no "initial" need to report the purchase
to any agency unless you wish to register or fly it.., and then it's the
FAA's venue, NOT some taxing authority. As per your belief that ALL
personal property is taxable.., that is false. I think the last time I saw
the "tax man" come by my folk's home to "take a look" for county tax
purposes was 1948..!! I'll end.., AGAIN, with the note that, YES.., if one
is going to use the aircraft in business, or for any purpose that can BE
APPLIED to corporate or business use to qualify for the DEDUCTION.., then
yes, by all means, report the aircraft as such!! But for personal use..,
neyt..!! If they ask about it, then ask'em back.., I mean this is
America.., RIGHT..??

Ron Natalie

November 24th 05, 05:06 PM

81mm wrote:
> Seriously Ron.., you've got nothing to lose by researching the "rules" you
> speak of.., and by the way.., any "rules" issued from administrative
> agencies, offices, or departments are not really "laws" per se..!!

Believe me I am quite aware of that fact, if I called them laws I
apologize. It's a minor nit to the uestion.

> All
> state taxing authorities, and the IRS in particular have no "law making"
> authority..!!

The IRS certainly does not. The states are a different story,
varies from state to state. If you want to talk about Virgina
or Maryland, states in which I am familiar with the tax and aviation
laws, we can, but it's not really relevant to the conversation.

> Hard to believe I know, but the IRS itself is a state
> corporation, and it does make up it's own "rules."

The IRS is a division of the treasury department. It has makes
regulations based on supposed delegated authority from the congress
(based on various tax acts). The IRS is not a "state" (if you
mean state as in United States) anything, nor is it any sort of
corporation.

> So, when one buys an
> aircraft for personal use there is no "initial" need to report the purchase
> to any agency unless you wish to register or fly it..,

Nobody said you had to report a purchase to the IRS. The trick in
the regulations is that titling and recording of liens for aircraft
are required to be done with the FAA.

> I'll end.., AGAIN, with the note that, YES.., if one
> is going to use the aircraft in business, or for any purpose that can BE
> APPLIED to corporate or business use to qualify for the DEDUCTION.., then
> yes, by all means, report the aircraft as such!! But for personal use..,
> neyt..!! If they ask about it, then ask'em back.., I mean this is
> America.., RIGHT..??
>

You're obviously a deluded idiot. If you have a capital gain that
you "neglect to pay" and "ask'em back" isn't going to keep you from
a world of pain if the IRS comes knocking.'

Believe me if the IRS wanted to they would note the fact that whoever
purchased your plane registered the ownership change. Believe me the
Commonwealth of Virginia does this to see if you owe any sales tax.

>

Matt

November 25th 05, 01:55 AM

"Ron Natalie" > wrote:

> The IRS is a division of the treasury department. It has makes
> regulations based on supposed delegated authority from the congress
> (based on various tax acts).

That's right. I'm not sure of the tax acts for delegation, but the 14th
Amendment states:

"The Congress shall have power to lay and collect taxes on incomes, from
whatever source derived, without apportionment among the several States, and
without regard to any census or enumeration."

I always wondered how an amendment like that could get ratified. It's a
blank check for tax on any income (including private sales of aircraft).

Also, I believe Tax Court is the only court in America where the burden of
proof is on the defendant/taxpayer instead of the State or plaintiff.

Matt

Matt

November 25th 05, 01:58 AM

"Matt" > wrote:
> That's right. I'm not sure of the tax acts for delegation, but the 14th
> Amendment states:

Sorry; 16th Amendment.

TaxSrv

November 25th 05, 02:25 AM

"Matt" wrote:
> Also, I believe Tax Court is the only court in America where the
burden of
> proof is on the defendant/taxpayer instead of the State or
plaintiff.
>

No longer the general case, ever since Congress amended the statute
in 1998 to shift the burden to IRS in most cases (26 USC 7491).

Fred F.

George Patterson

November 25th 05, 02:27 AM

Matt wrote:

> That's right. I'm not sure of the tax acts for delegation, but the 14th
> Amendment states:

16th amendment.

> I always wondered how an amendment like that could get ratified.

Wilson had just taken the presidency, and he sold Congress on the idea of a
graduated income tax as alternate income for reduced tariffs. As far as the
public was concerned, these taxes would target only people like the Vanderbilts.
Later measures introduced by Wilson were anti-trust laws, child-labor laws, and
the establishment of an 8-hour workday for people such as railroad workers.
These efforts to rein in big business were quite popular.

George Patterson
We don't stop playing because we grow old. We grow old because we stop
playing.

