Let's talk Stupid Taxes (& stupid Tax code) What Stupid, Unfair, or infuriating taxes did you find?

[Up2Late]

I do this every year, because it seems I find something new and ridiculous every year, so here's what I found this year that pissed me off:

1) Sale of Personal Property

If you sold an item you owned for personal use, such as a car, refrigerator, furniture, stereo, jewelry, or silverware, your gain is taxable as a capital gain. You cannot deduct a loss.

However, if you sold an item you held for investment, such as gold or silver bullion, coins, or gems, any gain is taxable as a capital gain and any loss is deductible as a capital loss.

HUH?!?! So, let me get this straight. If I find myself in the situation where I have to sell all my stuff so that I cam eat of pay my rent, I have to pay TAXES on that income AND it's NOT deductible, BUT, If I happened to be rich enough that I had GOLD or Silver Or Stocks and Bonds to sell, and I sold those at a LOSS, I have to pay TAX on them too,
BUT, I CAN deduct any losses on my Gold and Silver, if I did happen to have them? Oh That's fair. :banghead: :rant:

2) Did any of the following apply to you in 2007:

Was a beneficiary of a Canadian registered retirement savings plan (RRSP) or registered retirement income fund (RRIF) Explain This
Contributed to an RRSP or RRIF
Received a distribution from an RRSP or RRIF

So, I guess this means we can't hide our money in Canada?:shrug:

And here's a great one from my home state of Georgia:

3) Check any that applied in 2007:

Money paid to Georgia college savings plan
Money paid because of the donation of your organs
Other Adjustments that increase State Income
Other Adjustments that decrease State Income

Not much of a donation if you are getting paid to sell your internal organs, huh?:silly: :dunce:

Oh, and here's one more good one from the Feds:

4) Major Purchases

Major purchases include:
- Vehicles, including leased vehicles
- Boats
- Motor homes
- Building materials for major home improvements
- See More Examples


Major purchases do not include:
- Furniture
- Jewelry
- Home electronics
- Items purchased for your business or rental property

I'm sorry, but to me, Furniture, Jewelry, and Home electronics are about as MAJOR as my purchases are going to get,
and when the hell did a "leased vehicle" become a Major Purchase"??? :shrug::wtf:

Add anymore that you found.

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1. a minor clarification...

"HUH?!?! So, let me get this straight. If I find myself in the situation where I have to sell all my stuff so that I cam eat of pay my rent, I have to pay TAXES on that income AND it's NOT deductible, BUT, If I happened to be rich enough that I had GOLD or Silver Or Stocks and Bonds to sell, and I sold those at a LOSS, I have to pay TAX on them too,
BUT, I CAN deduct any losses on my Gold and Silver, if I did happen to have them? Oh That's fair."



on the personal property thing, you only need pay taxes on any "gain" on the sale. if you bought a guitar for $3000 and later sold it for $2000, you realized no gain on that sale. no gain, no income, no tax. if you sold the guitar for $4000, then there is a gain of $1000 and the $1000 is subject to tax.

in the $3000/$2000 scenario you in fact lost $1000 on that deal. but, because it is personal property and not an investment, they will not allow you to deduct that $1000 as a loss against other gains.

unless you can convince the irs that your guitar was an investment. and good luck with that...

[Up2Late]

3. Are you sure about that? Because I've itemized my Taxes for several years now...

...and that's not how people at TurboTax explain it.

And as far as the "...convince the irs that your guitar was an investment..." thing, I'd definitely be willing to try that one if I was in a band.

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4. yes. i'm sure...

they can't tax you if you lose money. they can only tax you if you make money (gain).

but...

the difference here is that you can't do anything with the loss. losses are key to offsetting gains. they reduce your taxable income/gains. the irs does its best to ensure regular dudes like you and me can't have any losses to offset gains.


THEY get to decide what is an acceptable loss. you can (and probably should) try to plead your case that the guitar is an investment to the irs. the key is that you have to pay all of the taxes the way the irs thinks first, only then do you get to argue your case why the irs should reverse its thinking and give you a refund.

do you see the beauty of that logic?

if you don't pay the irs way, and they rule your guitar is not an investment then you owe them more in penalties and interest.

if you DO pay the irs way, then they already have your money (no fear of penalties or interest on your part now) but no incentive on the irs to grant your request for the refund.

in other words, you are screwed.

but please don't claim any gain that is not a gain. if you lose the loss, that is just how the game is rigged.



oh, and you have to have documentation (receipt, etc.) that you actually paid $3000 for the guitar and that you sold it for $2000, showing that you made no gain. otherwise the irs will just say... "sold it for $2000? no documentation of the $3000 purchase? well then, that's a $2000 gain".

sucks to be us, huh?

[razors edge]

2. Lottery tickets are the ultimate

stupid tax.

After that, taxes on labor earned wages are next. The founders knew this leads only to slavery of the working class and spelled it out quite clearly in the constitution.

Make the profiteers pay for the privilege to make profits from investment without working a job.

[jmowreader]

9. Speaking of lottery tickets...

If you play the lottery (or the horses, like a DUer recommended one do as an investment vehicle) AND you itemize, keep track of your winnings and losses. You are allowed to deduct gambling losses up to the amount of gambling winnings.

Gambling winnings go on Line 21 ("Other Income") of the 1040; gambling losses go down as "miscellaneous expenses" on Schedule A.

[Manifestor_of_Light]

5. I won't get one of those $600 "stimulus" checks.

Because I don't have any earned income. :wtf:

America says "FUCK YOU" to the non wage earning!!!

[RB TexLa]

6. self delete, enough tax talk for the last week

[Up2Late]

7. Don't feel so bad, I'm not getting one either...

I didn't earn enough this year either, the job market doesn't just suck in Michigan, Georgia never really recovered after 2003 either, they just fake the numbers here by cutting off Unemployment Insurance after 6 months.:pals:

[Up2Late]

8. kick n/t

:kick: