When selling household items, cars...taxes? structuring?

[Fermion]

My wife is bugging the tar out of me worrying about taxes and structuring. Evidently she read some article about a guy who made several deposits under $10,000 and had his accounts seized by the IRS for structuring. I am telling her she is somewhat crazy, but figured I would come here and see what you guys think.

So we are selling stuff in preparation for selling our house, mostly on craigslist. Pool table we paid $3000 and sell for $1000 cash, deposit in the bank. Car we sell for $11,000 and deposit the money in the bank, then another car for $14,000 and deposit the money. Group of items for $4,000 and deposit the money. In almost every case, except possibly when we sell the pinball machines, we paid more for the items originally than we are selling them for.

Do you need to file a form with the IRS so they don't accuse you of structuring if you are making a few deposits under $10,000 but over $1,000?

Do you need to file a form if you sell a couple of cars for over $10,000 each?

 

[Texas Proud]

Seems like you are depositing money that you get at the time... a couple over the $10K mark... I do not see any structuring going on..


There has been scare stories... the ones that I have read were businesses that were making a whole lot more deposits than you....


I would not recommend doing what my sister did... split up a deposit and told the teller she knew about the $10K reporting.... I told her do not be stupid and admit to a crime...


Edit to add... you do not have to put the sales on your tax return since you cannot take a personal loss.... however, the gain should be...

 

[Rick_Head]

If it scares you, just keep the cash and use it for normal expenses. It's not like you are losing interest. Of course, if it's a check you can't do that. Instead, you could keep a record of such transactions.

 

[Symbiotic]

No way. Not even close, even if all of those transactions were in cash. (You weren't clear on that, and it matters, because almost all of the "structuring" issues are actually currency structuring issues.)

The banks file electronic forms every time you deposit or withdraw 10k at a time from an account. They fill out a zillion of these forms every day, and apparently no one pays them a whit of attention unless they're doing some kind of investigation of someone.

The bank employees can file another kind of form if they think you're playing games -- depositing, say, $9k every day to try to avoid having them fill out the boring zillions-of-forms-every-day forms above. When they fill one of those out, someone might take a look at what you're up to.

So, to be clear:

1. If you're transacting in non-cash, this whole thing is moot.
2. If you're transacting cash >10k, you're not capable of currency structuring, because every transaction is being reported.
3. If you're transacting cash on both sides of 10k, you're fine. You really have to be super sketchy with multiple borderline transactions to trigger a special report.

As for your questions,

Do you need to file a form with the IRS so they don't accuse you of structuring if you are making a few deposits under $10,000 but over $1,000?

There's no such form. You can't pre-signal to the IRS that you're about to do something that looks sketchy but that's not really sketchy.

Do you need to file a form if you sell a couple of cars for over $10,000 each?

Same answer.

Separate from currency structuring, though, if you ever get audited, someone might ask you to account for those large deposits. You might do well to keep records of your sales so you can account for the money. I think you'd really have to be in hot water in some other way to get to this point, though.

 

[ChicagoGal]

So, to be clear:

1. If you're transacting in non-cash, this whole thing is moot.
2. If you're transacting cash >10k, you're not capable of currency structuring, because every transaction is being reported.
3. If you're transacting cash on both sides of 10k, you're fine. You really have to be super sketchy with multiple borderline transactions to trigger a special report.

+1

CTR (Currency Transaction Reports) must be filed by the bank when you deposit more than $10K in cash. "Structuring" is simply making multiple smaller cash deposits (at a single or multiple institutions) to intentionally keep each deposit under $10K and avoid having the bank fill out the form. If a bank suspects you are doing that, they must fill out a SAR (Suspicious Activity Report) which could prompt FinCEN to investigate.

So continue to do what you're doing, and you should be fine. I would keep records of all of the transactions in case any questions do arise, though. Especially if you think you will have a gain on the sale of the pinball machines, which could trigger capital gains tax. That would no doubt be offset by the losses you are taking on the other items, so having all of the records would be helpful.

 

[Senator]

It doesn't matter how much cash you deposit, it if it looks like structuring your account will be flagged. Deposit cash a few times that is out of a 'normal' pattern, you could get a call from the bank, Or a SAR (Suspicious Activity Report) filed and turned into the IRS/FinCEN/FBI.

If a teller asks you where you got the money you are depositing and you say 'none of your business', expect your bank account will be closed.

Over $10K, you have to fill out a CTR report. If the deposits (or withdrawals) total $10K in a short time period (a month?), you will likely be on a structuring report that is looked at closer. A money order is counted as cash.

Even businesses that make daily deposits of 100% of their cash, get their accounts closed at times if it looks like structuring.

Whatever revenue you bring to the bank is not worth the bank paying a potential penalty for allowing money launderers. They rather close the account and be safe than take a chance.


A few notes

1. If you're transacting in non-cash, this whole thing is moot.

A money order is considered cash.

2. If you're transacting cash >10k, you're not capable of currency structuring, because every transaction is being reported.

If you are doing something out of your bank profile, they may suspect you are running a business from a personal account. Even though the transaction is reported.

3. If you're transacting cash on both sides of 10k, you're fine. You really have to be super sketchy with multiple borderline transactions to trigger a special report.

If the total is > $10K, even if you go on both sides, you are not fine. It is still structuring if it is intentional. You may have to prove it was not intentional.