81mm

November 25th 05, 03:25 AM

Looks guys.., why start calling names.., I mean, does it make your stance
any stronger..?? Frankly, this tread started out with the question of
buying an aircraft and paying a tax. Both of you (and the other bystander)
have moved the subject over to a discussion of an "income" tax, as apposed
to a simple fee, licensing, and/or a property tax issue.., and you are
correct..! However, the subject of whether an "individual", as opposed to a
"business".., has a "liability" to pay a tax on the smiple purchase and
operation of an aircraft is getting your balls in an uproar. True again,
the 16th amendment (as ratified.., another subject?) does give congress the
authority to levy and collect a tax on "incomes", but "income" in this case
is NOT derived from the purchase or ownership of an aircraft..., unless it
is used in a business..!! Oh, and by the way, I have a copy of the
incorporation papers for the IRS in the state of Delaware in front of me as
I write (smile) which gives it some authority to act as an "agency" with
limited powers to collect taxes with regards to alcohol, tobacco, and
firearms since it's realignment with the DEA, BATF some years ago. Please
keep searching the IRS code for the definition of "income"..!! Now.., back
to the subject 45 treads back..., and no name calling..!!

[email protected]

November 25th 05, 04:45 AM

81mm > wrote:
> Looks guys.., why start calling names.., I mean, does it make your stance
> any stronger..?? Frankly, this tread started out with the question of
> buying an aircraft and paying a tax. Both of you (and the other bystander)
> have moved the subject over to a discussion of an "income" tax, as apposed
> to a simple fee, licensing, and/or a property tax issue.., and you are
> correct..! However, the subject of whether an "individual", as opposed to a
> "business".., has a "liability" to pay a tax on the smiple purchase and
> operation of an aircraft is getting your balls in an uproar. True again,
> the 16th amendment (as ratified.., another subject?) does give congress the
> authority to levy and collect a tax on "incomes", but "income" in this case
> is NOT derived from the purchase or ownership of an aircraft..., unless it
> is used in a business..!! Oh, and by the way, I have a copy of the
> incorporation papers for the IRS in the state of Delaware in front of me as
> I write (smile) which gives it some authority to act as an "agency" with
> limited powers to collect taxes with regards to alcohol, tobacco, and
> firearms since it's realignment with the DEA, BATF some years ago. Please
> keep searching the IRS code for the definition of "income"..!! Now.., back
> to the subject 45 treads back..., and no name calling..!!

Selling something for more than you paid for it is called making a profit.

Profit is taxable as income for individuals as well as businesses.

What part of this are you struggling to understand?

In the real world very few items purchased by individuals are ever
sold for a profit and the big ticket items that are likely to are
generally registered in some manner making tax avoidance difficult.

If you buy an old chair at the Goodwill store for $25 and it turns out
to be a rare antique worth $25,000, you owe the IRS (and most likely
your state) taxes on $24,975 of income.

The fact that the odds of anyone ever knowing about it are just about
nil (unless you have a big mouth, **** someone off, and they turn
you in for the reward) does not mean that you are not legally liable
for the tax.

--
Jim Pennino

Remove .spam.sux to reply.

sfb

November 25th 05, 04:51 AM

It is time to plonk him as he is terminally stupid or just being ornery
to get our goats.

> wrote in message
...
> 81mm > wrote:
>
> What part of this are you struggling to understand?
>

81mm

November 25th 05, 01:31 PM

Tell'ya what guys.., keep paying taxes you don't owe.., but why misinform
others? As to any other aviation buffs who may be viewing this tread, looks
folks, just do the research and think a little about the answers these
"true" Americans who have nothing to offer but false information, bad
manners, and name calling..!!

Now, as to you two bad mannered assholes, as a retired Special Forces
type.., if you punks were to speak to me that way in public, I'd smiply tear
off your fu&%&'n head and **** in the hole. Now, as per your second hole..,
just report to your local IRS office.., bend over and spead your cheeks..!!!
My apologies if I offended any of the innocent by-standers..!!

