Tax events

[NY Pirate Princess]

I searched and found some information, mostly on reddit. I acknowledge that no one is giving me tax advice here. Just looking for thoughts for planning timing of potential tial sale and purchase.

Unitrd States of America Federal taxes only:

1. It is my understanding that only profit from selling a contract is taxable, not the entire proceeds from sale. There is zero chance my contract would sell for more than I purchased. If that were to happen I would gladly pay federal tax!
2. Magical beginnings is a rebate and therefore not taxable federally.

Thanks!

 

[airjay75]

I searched and found some information, mostly on reddit. I acknowledge that no one is giving me tax advice here. Just looking for thoughts for planning timing of potential tial sale and purchase.

Unitrd States of America Federal taxes only:

1. It is my understanding that only profit from selling a contract is taxable, not the entire proceeds from sale. There is zero chance my contract would sell for more than I purchased. If that were to happen I would gladly pay federal tax!
2. Magical beginnings is a rebate and therefore not taxable federally.

Thanks!

Both are basically correct. Now, if you’re not a US citizen, there is a tax law called FIRPTA that will still require 15% of the total sales proceeds to be withheld to the US government. Since you have no gain, you could either (a) attempt to obtain a withholding exemption in advance, or (b) later file a US tax return and claim a refund for the amounts withheld.

 

[NY Pirate Princess]

Both are basically correct. Now, if you’re not a US citizen, there is a tax law called FIRPTA that will still require 15% of the total sales proceeds to be withheld to the US government. Since you have not gain, you could either (a) attempt to obtain a withholding exemption in advance, or (b) later file a US tax return and claim a refund for the amounts withheld.

Thank you! US citizen. Differentiating between federal and state taxes in my post.