need good advice from a professional accredited attorney

[farmer_giles_of_ham]

Originally Posted by fulltitle

Without Prejudice.
The W2 may have likely been born out of a W4 contract. All the arguing about what is or isnt gross income without knowing about the significance of how one endorses one's paychecks or the like might be useless and potentially trouble-making huff. I wouldnt touch a W4..maybe a W8.

that's probably the more relevant point anyway.

So maybe on the "correction form" it should be noted: "all benefits opportunities and privileges denied, rejected and disavowed"

And lets keep in mind par value. $50 u.s legal tender gold coin is worth 1000 bux or more these days...the minimum standard deduction is (i think) $7500.

So thats 150 of these coins, worth to us about 150,000 bux, tax free even if held to be "gross income". Recent aquitals/hung jury in Las Vegas gives a real-life precedent. (funny how judge rulings are precedent but jury rulings aren't...)

This could be structured on paper.

[mertensv16]

Originally Posted by farmer_giles_of_ham

Yes, he did pay for their work. His basis cost was the product of their work, which was lost to them in the transaction. This is no "expense"; this is an original pre-paid credit.

This is gibberish. He paid nothing, and therefore he has no deduction. Why do you think it's called a deduction for business expenses? He incurred no expense.

It's the same as if I have a pair of shoes and sell them. The basis cost was the fair-market value of the same, as indicated by the sale price.

Wrong. Your basis is what you paid for the shoes, not what their market value is. This has already been explained to you.

Had the same item been damaged or stolen this would be a loss in the same amount. It's equally a loss when I give them up. I dont have the shoes anymore. I am out one (1) pair of shoes. The cost here is the sum total of this pair of shoes.

Wrong again. Your deduction for a loss is limited to your cost basis in the shoes. See Sections 165 (a) and (b) of the Code:

(a) General rule
There shall be allowed as a deduction any loss sustained during the taxable year and not compensated for by insurance or otherwise.

(b) Amount of deduction
For purposes of subsection (a), the basis for determining the amount of the deduction for any loss shall be the adjusted basis provided in section 1011 for determining the loss from the sale or other disposition of property.

Your basis is what you paid for them. Section 1012 of the Code. There are exceptions to the cost basis rule -- for example, if you had inherited the shoes, your basis would be the fair market value of the shoes as of the decedent's death. But basis is never the fair market value at the time of the exchange.

If everyone's basis for determining gain or loss were always value instead of cost, then no one would ever have taxable gain. I could buy a stock for $100, sell it for $1 million, and have no reportable gain. You may think this is the law, but in the real world it's otherwise.

[farmer_giles_of_ham]

Your deduction for a loss is limited to your cost basis in the shoes. See Sections 165 (a) and (b) of the Code:

Quote:
(a) General rule
There shall be allowed as a deduction any loss sustained during the taxable year and not compensated for by insurance or otherwise.

(b) Amount of deduction
For purposes of subsection (a), the basis for determining the amount of the deduction for any loss shall be the adjusted basis provided in section 1011 for determining the loss from the sale or other disposition of property.

Who cares? We aren't talking about deductions, we are talking about even getting to the point of "capital gains income", which occurs BEFORE deductions: the subject of this thread pertains to "gross".

This has already been explained to you.

Nice though to see that even "deductions" recognize that there is some basis cost for these shoes, or for the farmer's produce, or whatever.

But basis is never the fair market value at the time of the exchange.

But it ain't zero, neither.

If everyone's basis for determining gain or loss were always value instead of cost, then no one would ever have taxable gain. I could buy a stock for $100, sell it for $1 million, and have no reportable gain

I'll take cost, we can argue about it in court if need be. And that really only applies to publicly-traded situations.

Besides I bought that million and paid for it in full. I sold nothing, I realized no gain. And "fair market value" is an IRS term- there has to be some way to calculate costs. There is no fiscal difference between cash and other valuable items. So how is there any difference between selling $100 of groceries or stocks or cows, and selling $100?

There isn't any reportable gain except for u.s. citizens, which should say something right there. It's so amorphous that only the pledged bond-servant could be expected to speculate (idolize) on his god's wishes- and held to this duty by criminal liability..."he ought to have known better". But this will still always be so subjective as to offer the defense of "not willful".

Of course even if option #1 fails ("even-exchange based on cost")...that leaves #2,3,4 etc. "Loan proceeds" is a very hard nut to crack. Instead of selling my capital I use it for collateral and just borrow against it, or use it to finance a 'caution' policy against investment losses.

Thats the beauty of "can"- various modalities become available. There is always a remedy. It just depends where your sympathies lie: if you want to find it, or block it. Spouting gibberish sometimes will do the trick, and sometimes you will find that doesn't work anymore.

You may think this is the law, but in the real world it's otherwise.

[mertensv16]

Originally Posted by farmer_giles_of_ham

Who cares? We aren't talking about deductions, we are talking about even getting to the point of "capital gains income", which occurs BEFORE deductions: the subject of this thread pertains to "gross".

This has already been explained to you.

No, it hasn't, because I'd have remembered something so incoherent.

I'll take cost, we can argue about it in court if need be. And that really only applies to publicly-traded situations.

Your ignorance is truly astonishing. The cost basis rule applies to ALL sales and exchanges, whether the subject is publicly-traded securities, real estate, baseball trading cards, used cars, or whatever.

There isn't any reportable gain except for u.s. citizens, which should say something right there.

Where did you get the notion that including gain from a sale or exchange in gross income is limited to U.S. citizens? Resident aliens and certain nonresident aliens are subject to the same rule.

Of course even if option #1 fails ("even-exchange based on cost")...that leaves #2,3,4 etc. "Loan proceeds" is a very hard nut to crack. Instead of selling my capital I use it for collateral and just borrow against it, or use it to finance a 'caution' policy against investment losses.

It's also a very hard fact to establish when (a) the other party to the transaction says, "Loan? What loan? I just paid the guy $100K in salary. There was no loan.", and (b) there's no documentary evidence prepared before the fact evidencing a loan.

There is always a remedy.

No, there isn't.

[farmer_giles_of_ham]

It's also a very hard fact to establish when (a) the other party to the transaction says, "Loan? What loan? I just paid the guy $100K in salary. There was no loan.", and (b) there's no documentary evidence prepared before the fact evidencing a loan.

I shall keep that in mind! This is the point I have been trying to stress on a few threads now. Now you have confirmed it.

Of course there is that clash of beliefs...and this is the proof of the whole matter in the first place: why is ANY characterization more accurate than another? It's all subjective, not truly economic or mathematic.

but...

Originally Posted by farmer_giles_of_ham
Who cares? We aren't talking about deductions, we are talking about even getting to the point of "capital gains income", which occurs BEFORE deductions: the subject of this thread pertains to "gross".

This has already been explained to you.

If you really cant understand this... its no wonder you cant see the remedy. Maybe you just don't want to see it. Yes, its "u.s.persons and others treated as such for tax purpose..." not merely 'u.s. citizens'. Your speech is more accurate than mine.

Maybe you can convince a jury that nerdliness is next to godliness. To "para-quote" a fellow poster on a different thread:

ezrhythm:
Woe unto those who nit pick irrelevance and perpetuate the deception!

The remedy,though, is in the bigger picture.

[mrg]

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