Matt Whiting

November 25th 05, 01:40 PM

81mm wrote:
> Looks guys.., why start calling names.., I mean, does it make your stance
> any stronger..?? Frankly, this tread started out with the question of
> buying an aircraft and paying a tax. Both of you (and the other bystander)
> have moved the subject over to a discussion of an "income" tax, as apposed
> to a simple fee, licensing, and/or a property tax issue.., and you are
> correct..! However, the subject of whether an "individual", as opposed to a
> "business".., has a "liability" to pay a tax on the smiple purchase and
> operation of an aircraft is getting your balls in an uproar. True again,
> the 16th amendment (as ratified.., another subject?) does give congress the
> authority to levy and collect a tax on "incomes", but "income" in this case
> is NOT derived from the purchase or ownership of an aircraft..., unless it
> is used in a business..!! Oh, and by the way, I have a copy of the
> incorporation papers for the IRS in the state of Delaware in front of me as
> I write (smile) which gives it some authority to act as an "agency" with
> limited powers to collect taxes with regards to alcohol, tobacco, and
> firearms since it's realignment with the DEA, BATF some years ago. Please
> keep searching the IRS code for the definition of "income"..!! Now.., back
> to the subject 45 treads back..., and no name calling..!!

Yes, the income isn't derived from using the airplane, but when you sell
it, you may well generate income in the form of a capital gain.

Matt

Matt Whiting

November 25th 05, 01:41 PM

81mm wrote:

> Tell'ya what guys.., keep paying taxes you don't owe.., but why misinform
> others? As to any other aviation buffs who may be viewing this tread, looks
> folks, just do the research and think a little about the answers these
> "true" Americans who have nothing to offer but false information, bad
> manners, and name calling..!!

I'd love to not pay capital gains taxes, but you have yet to show a
legal way to avoid them.

Matt

Doug

November 25th 05, 03:04 PM

Fight! Fight! Fight!

81mm

November 25th 05, 03:30 PM

Thanks Matt for a decent question. The best way to answer is to remind you
an aircraft, when bought, sold, or held by an individual "person" is NOT
deemed "real property" per se.., as others would have you believe, and
therefore is not automatically seen as a "gain", simply because at that
stage it is "personal property", not real property unless (and here we go
again), the aircraft is brought, held, or used in the course of a business,
or part of some inventory for sale. It is "business activities".., NOT
individual purchases that generate "income" (as defined) through their
business P/L statements, which make these businesses "libel" to pay a tax
(after assessment)..! So now, back to the "individual" as a "tax payer"..!!
The IRS code (surprisingly enough) nowhere "defines" income to the
individual as having an "income." Then here is the sticky point with the
tax guys, as everybody has bought into the "idea" (not in the code) that an
individual is a "person" with a liability or duty to pay a tax on income
"before" having been properly accessed!! This one question is the very one
the IRS has yet to ever supply me with an answer for. Every time they have
mailed me a "Notice of Deficiency" I have simply asked them for the date,
and by whom I was accessed the amount of deficiency..!! It has never gone
beyond this stage for lo these past 22 years..!! Now, call me an idiot, a
liar, or whatever.., but do the research..!! We should all just go about
our "business", and if the IRS comes to you.., then just ask as by "law"
they must answer you..!! Worst case matter is.., if you think you might owe
some money.., then hold it aside in a saving account drawing interest and
pay them later.., AFTER they have proved that you are the "person" that owes
the tax to begin with. They can't fine you, or add penalties and interest
as long as you respond to their notice in a "timely manner", and they know
it..!!

[email protected]

November 25th 05, 05:45 PM

81mm > wrote:
> Thanks Matt for a decent question. The best way to answer is to remind you
> an aircraft, when bought, sold, or held by an individual "person" is NOT
> deemed "real property" per se.., as others would have you believe, and
> therefore is not automatically seen as a "gain", simply because at that
> stage it is "personal property", not real property unless (and here we go
> again), the aircraft is brought, held, or used in the course of a business,
> or part of some inventory for sale. It is "business activities".., NOT
> individual purchases that generate "income" (as defined) through their
> business P/L statements, which make these businesses "libel" to pay a tax
> (after assessment)..! So now, back to the "individual" as a "tax payer"..!!
> The IRS code (surprisingly enough) nowhere "defines" income to the
> individual as having an "income." Then here is the sticky point with the
> tax guys, as everybody has bought into the "idea" (not in the code) that an
> individual is a "person" with a liability or duty to pay a tax on income
> "before" having been properly accessed!! This one question is the very one
> the IRS has yet to ever supply me with an answer for. Every time they have
> mailed me a "Notice of Deficiency" I have simply asked them for the date,
> and by whom I was accessed the amount of deficiency..!! It has never gone
> beyond this stage for lo these past 22 years..!! Now, call me an idiot, a
> liar, or whatever.., but do the research..!! We should all just go about
> our "business", and if the IRS comes to you.., then just ask as by "law"
> they must answer you..!! Worst case matter is.., if you think you might owe
> some money.., then hold it aside in a saving account drawing interest and
> pay them later.., AFTER they have proved that you are the "person" that owes
> the tax to begin with. They can't fine you, or add penalties and interest
> as long as you respond to their notice in a "timely manner", and they know
> it..!!

