Which part, the Tax Must Be an Income Tax section. Or the part in the section after that defining what an Income Tax is.

So yes the foreign levy could be named the Turnip & Potato Soup Sales Tax, but if it functions like an income tax in the U.S. sense you get to claim the credit. If it doesn't you don't.

Holy sheet man. I mean Hoo-lee Shee-at! You really have no clue.

#1, yes they gained something. A big freaking pile of jewels with an estimated value of 350K. Whether or not they have to pay tax immediately (that year or quarter) on inventory not yet sold depends on the nature of the business and varies between industries.

#2 there are yearly limits to the total value of "gifts" from one person to another. In any event as soon as they give it away it triggers income tax, if it hasn't already been paid, based on FMV because it has now gone from business inventory into the personal possesion of the first PC before being given away as a gift to the other PCs. Definately income.

Selling it legally should get them much more money, but take a much longer time. It really isn't more complicated than that, and there's no need to discuss the tax codes of 2070 in order to make up ways to rip off your player characters.

Rip off?

"My PC makes a Nightsky Limo."
"Ok, how much money do you have and what is your Mechanics Skill."
"I'm broke and I don't have the Skill. I'm just going to make the limo."
"You need to buy materials and parts and an area to work it."
"The parts, tools, and work area are just part of my lifestyle, and I download the instructions for making it off the Matrix."
"But you have a Street Lifestyle squatting in a Barrens backalley. You don't even own a commlink."
"Ya, lots of room in that alley to build a limo. Come on, stop ripping me off and penalizing me for my creativity!"

After all that is only roughly 120K worth of gear, which is less than the difference in cash we are talking about.

Ayup. Using a different, more absurd example, won't change that.

If the GM (who, by now, must already have arrived at a solution that's satisfactory to him) feels selling those jewels at a percentage larger than 30% would put too much money in the hands of the players, he should talk to the group and explain his reasons, rather than come up with an unilateral in-game excuse. I don't think selling these jewels is that important to the story, and is probably something that would be handled in downtime, so there's no need for "deep immersion" here.

I still think selling them legally should be more profitable than doing it through the black market, tough.

It isn't really isn't that much more absurd.

He was already talking to them. He was looking for justifications for the 30% rule. The reasoning behind that sort of markdown. Income tax is part of the reason you often lesser prices on the blackmarket, because the legal market has extra costs associated with it.

Looking back through my posts. http://forums.dumpshock.com/index.php?show...t=0#entry366017

It just isn't something grossly over the 30%, and it helps show why 30% isn't really out of line.

You're confusing personal and business taxes again. You don't pay business taxes when you sell off grandma's jewels. You don't need to be a business to sell things, otherwise kids soccer teams couldn't have bake sales. The jewelry can be declared as one PC's personal property before it's gifted. And since it's not a business, it's not inventory, and inventory taxes don't apply.

According to the IRS tax codes, which are the final authority for the USA, the recipient doesn't pay anything. The giver might have to declare the gift on his taxes, but if you read the pdf on gift/estate taxes, you'll see that the exemption runs up to 1 million dollars. And it *still* hasn't gone from business to personal posession, if they declare it as personal property in the first place. We've already established that they can then sell it for less than FMV, and claim a tax rebate based on it. In short, they're scot-free. As a GM, I'd congratulate my players on being creative, and start anticipating how it might change my game, and discuss that direction with them. Why on earth would you throw boulder after boulder in their path? Don't you like creative players?

Look, the tax codes don't support your position. You're wrong, you didn't read far enough, and you went out on a limb. You can back off now, and we won't think any less of you for it.

Depending on the product, you often see higher prices on the black market. What you're paying for is partly convenience-- you don't have to register the gun, or go through a waiting period, or pass a mandatory safety class. Income tax doesn't have a lot to do with it; that's just something a frightened GM would pull out of his ass as a random obstacle. There are better justifications for the 30% rule-- "hot" merchandise, "used" merchandise, knock-offs, and so on. Just go down to your local pawn shop, and see for yourself-- you won't find 350,000 worth of jewelry sitting in their cases.

