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Bank Reports and IRS after Aircraft Sale

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rhdudley1(at)bellsouth.ne
Guest

Posted: Fri Apr 04, 2008 9:50 am Post subject: Bank Reports and IRS after Aircraft Sale

Listers, 

These are questions for anyone who has built and sold an OBAM/Amateur Built  Aircraft. Once the buyer has paid you for the aircraft by whatever means:  electronic transfer, cashier’s check, certified check or cash, and that 5+  figure amount is put into your "whatever" account, anything over $10K requires  the bank or other financial institution to report it to some federal government  agency since there is concern about the cleanliness of the money.  

My questions are: 

1. What sort of information will the seller be required to provide ? 

2. What are the IRS implications/requirements for accounting for and  reporting the sale amount? 

    A. Is there a requirement to account for the materials and  parts cost of building? 

    B. Are the labor hours of building of any consequence?  OR 

    C. Is the difference between costs of materials and parts  and the sale price called "ordinary income". 

  

Thanks for any experience or insight. 

  

Regards, 

  

Richard Dudley 

RV-6A

    [quote][b]

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Bruce(at)glasair.org
Guest

Posted: Fri Apr 04, 2008 10:19 am Post subject: Bank Reports and IRS after Aircraft Sale

I'm not a  lawyer but I believe that the 10k rule applies to cash transactions only. Any  other method, check, wire transfer, etc, leaves a paper trail. Which is all the  feds are concerned about.

  

  

  

Bruce 

www.Glasair.org 

<?xml:namespace prefix = o ns =  "urn:schemas-microsoft-com:office:office" /> 

 [quote]   

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bo124rs(at)hotmail.com
Guest

Posted: Fri Apr 04, 2008 11:50 am Post subject: Bank Reports and IRS after Aircraft Sale

Richard, there is no reporting requirement by banks to the IRS unless it is a cash transaction of 10K or over.  Multiple cash transactions in repetition that indicate an attempt to circumvent the 10K cash transaction reporting requirements, will give rise to the bank notifying the IRS.  Unless you are in the business of selling airplanes, there are no income tax implications attached to the sale of personal property.  No need to worry about cost, labor, whatever.



Remember, you got what you paid for.  I only license to practice in KY.



Dana Overall  

Richmond, KY i39 

RV-7 slider "Black Magic"  Flying

O 360 A1A, C/S C2YR-1BF/F7666A4 

http://rvflying.tripod.com/firstflight_010.jpg

http://www.youtube.com/watch?v=MMi05-WU2D0#GU5U2spHI_4

http://rvflying.tripod.com 

do not archive 



 	  Quote: 	
		  From: rhdudley1(at)bellsouth.net

To: rv-list(at)matronics.com

Subject: Bank Reports and IRS after Aircraft Sale

Date: Fri, 4 Apr 2008 13:45:43 -0400



           Listers,

 These are questions for anyone who has built and sold an OBAM/Amateur Built  Aircraft. Once the buyer has paid you for the aircraft by whatever means:  electronic transfer, cashier’s check, certified check or cash, and that 5+  figure amount is put into your "whatever" account, anything over $10K requires  the bank or other financial institution to report it to some federal government  agency since there is concern about the cleanliness of the money. 

 My questions are:

 1. What sort of information will the seller be required to provide ?

 2. What are the IRS implications/requirements for accounting for and  reporting the sale amount?

     A. Is there a requirement to account for the materials and  parts cost of building?

     B. Are the labor hours of building of any consequence?  OR

     C. Is the difference between costs of materials and parts  and the sale price called "ordinary income".

  

 Thanks for any experience or insight.

  

 Regards,

  

 Richard Dudley

 RV-6A



     	  Quote: 	
		  



t="_blank">http://www.matronics.com/Navigator?RV-List

tp://forums.matronics.com

_blank">http://www.matronics.com/contribution



	
	
More immediate than e-mail? Get instant access with Windows Live Messenger.  [quote][b]

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pitts_pilot(at)bellsouth.
Guest

Posted: Fri Apr 04, 2008 12:19 pm Post subject: Bank Reports and IRS after Aircraft Sale

Richard Dudley wrote:

  	  Quote: 	
		                 

Listers,   

These are questions for anyone who has built and sold an OBAM/Amateur Built Aircraft. Once the buyer has paid you for the aircraft by whatever means: electronic transfer, cashier’s check, certified check or cash, and that 5+ figure amount is put into your "whatever" account, anything over $10K requires the bank or other financial institution to report it to some federal government agency since there is concern about the cleanliness of the money.   

 	
 This is true only if it's CASH!

  	  Quote: 	
		        

    

My questions are:   

1. What sort of information will the seller be required to provide ?   

 	
 None ..... well, see below.