Bunch of babbling nonsense.

--
Jim Pennino

Remove .spam.sux to reply.

Matt

November 25th 05, 09:51 PM

"81mm" > wrote:

> Frankly, this tread started out with the question of buying an aircraft
> and paying a tax.

Original Post:

> When you sell an aircraft, what taxes apply to the seller? Is this a
> capital gains/loss situation? We're talking about an aircraft owned by and
> registered to a private individual and used for pleasure.

No Spam

November 27th 05, 04:25 AM

On 11/25/05 09:30, "81mm" > wrote:

> Thanks Matt for a decent question. The best way to answer is to remind you
> an aircraft, when bought, sold, or held by an individual "person" is NOT
> deemed "real property" per se.., as others would have you believe, and
> therefore is not automatically seen as a "gain", simply because at that
> stage it is "personal property", not real property unless (and here we go
> again), the aircraft is brought, held, or used in the course of a business,
> or part of some inventory for sale. It is "business activities".., NOT
> individual purchases that generate "income" (as defined) through their
> business P/L statements, which make these businesses "libel" to pay a tax
> (after assessment)..! So now, back to the "individual" as a "tax payer"..!!
> The IRS code (surprisingly enough) nowhere "defines" income to the
> individual as having an "income." Then here is the sticky point with the
> tax guys, as everybody has bought into the "idea" (not in the code) that an
> individual is a "person" with a liability or duty to pay a tax on income
> "before" having been properly accessed!! This one question is the very one
> the IRS has yet to ever supply me with an answer for. Every time they have
> mailed me a "Notice of Deficiency" I have simply asked them for the date,
> and by whom I was accessed the amount of deficiency..!! It has never gone
> beyond this stage for lo these past 22 years..!! Now, call me an idiot, a
> liar, or whatever.., but do the research..!! We should all just go about
> our "business", and if the IRS comes to you.., then just ask as by "law"
> they must answer you..!! Worst case matter is.., if you think you might owe
> some money.., then hold it aside in a saving account drawing interest and
> pay them later.., AFTER they have proved that you are the "person" that owes
> the tax to begin with. They can't fine you, or add penalties and interest
> as long as you respond to their notice in a "timely manner", and they know
> it..!!
>
>

I don't know what you said here, probably because your return key is broken
on your keyboard.

In any case, from the instructions for Schedule D:

"Generally, gain from the sale or exchange of a capital asset held for
personal use is a capital gain."

"A capital asset is any property held by you except..." (What follows
doesn't include an airplane held by an individual for personal use.)

-> Don
If you're faced with a forced landing,
fly the thing as far into the crash as possible.
- Bob Hoover

81mm

November 28th 05, 01:30 AM

Your right.., these posts don't always comply with accepted syntax and
punctuation. Well, we can't keep beating this subject to death.., I say any
"asset" only apply to "business" activities, and I understand you guys say
individual also can have "assets" for tax purposes. SOoo, maybe I owe for
the past 22 years.., but the IRS has never told me so yet, or "accessed" my
"assets" yet..!!

Good old Bob Hoover.., now was that a left wing-roll, or a right wing-over
at 500 feet..?? Okay.., it's the old black boot on the silver peddle for
me.., maybe we'll live to fight another day..!!

Matt Whiting

November 28th 05, 02:18 AM

81mm wrote:
> Your right.., these posts don't always comply with accepted syntax and
> punctuation. Well, we can't keep beating this subject to death.., I say any
> "asset" only apply to "business" activities, and I understand you guys say
> individual also can have "assets" for tax purposes. SOoo, maybe I owe for
> the past 22 years.., but the IRS has never told me so yet, or "accessed" my
> "assets" yet..!!

It really doesn't matter what we say, it is the IRS that matters and
they pretty clearly say that personal assets are taxable if they yield a
capital gain when sold. This is one of the more clear things that the
IRS says. :-)

Matt

TripFarmer

November 29th 05, 04:13 PM

But personal losses aren't deductible, right? :o)

So, if your neighbor needs a hoe and you have one you bought at a garage
sale for $1.00 and he gives you $5.00 for it do you report a $4.00 gain on
the sale?

Trip

In article >, says...
>
>81mm wrote:
>> Your right.., these posts don't always comply with accepted syntax and
>> punctuation. Well, we can't keep beating this subject to death.., I say any
>> "asset" only apply to "business" activities, and I understand you guys say
>> individual also can have "assets" for tax purposes. SOoo, maybe I owe for
>> the past 22 years.., but the IRS has never told me so yet, or "accessed" my
>> "assets" yet..!!
>
>It really doesn't matter what we say, it is the IRS that matters and
>they pretty clearly say that personal assets are taxable if they yield a
>capital gain when sold. This is one of the more clear things that the
>IRS says. :-)
>
>Matt

sfb

November 29th 05, 04:22 PM

Should you: yes. Will you: probably not.

