Hi there,
I'm very new to this forum, so please let me know if I'm unwittingly breaking any rules by posting this.
I recently moved into an apartment with enough space to build my first HO scale layout. As soon as I realized that I could build a layout, I began a buying spree on eBay of any HO scale train that caught my eye, and, as I think you can imagine, ended up with way more trains that I could fit on my modest layout. I'm now faced with the prospect of selling many of these "surplus" trains at a major loss, and with cash not really growing on trees for me, I'm trying to determine if I can do anything tax-wise to help cushion my losses.
So here's the question: have any of you considered declaring your model trains as capital assets? If so, we would have to claim any gains made by selling them at a profit as capital gains, but we would also get to declare any losses as capital losses, which are able to be deducted from any taxes owed. I think that there is a plausible argument to be made that many model trains (now of course, there is some element of subjectivity here, and a lot depends on the brand and quality of the model) can be considered collector's items, which means that they could technically be considered as capital assets according to the following definition of a capital asset, according to Investopedia:
"Capital assets are significant pieces of property such as homes, cars, investment properties, stocks, bonds, and even collectibles or art."
Please let me know if any of you have experience with this issue. I think it could really help a lot of us modelers, given the sometimes overwhelming financial commitment that comes with this wonderful hobby.
Thanks in advance for your help!
S
I'm very new to this forum, so please let me know if I'm unwittingly breaking any rules by posting this.
I recently moved into an apartment with enough space to build my first HO scale layout. As soon as I realized that I could build a layout, I began a buying spree on eBay of any HO scale train that caught my eye, and, as I think you can imagine, ended up with way more trains that I could fit on my modest layout. I'm now faced with the prospect of selling many of these "surplus" trains at a major loss, and with cash not really growing on trees for me, I'm trying to determine if I can do anything tax-wise to help cushion my losses.
So here's the question: have any of you considered declaring your model trains as capital assets? If so, we would have to claim any gains made by selling them at a profit as capital gains, but we would also get to declare any losses as capital losses, which are able to be deducted from any taxes owed. I think that there is a plausible argument to be made that many model trains (now of course, there is some element of subjectivity here, and a lot depends on the brand and quality of the model) can be considered collector's items, which means that they could technically be considered as capital assets according to the following definition of a capital asset, according to Investopedia:
"Capital assets are significant pieces of property such as homes, cars, investment properties, stocks, bonds, and even collectibles or art."
Please let me know if any of you have experience with this issue. I think it could really help a lot of us modelers, given the sometimes overwhelming financial commitment that comes with this wonderful hobby.
Thanks in advance for your help!
S