Implications of the over $600 form 1099 rule?

I can see the scenario where you trade or sell that nice Python to a dealer for $1,500 and the dealer files the 1099. The IRS then turns to you the seller and says, "You've got $1,500 undeclared income." Now, you may or may not have records documenting the acquisition price in order to cut down on tax liability. But, assuming you still have that receipt where you paid $200 for it 40-50 years ago, you now owe taxes on income of $1,300. That's how health care is going to be paid for.
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In this case you should be paying capital gain taxes on the profit from the sale. That is current law, making a lot more 1099s be filled out makes it easier to find potential audit subjects. Since I have never bought anything, except my house, that has appreciated in value, not a big worry for me. Note, that if you had sold the same rifle FTF no record would have been filed.
 
In this case you should be paying capital gain taxes on the profit from the sale. That is current law, making a lot more 1099s be filled out makes it easier to find potential audit subjects.
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That was the point of my post. And with the Bush "tax cuts" set to expire, the long term capital gains tax is increasing to 20% for most people.

From the viewpoint of a someone trading a firearm into a dealer, it might be worthwhile to structure it so that the trade-in value is less than $600 so there is no 1099 reported. You might have to pay a few bucks more for sales tax, but it won't be at a 20% rate. Of course, the trade-in value has to have some relationship to reality.
 
Your private sale of a gun to the dealer will NOT generate a 1099, unless you're selling it as "business owner KyJim". The reason why they did is that too many businesses get a bit sloppy with materials purchased and sold, those 10 guns you bought at the gun show and flipped now go on the books (actually, guns always go on the books, so the trail is always there in the first place, gun sales are probably the least affected by this rule, so use baseball cards, to stay with the example).
 
Your private sale of a gun to the dealer will NOT generate a 1099, unless you're selling it as "business owner KyJim".
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If that's the case, it's not quite as bad but still a very major hassle for businesses.
 
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