"TripFarmer" > wrote in message
...
> But personal losses aren't deductible, right? :o)
>
> So, if your neighbor needs a hoe and you have one you bought at a
> garage
> sale for $1.00 and he gives you $5.00 for it do you report a $4.00
> gain on
> the sale?
>
>
> Trip
>
>
> In article >,
> says...
>>
>>81mm wrote:
>>> Your right.., these posts don't always comply with accepted syntax
>>> and
>>> punctuation. Well, we can't keep beating this subject to death.., I
>>> say any
>>> "asset" only apply to "business" activities, and I understand you
>>> guys say
>>> individual also can have "assets" for tax purposes. SOoo, maybe I
>>> owe for
>>> the past 22 years.., but the IRS has never told me so yet, or
>>> "accessed" my
>>> "assets" yet..!!
>>
>>It really doesn't matter what we say, it is the IRS that matters and
>>they pretty clearly say that personal assets are taxable if they yield
>>a
>>capital gain when sold. This is one of the more clear things that the
>>IRS says. :-)
>>
>>Matt
>

Matt Whiting

November 29th 05, 11:09 PM

TripFarmer wrote:
> But personal losses aren't deductible, right? :o)

Last I knew, capital losses could be deducted up to $3000/year and the
excess loss could be carried forward a number of years. I haven't
checked this lately as I haven't had the need, but I haven't heard of
this being changed.

> So, if your neighbor needs a hoe and you have one you bought at a garage
> sale for $1.00 and he gives you $5.00 for it do you report a $4.00 gain on
> the sale?

Again, I'm not sure, but I believe there are tests as to what is a
capital asset and what isn't. At work, we only have to count things as
capital assets if they have a value of $3000 or more and a useful life
of greater than 1 year. A hoe should last more than a year, but
wouldn't meet the dollar test. I'm not sure if similar rules apply for
"personal" assets, but I suspect something similar applies.

Matt

George Patterson

November 30th 05, 03:54 AM

Matt Whiting wrote:

> Last I knew, capital losses could be deducted up to $3000/year and the
> excess loss could be carried forward a number of years. I haven't
> checked this lately as I haven't had the need, but I haven't heard of
> this being changed.

That meets with what happened when I sold my last house. So. Does the purchase
and later sale of an aircraft fall in the capital gains/loss category?

George Patterson
Coffee is only a way of stealing time that should by rights belong to
your slightly older self.

TripFarmer

November 30th 05, 04:01 AM

I said "Personal losses" not "capital losses". They are quite different.

What you count at work as capital to be depreciated verses expensed isn't
necessarily what the IRS allows. But I don't know what business you are in.

Trip

In article >, says...
>
>TripFarmer wrote:
>> But personal losses aren't deductible, right? :o)
>
>Last I knew, capital losses could be deducted up to $3000/year and the
>excess loss could be carried forward a number of years. I haven't
>checked this lately as I haven't had the need, but I haven't heard of
>this being changed.
>
>
>> So, if your neighbor needs a hoe and you have one you bought at a garage
>> sale for $1.00 and he gives you $5.00 for it do you report a $4.00 gain on
>> the sale?
>
>Again, I'm not sure, but I believe there are tests as to what is a
>capital asset and what isn't. At work, we only have to count things as
>capital assets if they have a value of $3000 or more and a useful life
>of greater than 1 year. A hoe should last more than a year, but
>wouldn't meet the dollar test. I'm not sure if similar rules apply for
>"personal" assets, but I suspect something similar applies.
>
>Matt

Matt Whiting

November 30th 05, 10:53 AM

George Patterson wrote:
> Matt Whiting wrote:
>
>> Last I knew, capital losses could be deducted up to $3000/year and the
>> excess loss could be carried forward a number of years. I haven't
>> checked this lately as I haven't had the need, but I haven't heard of
>> this being changed.
>
>
> That meets with what happened when I sold my last house. So. Does the
> purchase and later sale of an aircraft fall in the capital gains/loss
> category?

I believe it does based on my reading of the IRS rules, but I'm not a
tax accountant or attorney, so you'll want to check with a pro to be sure.

Matt

Matt Whiting

November 30th 05, 10:55 AM

TripFarmer wrote:

> I said "Personal losses" not "capital losses". They are quite different.

