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Schifference
11-15-2013, 11:00 AM
Concerning taxes if you make money on a venture you have to claim the income. When you lose money on a venture you can only deduct the loss to offset gain. Does that seem like it makes any sense?

Sonny Tufts
11-15-2013, 11:12 AM
Of course it makes sense. How else would you handle losses?

Schifference
11-15-2013, 11:14 AM
Losses should offset ordinary income.

Schifference
11-15-2013, 11:19 AM
If you are a new investor and lose $10,000 on your first investment you cannot deduct the loss from your ordinary income. It could take years or you may never be able to deduct your loss. However if you make $10,000 on your first investment you have to pay taxes that year.

erowe1
11-15-2013, 11:22 AM
If you are a new investor and lose $10,000 on your first investment you cannot deduct the loss from your ordinary income. It could take years or you may never be able to deduct your loss. However if you make $10,000 on your first investment you have to pay taxes that year.

Good point.

thoughtomator
11-15-2013, 12:00 PM
The Fifth Amendment would appear to preclude any form of compulsory reporting of the details of one's activities to the government.

Danke
11-15-2013, 12:05 PM
The Fifth Amendment would appear to preclude any form of compulsory reporting of the details of one's activities to the government.

It does, unless your dealings are tried to the government, i.e. you have entered into a taxable activity that is a privilege, not a right.

Schifference
11-15-2013, 12:21 PM
The Fifth Amendment would appear to preclude any form of compulsory reporting of the details of one's activities to the government.

It has been awhile but if I am not mistaken if you invest with any entity that is more than a handshake agreement, the entity submits a 10-99 to the IRS outlining how much you earned or were paid.

Sonny Tufts
11-15-2013, 12:32 PM
If you are a new investor and lose $10,000 on your first investment you cannot deduct the loss from your ordinary income. It could take years or you may never be able to deduct your loss. However if you make $10,000 on your first investment you have to pay taxes that year.

Capital losses are first used to reduce any capital gains, after which any net capital loss can be used to offset up to $3,000 of ordinary income each year. Any excess can be carried over to later years indefinitely until it's absorbed.

Three rationales have been offered for limiting the amount of ordinary income that can be offset by capital losses: First, to counterbalance the preferential tax rate accorded capital gains it's necessary to provide a limitation on the deductibility of capital losses, thereby balancing the total tax benefit granted to taxpayers on their capital gains and losses. Second, a limitation is needed to avoid taxpayer cherrypicking -- that is, since a taxpayer can usually control his capital gains and losses by deciding when to liquidate his investments, it would be unfair to allow him to offset all of his capital losses against ordinary income while he defers his capital gains. Third, without a limitation taxpayers could bunch all of their capital losses in one year such that they move into a lower tax bracket.

Whether these are valid reasons is the subject of much debate among tax scholars.

Sonny Tufts
11-15-2013, 12:37 PM
The Fifth Amendment would appear to preclude any form of compulsory reporting of the details of one's activities to the government.

It doesn't. In a case in which a bootlegger failed to file a tax return reporting his income from his illegal activities, the Supreme Court rejected his 5th Amendment defense:


As the defendant’s income was taxed, the statute of course required a return. [Citation omitted.] In the decision [by the lower court] that this was contrary to the Constitution we are of opinion that the protection of the Fifth Amendment was pressed too far. If the form of return provided called for answers that the defendant was privileged from making he could have raised the objection in the return, but could not on that account refuse to make any return at all. We are not called on to decide what, if anything, he might have withheld. Most of the items warranted no complaint. It would be an extreme if not an extravagant application of the Fifth Amendment to say that it authorized a man to refuse to state the amount of his income because it had been made in crime. But if the defendant desired to test that or any other point he should have tested it in the return so that it could be passed upon. He could not draw a conjurer’s circle around the whole matter by his own declaration that to write any word upon the government blank would bring him into danger of the law. Sullivan v. United States, 274 U.S. 259, 263-264 (1927).

Kodaddy
11-15-2013, 01:29 PM
What is income? If I trade you three chickens for a pig, have I made any income? It seems like an even trade. If I trade you forty hours of my time for $800, have I made any income? Still seems like an even trade. But if someone takes $100 of that transaction it seems like theft to me.

angelatc
11-15-2013, 01:49 PM
If you are a new investor and lose $10,000 on your first investment you cannot deduct the loss from your ordinary income. It could take years or you may never be able to deduct your loss. However if you make $10,000 on your first investment you have to pay taxes that year.

