All Income is to be reported

[Schifference]

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]

Of course it makes sense. How else would you handle losses?

 

[Schifference]

Losses should offset ordinary income.

 

[Schifference]

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]

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]

The Fifth Amendment would appear to preclude any form of compulsory reporting of the details of one's activities to the government.

 

[Danke]

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]

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]

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]

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]

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]

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]

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]

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]

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]

Taxation is theft.

 

[HOLLYWOOD]

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]

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

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

 

[PRB]

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]

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.