I haven't heard of personal losses as a tax concept. Can you elaborate?

Matt

john smith

December 2nd 05, 08:48 PM

> > Last I knew, capital losses could be deducted up to $3000/year and the
> > excess loss could be carried forward a number of years. I haven't
> > checked this lately as I haven't had the need, but I haven't heard of
> > this being changed.

> That meets with what happened when I sold my last house. So. Does the
> purchase and later sale of an aircraft fall in the capital gains/loss
> category?

If you perform an annual and your mechanic tells you you need $xxxx
worth of repairs, can you write that off as a capital loss until you
make the necessary improvements?

TaxSrv

December 2nd 05, 10:47 PM

"john smith" wrote:
> > > Last I knew, capital losses could be deducted up to $3000/year
>
> > That meets with what happened when I sold my last house. So. Does
the
> > purchase and later sale of an aircraft fall in the capital
gains/loss
> > category?
>
> If you perform an annual and your mechanic tells you you need $xxxx
> worth of repairs, can you write that off as a capital loss until you
> make the necessary improvements?

Whether a personal residence, or aircraft for personal use, no losses
(except for casualty loss) are ever allowed.

Fred F.

George Patterson

December 3rd 05, 02:46 AM

TaxSrv wrote:

> Whether a personal residence, or aircraft for personal use, no losses
> (except for casualty loss) are ever allowed.

For whatever reason, I got a $3,000 capital loss deduction when I sold that
house. I don't remember what tax package I used that year.

George Patterson
Coffee is only a way of stealing time that should by rights belong to
your slightly older self.

Ron Rosenfeld

December 3rd 05, 01:09 PM

On Sat, 03 Dec 2005 02:46:13 GMT, George Patterson >
wrote:

>TaxSrv wrote:
>
>> Whether a personal residence, or aircraft for personal use, no losses
>> (except for casualty loss) are ever allowed.
>
>For whatever reason, I got a $3,000 capital loss deduction when I sold that
>house. I don't remember what tax package I used that year.
>

There is no question that capital losses on personal property used for
personal purposes are not deductible.

Was the house used solely as a personal residence?

If not, I will guess that either the s/w was wrong or the user made a data
entry error. Perhaps GIGO at work?

Ron (EPM) (N5843Q, Mooney M20E) (CP, ASEL, ASES, IA)

George Patterson

December 3rd 05, 05:00 PM

Ron Rosenfeld wrote:

> Was the house used solely as a personal residence?

Yes. The only thing I can think of is that we had moved the year before. I had
some renovation work to complete on the old place, so I didn't sell it for about
9 months. No one was living there, so, when the tax package asked if it was our
primary residence, I answered "no."

George Patterson
Coffee is only a way of stealing time that should by rights belong to
your slightly older self.

TaxSrv

December 3rd 05, 05:28 PM

"George Patterson" wrote:
> > Was the house used solely as a personal residence?
>
> Yes. The only thing I can think of is that we had
> moved the year before. I had some renovation work
> to complete on the old place, so I didn't sell it for
> about 9 months. No one was living there, so, when
> the tax package asked if it was our primary residence,
> I answered "no."
>

You probably forced the software to consider it investment property,
which it wasn't. We can in provable circumstances hang onto a former
home as investment property, but 9 months of just fixing up for sale
won't make it such property in IRS eyes, no way.

Fred F.

Ron Rosenfeld

December 3rd 05, 09:15 PM

On Sat, 03 Dec 2005 17:00:42 GMT, George Patterson >
wrote:

>Ron Rosenfeld wrote:
>
>> Was the house used solely as a personal residence?
>
>Yes. The only thing I can think of is that we had moved the year before. I had
>some renovation work to complete on the old place, so I didn't sell it for about
>9 months. No one was living there, so, when the tax package asked if it was our
>primary residence, I answered "no."
>
>George Patterson
> Coffee is only a way of stealing time that should by rights belong to
> your slightly older self.

Maybe, based on your answer and its internal logic, the s/w thought your
residence was investment property. I doubt it would qualify as such, given
the facts you've related.

Ron (EPM) (N5843Q, Mooney M20E) (CP, ASEL, ASES, IA)

George Patterson

December 4th 05, 03:28 AM

TaxSrv wrote:

> You probably forced the software to consider it investment property,
> which it wasn't. We can in provable circumstances hang onto a former
> home as investment property, but 9 months of just fixing up for sale
> won't make it such property in IRS eyes, no way.

How about 14 years of fixing it up? That's what I did, and I have before and
after photos to prove it. I pretty much gutted the place and rebuilt from scratch.