  	  Quote: 	
		        

2. What are the IRS implications/requirements for accounting for and reporting the sale amount?   

 	
 My info is old, so check the present validity.  If it's cash, you must provide Who you got it from (SS# if possible) and why the transaction was in cash etc.  I deal in much larger quantities than 10K, but only in those methods EXCEPT CASH.

  	  Quote: 	
		        

    A. Is there a requirement to account for the materials and parts cost of building?   

 	
 I guess if you're telling the IRS that you sold an airplane for profit ... that's your fault.  Would you include the sale of a car you fixed up and sold???  I think not.

  	  Quote: 	
		        

    B. Are the labor hours of building of any consequence?   

 	
 I doubt it.

  	  Quote: 	
		        

 OR   

    C. Is the difference between costs of materials and parts and the sale price called "ordinary income".   

 	
 This would be the case if you report it.  However, if the transaction method is something other than cash ....... How do they know that you even had an airplane ..... unless you've been deducting it etc.????   	  Quote: 	
		        

Thanks for any experience or insight.   

 	
 Well, maybe not experience in selling stuff ..... The only thing I ever got rid of was my first wife, but I do have to file income tax.

 

 This posting is for entertainment purposes only and should not be taken as advise on how to maintain or operate an aircraft or any financial transaction.

 Linn ...... 

 do not archive

 [quote]      

    

Regards,   

    

Richard Dudley   

RV-6A   

    	  Quote: 	
		  

	
 [b]

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ceengland(at)bellsouth.ne
Guest

Posted: Fri Apr 04, 2008 1:40 pm Post subject: Bank Reports and IRS after Aircraft Sale

RE: income tax implications:

Aren't you legally obligated to pay either capital gains or income tax 

on the difference between cost & sale price if you sell for more than 

you paid. There's even a place on the tax return for 'hobby income'.



Whether you choose to do the legal thing or the American thing is 

another question. 



Charlie



Dana Overall wrote:

 	  Quote: 	
		   Richard, there is no reporting requirement by banks to the IRS unless 

 it is a cash transaction of 10K or over.  Multiple cash transactions 

 in repetition that indicate an attempt to circumvent the 10K cash 

 transaction reporting requirements, will give rise to the bank 

 notifying the IRS.  Unless you are in the business of selling 

 airplanes, there are no income tax implications attached to the sale 

 of personal property.  No need to worry about cost, labor, whatever.



 Remember, you got what you paid for.  I only license to practice in KY.



 Dana Overall

 Richmond, KY i39

 RV-7 slider "Black Magic" Flying

 O 360 A1A, C/S C2YR-1BF/F7666A4

 http://rvflying.tripod.com/firstflight_010.jpg

 http://www.youtube.com/watch?v=MMi05-WU2D0#GU5U2spHI_4

 http://rvflying.tripod.com

 do not archive



     ------------------------------------------------------------------------

     From: rhdudley1(at)bellsouth.net

     To: rv-list(at)matronics.com

     Subject: Bank Reports and IRS after Aircraft Sale

     Date: Fri, 4 Apr 2008 13:45:43 -0400



     Listers,

     These are questions for anyone who has built and sold an

     OBAM/Amateur Built Aircraft. Once the buyer has paid you for the

     aircraft by whatever means: electronic transfer, cashier’s check,

     certified check or cash, and that 5+ figure amount is put into

     your "whatever" account, anything over $10K requires the bank or

     other financial institution to report it to some federal

     government agency since there is concern about the cleanliness of

     the money.

     My questions are:

     1. What sort of information will the seller be required to provide ?

     2. What are the IRS implications/requirements for accounting for

     and reporting the sale amount?

         A. Is there a requirement to account for the materials and

     parts cost of building?

         B. Are the labor hours of building of any consequence? *OR*

         C. Is the difference between costs of materials and parts and

     the sale price called "ordinary income".

      

     Thanks for any experience or insight.

      

     Regards,

      

     Richard Dudley

     RV-6A

- The Matronics RV-List Email Forum -

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acepilot(at)bloomer.net
Guest

Posted: Fri Apr 04, 2008 1:51 pm Post subject: Bank Reports and IRS after Aircraft Sale

That's why I've heard of a lot of planes being sold for "$1 plus other 

valuable consideration."  Even I wouldn't mind paying tax on a buck   

(and the other valuable consideration might consist of a verbal "I won't 

sue you if it falls apart"...)



Scott

Charlie England wrote:



 	  Quote: 	
		   



 RE: income tax implications:

 Aren't you legally obligated to pay either capital gains or income tax 

 on the difference between cost & sale price if you sell for more than 

 you paid. There's even a place on the tax return for 'hobby income'.



 Whether you choose to do the legal thing or the American thing is 

 another question. 



 Charlie



 Dana Overall wrote:



> Richard, there is no reporting requirement by banks to the IRS unless 

> it is a cash transaction of 10K or over.  Multiple cash transactions 

> in repetition that indicate an attempt to circumvent the 10K cash 

> transaction reporting requirements, will give rise to the bank 

> notifying the IRS.  Unless you are in the business of selling 

> airplanes, there are no income tax implications attached to the sale 

> of personal property.  No need to worry about cost, labor, whatever.