Now, I *do* agree with setting a reasonable delay on them getting the cash. It takes time to set up an auction, get word out to potential buyers, and so on. Not everyone and their brother can afford, let alone be interested in, super high-end jewelry; you definitely wouldn't want to sell on Ebay.

Every time you open your mouth you expose your ignorance of the topic even more. It is a business, a salvage business. A personal business. Something you apparently have no experience with. Some people with personal businesses and even closely held incoporated businesses will tend to treat the business property like it was personal proprety. But it's not, and if they get caught it hurts because they get assessed the taxes AND a nice penalty on top. Sometimes even criminal charges.

These aren't their grandma's jewels (if they would likely have been taxed at the point of inheretance). They could try lie about where the jewelry came from. But they'd have to create a large data trail including dropping data into very secure systems about taxes being paid for it and such. You know, like something a fence could do. A fence that only buys stuff for around 30% because it is risky and requires contacts and skills to clean up the goods.

So did you notice the $11,000 reporting limit on gifts? Did you even engage your brain to wonder why that is there? That is there to help detect, investigate, thwart, and procecute exactly the type of tax evasion scheme you were proposing. See when you report it they say things like "so where did this come from?" and "your tax returns don't show any way you could afford this kind of item." If you say it was a gift from Grandma, or she left it to me when she died "really, you didn't pay any inheretance tax, and I don't see any reporting of it as a gift".


Is there an accountant in the house?

The thing about "artifacts" is that Joe Street can't sell them. Ask the people who found the T-Rex skeleton that the government took away (she was called Sue)

That's an interesting angle though... what if Seattle classified them as artifacts and demanded they be turned over to be put in a museum?

Mmm-hmm. Dude, do you always resort to insults when the facts go against your imagination? The players don't have a legal salvage business, they have a shadow business that does salvage.

Now, I'll happily entertain *facts* on the topic of taxation. You can provide links to the IRS code, and back up your words; or you can keep trying to pretend your opinions are better than the facts. Reading the tax codes is often a great help, I've discovered.

I have a personal business. Do you? Or do you have as much personal business experience as you do with tax preparation and internet ettiquette? :cute:

Wrong again. Check the links I provided earlier. The recipient never has to pay taxes on gifts or inheritances in normal circumstances. The *estate* has to pay taxes, but only if it was worth more than 1 million in the first place.

See? Facts are useful things.

The reporting limit is for the estate, not the recipient. If you'd stop trying to make feeble insults, you could have caught that mistake. At any event, the tax evasions usually happen on the estate end, not on the recipient's. And once again, the applicable tax laws clearly state that the recipient never pays any taxes on inheritances, and the estate only has to pay taxes if it's over a million.

Now, of course, you can change this all in your games, if it suits you. But I believe in fair play, so if my players do something creative like this, I'd congratulate them on outsmarting me. GM's that start frothing at the mouth when their players act intelligently, IME, have serious self-esteem issues.

After posting the links to the actual laws, you *still* need an accountant? You don't do your own taxes, do you? Don't feel ashamed, a lot of people think the 1040 EZ form is hard. As a peace offering, I'll be glad to help you with this year's taxes-- they're usually straightforward if you've only got one or two sources of income. I'll be glad to show you that the tax laws aren't that difficult, and nothing to be scared of.

Inheretance tax only comes into it if you are trying to lie about where it is from. Trying to gift the jewels is a problem because of the data trail it requires, and what he was proposing to do is illegal because it wasn't intended as a gift at all.

But really the confusion is Cain thinking that it isn't already taxable before that point.

All it takes to clear this up, if Cain does indeed have a personal business, is for him to talk to his accountant. If he doesn't have an accountant I'm not sure exactly what this personal business is, but if it is more than cutting his neighbor's lawn he better hope he never gets audited.