Are you talking about capital losses? NM - Sonny got it.

Sonny Tufts
11-15-2013, 02:18 PM
What is income? If I trade you three chickens for a pig, have I made any income? It seems like an even trade. If I trade you forty hours of my time for $800, have I made any income? Still seems like an even trade. But if someone takes $100 of that transaction it seems like theft to me.

In tax law, gain isn't the difference between value received and value given up. It's the difference between value received and the cost of what's given up. If your three chickens cost you $20 but the pig is worth $30, you have $10 of gain. Since you paid nothing for your labor, all of what you receive for working is gain.

Some will argue that food, shelter, clothing, etc. are required in order to work, so there is a cost in one's labor. The short answer is that these expenses would have to be incurred even if one didn't work. The legal answer is that the law views compensation for work different from gain from dealings in property. The former is included in income under Section 61(a)(1) of the Internal Revenue Code, while the latter is included under Section 61(a)(3).

Red Green
11-15-2013, 02:23 PM
You can usually deduct $3000 per year of passive losses from ordinary income, so yeah eventually you can deduct the losses, but why bother picking at the peanuts in a giant, wet turd like the income tax? It's like arguing that some aspects of cancer aren't as bad as other aspects. The whole thing just needs to be tossed.

angelatc
11-15-2013, 02:26 PM
You can usually deduct $3000 per year of passive losses from ordinary income, so yeah eventually you can deduct the losses, but why bother picking at the peanuts in a giant, wet turd like the income tax? It's like arguing that some aspects of cancer aren't as bad as other aspects. The whole thing just needs to be tossed.

You'd toss capital gains taxes as well as income taxes?

Christian Liberty
11-15-2013, 02:27 PM
Taxation is theft.

HOLLYWOOD
11-15-2013, 02:35 PM
Taxation is theft.Yep... and writeoffs are welfare, just ask corporatist America. The percentage of corp annual tax revenue has dropped from 14.4% to 9.6% in the past 5 years. So much for that "highest in the world" 35% corporate tax rate MeMe...

It's the middle classes that especially get screwed. 1895 Supreme Court Chief Justice, Melville Fuller... his comments/OPINION, voting down a US income tax. It leads to; class warfare, corruption, and favoritism.

Only thing Old Mel missed in his opinion, Slavery.

Red Green
11-15-2013, 02:42 PM
You'd toss capital gains taxes as well as income taxes?

Hell yeah. Everything. You should report NOTHING to the feds.

PRB
11-15-2013, 02:48 PM
If you are a new investor and lose $10,000 on your first investment you cannot deduct the loss from your ordinary income. It could take years or you may never be able to deduct your loss. However if you make $10,000 on your first investment you have to pay taxes that year.

Doesn't that depend on when the investment was made? You can't deduct every gain and loss ever year, but you can deduct the amount you invested the year you made it, can't you?

Isn't housing taxes based on your yearly estimated housing value?

ClydeCoulter
11-15-2013, 02:51 PM
In tax law, gain isn't the difference between value received and value given up. It's the difference between value received and the cost of what's given up. If your three chickens cost you $20 but the pig is worth $30, you have $10 of gain. Since you paid nothing for your labor, all of what you receive for working is gain.

Some will argue that food, shelter, clothing, etc. are required in order to work, so there is a cost in one's labor. The short answer is that these expenses would have to be incurred even if one didn't work. The legal answer is that the law views compensation for work different from gain from dealings in property. The former is included in income under Section 61(a)(1) of the Internal Revenue Code, while the latter is included under Section 61(a)(3).

That may be the law, but I disagree with it.

My time can be spent in ways other than working for someone (ie, trading time for money) such as spending time with the wife, kids, family, and friends, passing knowledge on to your children, educating yourself or growing relationships (enhancing the quality of life for many, in general). Also, there is wear-and-tear on the mind/body during that trade, some jobs causing more than others.

Also, what something is worth is arbitrary. If, in trade, an agreement is made, like the 3 chickens to a pig example, then the two parties agree that they are worth the trade. What either is worth to others is of no consequence, else the guy with the pig could have gone elsewhere.

Christian Liberty
11-15-2013, 03:02 PM
Hell yeah. Everything. You should report NOTHING to the feds.