George Patterson
Coffee is only a way of stealing time that should by rights belong to
your slightly older self.

sfb

December 4th 05, 04:03 AM

14 years of improvements changes the basis not the type of property from
primary residence to investment.

"George Patterson" > wrote in message
news:pntkf.2786$Yh2.496@trndny01...
> TaxSrv wrote:
>
>> You probably forced the software to consider it investment property,
>> which it wasn't. We can in provable circumstances hang onto a
>> former
>> home as investment property, but 9 months of just fixing up for sale
>> won't make it such property in IRS eyes, no way.
>
> How about 14 years of fixing it up? That's what I did, and I have
> before and after photos to prove it. I pretty much gutted the place
> and rebuilt from scratch.
>
> George Patterson
> Coffee is only a way of stealing time that should by rights
> belong to
> your slightly older self.

George Patterson

December 4th 05, 04:15 AM

sfb wrote:
> 14 years of improvements changes the basis not the type of property from
> primary residence to investment.

I'm not sure what you mean. Are you saying the property was investment?

George Patterson
Coffee is only a way of stealing time that should by rights belong to
your slightly older self.

Ron Rosenfeld

December 4th 05, 01:01 PM

On Sun, 04 Dec 2005 04:15:18 GMT, George Patterson >
wrote:

>sfb wrote:
>> 14 years of improvements changes the basis not the type of property from
>> primary residence to investment.
>
>I'm not sure what you mean. Are you saying the property was investment?
>
>George Patterson
> Coffee is only a way of stealing time that should by rights belong to
> your slightly older self.

Since you moved out of the house nine months before selling it, the burden
of proof will be on you to prove to the IRS that the property was, in fact,
being held for investment purposes.

So far, you've presented no evidence for that.

Investment property is property that produces investment income.

Did your property ever produce income?

Did you advertise it for rent?

Did you actually rent it out?

Did you use the proceeds to purchase another property that you are clearly
using as "investment property"?

Since it was your main residence prior to the sale, and since you spent the
nine months between moving out and selling it engaged in "fixup"
activities, and since it does not appear that you actually engaged in any
activities to support the fact that you really considered this as an
investment property, I think you would have a difficult time proving to the
IRS that it should, in fact, be treated as an investment property, rather
than as your primary residence.

BWTFDIK?

Ron (EPM) (N5843Q, Mooney M20E) (CP, ASEL, ASES, IA)

sfb

December 4th 05, 02:28 PM

The property is either your primary residence or some sort of
investment. The fact that you put money into the property changes the
financial basis - IRS word for original cost plus improvements. That you
improved the property does not in itself change the type of property..

"George Patterson" > wrote in message
news:q3ukf.825$Qf5.702@trndny07...
> sfb wrote:
>> 14 years of improvements changes the basis not the type of property
>> from primary residence to investment.
>
> I'm not sure what you mean. Are you saying the property was
> investment?
>
> George Patterson
> Coffee is only a way of stealing time that should by rights
> belong to
> your slightly older self.

sfb

December 4th 05, 02:32 PM

Moving out of your primary residence prior to selling it is perfectly
normal which is why the IRS has the 2 out of 5 year rule - lived there 2
in the 5 before selling it.

"Ron Rosenfeld" > wrote in message
...
> On Sun, 04 Dec 2005 04:15:18 GMT, George Patterson
> >
> wrote:
>
>>sfb wrote:
>>> 14 years of improvements changes the basis not the type of property
>>> from
>>> primary residence to investment.
>>
>>I'm not sure what you mean. Are you saying the property was
>>investment?
>>
>>George Patterson
>> Coffee is only a way of stealing time that should by rights
>> belong to
>> your slightly older self.
>
> Since you moved out of the house nine months before selling it, the
> burden
> of proof will be on you to prove to the IRS that the property was, in
> fact,
> being held for investment purposes.
>
> So far, you've presented no evidence for that.
>
> Investment property is property that produces investment income.
>
> Did your property ever produce income?
>
> Did you advertise it for rent?
>
> Did you actually rent it out?
>
> Did you use the proceeds to purchase another property that you are
> clearly
> using as "investment property"?
>
> Since it was your main residence prior to the sale, and since you
> spent the
> nine months between moving out and selling it engaged in "fixup"
> activities, and since it does not appear that you actually engaged in
> any
> activities to support the fact that you really considered this as an
> investment property, I think you would have a difficult time proving
> to the
> IRS that it should, in fact, be treated as an investment property,
> rather
> than as your primary residence.
>
> BWTFDIK?
>
>
> Ron (EPM) (N5843Q, Mooney M20E) (CP, ASEL, ASES, IA)

Ron Rosenfeld

December 4th 05, 07:45 PM

On Sun, 04 Dec 2005 14:32:37 GMT, "sfb" > wrote:

>Moving out of your primary residence prior to selling it is perfectly
>normal which is why the IRS has the 2 out of 5 year rule - lived there 2
>in the 5 before selling it.