That's not even about taxing. That is about ownership. It took them several years of court battles to prove that they could salvage it, that Spain had legally "abandoned" these ships that had sunk several centuries before.

The IRS comes in after that. It gets complicated here because he isn't selling all the items. A large of number of them he is allowing to be put on public display in museums, which can get a huge amount of tax relief by bringing down what portion of the FMV he has and what has been donated. Donating is not to be confused with a gift to a friend though. The FMV of artifacts is also very disputable due to the odd nature of that market.

As has also been mentioned before, abandonment is going to be a big issue in LA because of the scale of the disaster and it having happened just a short period before. Even worse is that fact that lots of people know it is there so even if you could prove it was abondoned there would be lots of salvage claims being made. Toss on top that the offical line is that it is all coming back up shortly and abandonment becomes extremely difficult to prove. You can't claim salvage if you can't prove abandonment.

Expecting to cowboy in in a dive suit, grab what you want, leave, and have it all nice and legal? The team didn't seem to do much if any legwork up front in this case for legally salvaging. EDIT That of course is based on the GM description, which is going to be incomplete. The players might have a different story.


Post Script

This thread isn't rhetorical because there are plenty of games that are going to run into this. That is how obvious the potential for underwater loot is in LA. Underscoring how everyone and his dog are going to be scouring the area. Legally and otherwise.

It is sad that after all this apparently it is going to take an actual accountant coming in to set your head straight. I tried my best, and I thought I had gotten through to you. But your head is apparently a lot thicker than I suspected.

Do I do my own taxes?

I do file the in-law's taxes because they are more "normal" income tax returns (involving some home business income which ties into our taxes, some capital gains, and a couple of pensions). I don't do my parents taxes because they do their own, always have. Which is no small feat since it is a business, farming. But given my tax situation, no I don't anymore. I used to but since it now involves myself, my wife, business that is over a decade old and has been incorporated for probably about 9 years, a couple of trust funds for my kids, some transactions between the trust funds and a publicly traded company run by our finicial lawyers to minimize our taxes, and payroll for our live-in nanny. So I let our accountant and our financial lawyer take care of drawing up all the documents. We just sit down and read the packages before signing.

However the lawyers and accountants do explain up front what is going on, and how to structure our business and finances to minimize the income tax. After all we do need to understand what we could be doing, and what we shouldn't be doing, and to let them know what we want done.


So you should find it understandable that I'm going to turn down your offer of doing my taxes. Especially since it seems likely that doing so would end up with me in jail as some good ol' boy's shower toy. Good luck on yours. It sure would be entertaining to be the fly on the wall as you put up your patented Wall of Logic to a revenue agent.

Unless something is bringing in income, it's not taxable. You don't pay taxes on the jewelry sitting on your dresser. And the IRS isn't some sort of omniscient boogeyman that knows the contents of your sock drawer. I've got items that have been passed down for several generations; none of it has ever mattered on taxes, because it's not work enough to even raise an eyebrow. The tax booklets are pretty clear on that.

You really shouldn't take tax advice from Elvis, and I think your tin foil hat is blocking your reception.

You do all that, and you still don't understand anything about the inheritance and gift taxes? Your accountant also helps you pay your grocery bills each month, right?

You don't actually read the tax forms or tax laws, and you think that? No wonder why you're having trouble understand what the IRS is actually publishing, you're used to having someone else do your thinking for you. That also explains all the logical mistakes you've been making-- it's not your fault, you're just not used to coming up with your own answers. You're making all these claims, but you saw the links I posted. Where on earth are you getting all this from? Certainly not the tax laws.

The links I posted made it abundantly clear that the recipient *never* has to pay taxes on gifts recieved. The giver doesn't have to pay taxes on them, either; the limit doesn't apply until you've given over a million dollars. This is easier than the 1040 forms; you just have to read it for yourself instead of taking what someone else told you.

