right there with you Chris. i don't want to deal with more1099's. the bottom line is the IRS is trying to close loopholes in their current structure. i look at them trying to prove what the NOLA jazz print was worth when i inherited it from my mother 12 months before. it sure isn't a pure net gain.
Well, I think the basis step rules apply, so your basis would be the fair market value when you inherited it. But you may still have to deal with a notice from the IRS. And they don't have to prove anything; you have to prove your basis.
This is the most pernicious part of reporting these amounts. The IRS will likely assume they are income, when in many cases they are not. Congress has enacted a really bad law here.
The casual parts sale problem is much more difficult. I bought bumper parts in two different transactions, put nicer parts on my car and sold the parts I took off.
Obviously, I was offsetting the costs of the upgrade, but only the sale piece of this was reported to the IRS. And these rules were retroactive, so I had no opportunity to create the records I would need if audited. And, of course, the IRS frowns on records created after the fact and solely for tax reasons. So they have created a situation where I am (and thousands of other innocent people are) likely to get screwed.
I can handle this, but there will be lots and lots of perfectly innocent people who will be mortfied to be scrutinized by the IRS, and a portion of those will end up paying the (extortionate) tax just to make the IRS go away.