>

> Remember, you got what you paid for.  I only license to practice in KY.

>

> Dana Overall

> Richmond, KY i39

> RV-7 slider "Black Magic" Flying

> O 360 A1A, C/S C2YR-1BF/F7666A4

> http://rvflying.tripod.com/firstflight_010.jpg

> http://www.youtube.com/watch?v=MMi05-WU2D0#GU5U2spHI_4

> http://rvflying.tripod.com

> do not archive

>

>     

> ------------------------------------------------------------------------

>     From: rhdudley1(at)bellsouth.net

>     To: rv-list(at)matronics.com

>     Subject: Bank Reports and IRS after Aircraft Sale

>     Date: Fri, 4 Apr 2008 13:45:43 -0400

>

>     Listers,

>     These are questions for anyone who has built and sold an

>     OBAM/Amateur Built Aircraft. Once the buyer has paid you for the

>     aircraft by whatever means: electronic transfer, cashier’s check,

>     certified check or cash, and that 5+ figure amount is put into

>     your "whatever" account, anything over $10K requires the bank or

>     other financial institution to report it to some federal

>     government agency since there is concern about the cleanliness of

>     the money.

>     My questions are:

>     1. What sort of information will the seller be required to provide ?

>     2. What are the IRS implications/requirements for accounting for

>     and reporting the sale amount?

>         A. Is there a requirement to account for the materials and

>     parts cost of building?

>         B. Are the labor hours of building of any consequence? *OR*

>         C. Is the difference between costs of materials and parts and

>     the sale price called "ordinary income".

>          Thanks for any experience or insight.

>          Regards,

>          Richard Dudley

>     RV-6A

>




	


-- 

Scott

http://corbenflyer.tripod.com/

Flying Corben Junior Ace - Building RV-4

Gotta Fly or Gonna Die

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bo124rs(at)hotmail.com
Guest

Posted: Fri Apr 04, 2008 4:23 pm Post subject: Bank Reports and IRS after Aircraft Sale

Guys, I'm not going to get into the regs associated with capital gains but the short answer is NO Heck I guess I will:  sec. 183; Reg. 1.183-1-Reg. 1.183-4 rev ruling 12,170, 12,171-12,176.  TOTALLY different than building an airplane for personal use and not real property, engaged the the business of or income producing property.  One time sale of a personal property airplane WILL NOT generate capital gains. 



What you just referred to is like the ol saying, I heard, from my sister, who heard from a worker, who overheard over coffee...........



I really shouldn't even be responding to this.

Dana Overall...............................CPA.........Certified Pain in the A%^ this time of year. 



Richmond, KY i39



RV-7 slider "Black Magic" 

Flying

O 360 A1A, C/S C2YR-1BF/F7666A4



http://rvflying.tripod.com/firstflight_010.jpg

http://www.youtube.com/watch?v=MMi05-WU2D0#GU5U2spHI_4

http://rvflying.tripod.com



do not archive 



[quote] Date: Fri, 4 Apr 2008 21:48:44 +0000

 From: acepilot(at)bloomer.net

 To: rv-list(at)matronics.com

 Subject: Re: Bank Reports and IRS after Aircraft Sale

 

 

 

 That's why I've heard of a lot of planes being sold for "$1 plus other 

 valuable consideration."  Even I wouldn't mind paying tax on a buck   

 (and the other valuable consideration might consist of a verbal "I won't 

 sue you if it falls apart"...)

 

 Scott

 

 

 Charlie England wrote:

 

 > 

 >

 > RE: income tax implications:

 > Aren't you legally obligated to pay either capital gains or income tax 

 > on the difference between cost & sale price if you sell for more than 

 > you paid. There's even a place on the tax return for 'hobby income'.

 >

 > Whether you choose to do the legal thing or the American thing is 

 > another question. 

 >

 > Charlie

 >

 > Dana Overall wrote:

 >

 >> Richard, there is no reporting requirement by banks to the IRS unless 

 >> it is a cash transaction of 10K or over.  Multiple cash transactions 

 >> in repetition that indicate an attempt to circumvent the 10K cash 

 >> transaction reporting requirements, will give rise to the bank 

 >> notifying the IRS.  Unless you are in the business of selling 

 >> airplanes, there are no income tax implications attached to the sale 

 >> of personal property.  No need to worry about cost, labor, whatever.

 >>

 >> Remember, you got what you paid for.  I only license to practice in KY

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rhdudley1(at)bellsouth.ne
Guest

Posted: Sat Apr 05, 2008 10:41 am Post subject: Bank Reports and IRS after Aircraft Sale

Thanks to all who offered opinions to my  questions!!!!

 Richard Dudley

 [quote]   ---

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