If this is what your accountant is telling you, I'd get a new one, fast. He'll end up with you and your entire family worried about dropping the soap in the shower, while he sips mimosas in the Caymans. You could really protect yourself if you'd actually read the tax laws, for once. And save yourself the humiliation of making such a huge mistake on a public forum.

Yup, and when you sell 100's of thousands of dollars in jewels the government is going to come sniffing around looking for something to tax or stolen goodies. If you say you got the jewels as a gift from a friend and that what you recieved from the sale is at or below the FMV of the jewels when you recieved them from your friend? They'll then go talk to your friend and ask them where all these jewels came from. When you friend tells them that he salvaged the jewels? That's when the akward question about why he didn't report the income comes up.

The person salvaging the jewels, in truth more likely to be ruled theft in this case, gained wealth. He spent the wealth on a gift to another person. He didn't report the income. He is fcuked. It doesn't matter if he never converted it into cash himself. Not converting it to cash and not reporting the gift just delayed the government coming looking for their money.

If they can't find this friend they come back to the guy that sold the jewels and start asking him very pointed questions.

Then they start siezing things and taking people to court.

They are an insistant and persistant bunch when they smell blood in the water. They know someone somewhere had some income and they aren't going to stop until taxes are assigned and collected on the entirty of the value of the sale. Multiple times over if they can, with nasty penalties tacked on.


Reading

I guess I was wrong. Wrong that you'd ever take a tax accountant's word for it. Judging from your posts so far you'd just cut them down as not being able to read or do their job, and proudly state you knew better and they should just take up being a Fry Guy at McDonalds.

Yup, you da man. Bye.

Unless you are the accountant, this is unfair. I know several accountants that do not know the entirety of the tax law. It is almost impossible to know it entirely. So they do what is safe, because when you get audited, they have to defend the return they prepared. They are not going to be aggressive about deductions or exemptions or suggest things that are in the gray area, they are going to stay firmly in the black and white.

I am very curious about this. I have never heard anything like it. Which link, or do I have to read them all?

Sure it is fair. He just told me if the accountant said that that I was being bamboozled or mislead. So if I called up Al and asked him to give me a direct quote do you really think Cain would say anything that different?

This isn't about knowing the entirity of the laws. This is about understanding a basic principle. Cain's basic thrust is that because the person that pulled up the jewelry didn't sell it for cash he didn't have an income. But income can come in the form of cash, property, or even services. Cain simply isn't grasping this. It likely even talks about this somewhere on that IRS site he linked. I don't know if he didn't try to find it, or his self-proclaimed infailable reading skills came up short again.


You'll find language talking about cash, property, services, incentives, etc. repeatedly in laws, and not just tax laws, regulations, and directives, whenever it is important to identify someone recieving a payment or having a finacial gain. The IRS wants to tax people even if they are bartering. Especially if they are bartering, those damn commies.


EDIT Just for giggles I thought I'd take a peek to see if I could find something about it. It only took a couple of minutes to locate and is, not surprisingly, close to my wording.

But this isn't really that surprising when you stop to think about the conciquences for what Cain is trying to claim would work. I want to run a mine but not pay any income taxes. So I start up a company to dig the mineral out of the ground. It gives me all the ore it digs out as a gift. I turn around and sell the gift ore. Income tax free money!

You can find it here:
"The person who receives your gift does not have to report the gift to the IRS or pay gift or income tax on its value."

Ooh! Ooh! Do they eat babies, too?

Dude, chill. The IRS isn't some sort of Big Bad Monster that watches your every move. I can't help but wonder why you're so scared of them, if you've actually read any of the tax codes. If you really think the IRS is chomping at the bit to hunt down people for the slightest tax mistake, your tin foil hat seriously needs adjusting.