Agree. Although I fail to see why capital gains would be handled differently than income if income taxes were a good thing to begin with (Which they aren't, obviously.)

Sonny Tufts
11-15-2013, 03:31 PM
Also, what something is worth is arbitrary. If, in trade, an agreement is made, like the 3 chickens to a pig example, then the two parties agree that they are worth the trade. What either is worth to others is of no consequence, else the guy with the pig could have gone elsewhere.

The fact that the exchanging parties agree that the items being swapped are equal in value doesn't determine whether there's been gain. Moreover, if there are market prices for the items being exchanged, the values aren't that arbitrary.

ClydeCoulter
11-15-2013, 03:43 PM
The fact that the exchanging parties agree that the items being swapped are equal in value doesn't determine whether there's been gain. Moreover, if there are market prices for the items being exchanged, the values aren't that arbitrary.

Market prices aren't for personal exchange. Sure, it can be used as a general guideline.

I have cattle. One of my cows might go for $1.20 a pound at auction, or $1.00 a pound in a personal local sale or trade. But I am not guaranteed to get $1.20 at auction, and I might even get more, but that depends on who makes bids and whether my cattle were among the first on the auction block. I might just eat the little guy. :)

A friend of mine sold his bull for less than .50 lb, because he was tired of fixing the fence and chasing him back into the pasture. It was worth it to him.

I exchange my labor, at times, for nearly or absolutely nothing. I know that if I need something down the road that the person will help me, or, I know that the other person can't afford what I would normally get. Who is going to make the call on what that is worth?

phill4paul
11-15-2013, 03:45 PM
I don't have an income. I have a flow. It comes in. It goes out.

Seraphim
11-15-2013, 03:49 PM
This x 1776.


Hell yeah. Everything. You should report NOTHING to the feds.

PaulConventionWV
11-15-2013, 04:29 PM
Because the government doesn't want to chance the market with you when it taxes you. It just wants gains, no losses... and since it has a monopoly on force, it can do that with no recourse, so pretty par for the course as far as governments go.

PaulConventionWV
11-15-2013, 04:31 PM
I don't have an income. I have a flow. It comes in. It goes out.

I see, so how could you describe that money that comes in with one word?

Red Green
11-15-2013, 04:34 PM
I see, so how could you describe that money that comes in with one word?

Revenue. Economically speaking, you only have income for period X if your wealth is greater at the end of period X than it was at the beginning.

NorthCarolinaLiberty
11-15-2013, 06:32 PM
I see, so how could you describe that money that comes in with one word?

Bypass.

PaulConventionWV
11-16-2013, 03:03 PM
Revenue. Economically speaking, you only have income for period X if your wealth is greater at the end of period X than it was at the beginning.

That's called profit.

MRK
11-16-2013, 03:40 PM
I exchange my labor, at times, for nearly or absolutely nothing. I know that if I need something down the road that the person will help me, or, I know that the other person can't afford what I would normally get. Who is going to make the call on what that is worth?

I can definitely relate to that. By chance I met a hotel and travel company owner a few days ago. After she found out what I do I gave her some free consulting advice for her businesses. She gave me a coke as I was leaving. Now I'm meeting with her tomorrow to discuss a software development deal.

Red Green
11-16-2013, 03:57 PM
That's called profit.

Not really. At least not in economics. In economics, real profits are driven down to 0 by the market.

phill4paul
11-16-2013, 05:10 PM
I see, so how could you describe that money that comes in with one word?

Flux.

jbauer
11-16-2013, 05:50 PM
Concerning taxes if you make money on a venture you have to claim the income. When you lose money on a venture you can only deduct the loss to offset gain. Does that seem like it makes any sense?

It's income if it's less than 365 days and is also a short term gian/loss which can be added/subtracted from income 100% in the current year. If you own the asset 366 days or more then it falls under the capital gains rules for which you can claim unlimited gain/loss all the way to zero. 3000 can be taken off ordinary income per year from your long term capital losses until you exhaust your losses.

jbauer
11-16-2013, 05:55 PM
Agree. Although I fail to see why capital gains would be handled differently than income if income taxes were a good thing to begin with (Which they aren't, obviously.)

It is a fairer way to deal with gains from an investment. You might only show gain from that investment 1 year. If it all fell under income taxes you'd be charged a significantly higher rate. Either way the debate on taxation is another debate.