And your point, in the context of the discussion is ???

The fact that he moved out of the house before selling it would not, as I
wrote, be an argument in favor of treating it as an investment property.

Ron (EPM) (N5843Q, Mooney M20E) (CP, ASEL, ASES, IA)

sfb

December 4th 05, 10:33 PM

I just wanted to **** you off.

"Ron Rosenfeld" > wrote in message
...
> On Sun, 04 Dec 2005 14:32:37 GMT, "sfb" > wrote:
>
>>Moving out of your primary residence prior to selling it is perfectly
>>normal which is why the IRS has the 2 out of 5 year rule - lived there
>>2
>>in the 5 before selling it.
>
> And your point, in the context of the discussion is ???
>
> The fact that he moved out of the house before selling it would not,
> as I
> wrote, be an argument in favor of treating it as an investment
> property.
>
>
> Ron (EPM) (N5843Q, Mooney M20E) (CP, ASEL, ASES, IA)

Ron Rosenfeld

December 5th 05, 01:01 AM

On Sun, 04 Dec 2005 22:33:19 GMT, "sfb" > wrote:

>I just wanted to **** you off.

I expected more.

Ron (EPM) (N5843Q, Mooney M20E) (CP, ASEL, ASES, IA)

George Patterson

December 5th 05, 03:27 AM

sfb wrote:
> The property is either your primary residence or some sort of
> investment. The fact that you put money into the property changes the
> financial basis - IRS word for original cost plus improvements. That you
> improved the property does not in itself change the type of property..

Thanks. That makes it clear.

George Patterson
Coffee is only a way of stealing time that should by rights belong to
your slightly older self.

81mm

December 5th 05, 03:08 PM

Okay Rust-Pickers.., the Great Santani here..!! Just refueled and launched
again.., and just about to put a burst up your six..!! On my way in.., I
notice an IRS bird hang'n the cloud cover laugh'n his ass off over your
silly real estate battle..!! G'dman'it.., I told you idiots 35 posts back
there's a difference between real estate (house), business (inventory)..,
and personal property (aircraft for personal use)..!! Why in hell do you
think the IRS must call you in before they call legally "access" your
taxes..?? It's simply because, outside of Alcohol, Tobacco, and Firearms..,
they have no legal authority to tax an "individual" unless they are involved
in business of some kind. Okay, for the last time.., when one buys an
aircraft there is absolutely no need to tell any agency (outside the FAA)
about your purchase..., UNLESS you are using the thing in business, or
flying other for hire.!! It's as simple as buying a car.., period..!! No
difference..!! It's not a truck, house, real property, or any type of
capital gain..!! Please look up the term "gain" in ANY tax code you wise.
No GAIN unless involved in business or real property..!! Okay.., break
away, break away, break away.., Blue Leader down to the
right...........................!!!!

[email protected]

December 5th 05, 03:50 PM

81mm > wrote:
> Okay Rust-Pickers.., the Great Santani here..!! Just refueled and launched
> again.., and just about to put a burst up your six..!! On my way in.., I
> notice an IRS bird hang'n the cloud cover laugh'n his ass off over your
> silly real estate battle..!! G'dman'it.., I told you idiots 35 posts back
> there's a difference between real estate (house), business (inventory)..,
> and personal property (aircraft for personal use)..!! Why in hell do you
> think the IRS must call you in before they call legally "access" your
> taxes..?? It's simply because, outside of Alcohol, Tobacco, and Firearms..,
> they have no legal authority to tax an "individual" unless they are involved
> in business of some kind. Okay, for the last time.., when one buys an
> aircraft there is absolutely no need to tell any agency (outside the FAA)
> about your purchase..., UNLESS you are using the thing in business, or
> flying other for hire.!! It's as simple as buying a car.., period..!! No
> difference..!! It's not a truck, house, real property, or any type of
> capital gain..!! Please look up the term "gain" in ANY tax code you wise.
> No GAIN unless involved in business or real property..!! Okay.., break
> away, break away, break away.., Blue Leader down to the
> right...........................!!!!

Babbling idiot.

I really laugh my ass off when I read about morons like this getting hung
out to dry on tax evasion charges.

--
Jim Pennino

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