Actually, you're the one who's not grasping anything. Nowhere have I said that property!= income. However, the property that is specifically mentioned are usually purchases, and entail things like homes and cars. In fact, if you'd read your Publication 525 a little further, you'd see this line:

"Generally, you must report in gross income everything you recieve in payment for personal services."

In other words, the tax laws once again make it perfectly clear that you never have to pay taxes on gifts. I've provided the link twice, now. You've yet to link to an actual IRS document once-- you've only posted a small snippet taken out of context. Are you unaware of how weak your position is, or are you just trying to shore up a weak argument and hoping we don't notice?

If this is the sort of tax advice your accountant is giving you, I'd be very worried. Personally, if it meant that I could protect my family, I'd read every last tax code in existance, and make sure I understood it. But I understand that some people have different priorities.

Okay, this I knew about, but I thought you were claiming they could gift in the amount of hundreds of thousands of dollars.

So are you trying to say that a whole country that is run like a corporation has a tribal philosophy of property ownership (and no taxation)?

Oh, there's no limit on the amount you can gift to someone. It's just that if you give over 1 million, you have to pay taxes on it. This is baked into the inheritance tax laws; if someone dies and leaves you their farm, the estate will have to pay taxes on it.

It makes a good point of reference. However, you're right about one thing: with the balkanization of North America, it'd be pretty hard to track the jewelry as it crosses country borders.

Okay, what about this big range from $11,001 to $999,999. Is this somehow not taxable under the inheritance laws, or ...? This also happens to be right in the range of the salvaged jewelry so is the point of the thread.

In theory, it has to be reported. This is where Brahm is wigging out, thinking that the IRS boogeyman is going to hunt him down for thinking bad thoughts. In practice, the IRS seldom if ever checks where the property came from. If you give someone a car, the IRS isn't going to track down the vehicle's entire history to make sure you bought it legally-- that's a job for local police and the DoL.

I thought LA was still an independant city? Because if it is PCC that's a lock, unless the PC holds a PCC share they cannot conduct business in the PCC.

EDIT: If the GM let the PC have a free PCC residency share as part of character creation that would be an issue. I'm not sure if there is a specific canon price, but it is going to be worth a substantial amount of money.

You.
Drooling.
Moron.

If you have a whole bunch of wealth that doesn't make sense they are going to check to see where it comes from. For small amounts this would easily slip by, it isn't particularly cost effective to track. That is why a lot of people effectively break tax laws and nothing comes of it. The small stuff just isn't cost effective to watch for. Also if it doesn't come through something that can easily be tracked.

But as soon as you put yourself on the radar by selling something through a public marketplace that can easily be watched is when flags get raised. When a flag gets raised they sure as hell do want to know why a "gift" of that size wasn't reported, and where it came from.

Oh my god. I'm talking about the person that salvaged it. So your are still insisting that the example I gave is true?

Hey, change it from a company and the miner to a miner and spouse. "Gifts" are entirely fine to give between husband and wife. That way the spouse can gift it back.

Hi! Bye!

Do you *honestly* think the IRS watches every single transaction that occurs on Ebay Motors? Every single classified ad for cars? You really *must* believe that Elvis died for your sins.

I ignored it to spare you, but if you insist...

First and foremost, you're presetning a Straw Man fallacy. At no point in the original discussion does a legal business enter into it, destroying your premise. That also means you've got a False Analogy error going. You're also using Argumentum ad consequentiam, appeal to consequences, saying that the potentially disagreeable consequences of the premise must therefore make it false. You're also making multiple Ad Hominem fallacies, further showing the weakness of your position.

If you're going to participate in logical debate, you not only need to stop making so many logical fallacies per sentence, but you have to realize that we have noticed the flaws in your position. If you can provide a well-supported, reasonable, logical argument based on facts, you'd be doing much better. But until then, I can keep using your posts as examples of fallacies in my logic courses. I should thank you for saving me some homework time; I couldn't come up with better examples of flawed logic on my own.