How do I report selling scrap gold without a 1099-B or brokerage statement?

If they're doing this regularly wouldn't they also need to report this on Schedule SE for self-employment tax? Also, what if they can't remember the exact dates of purchases and sales?

Yes, if this is a regular activity done with the intent to make profit, it would be considered self-employment income and subject to Schedule SE if the net earnings are $400 or more. Good catch. For dates, estimates are acceptable when exact records aren't available. The taxpayer could use date ranges like "January-March 2024" for purchases and "April-June 2024" for sales. The IRS understands that perfect records aren't always available, especially for cash transactions, but they do expect a good-faith effort to report accurately.

Does it work with FreeTaxUSA specifically? I'm using that too and wondering if the formats are compatible. Also, do you remember if it told you to file this as a hobby or as self-employment?

I'm skeptical about using yet another service when I'm already paying for tax software. Couldn't OP just create their own document in Word or Excel? Why complicate things?

Yes, it does work with FreeTaxUSA. It creates PDF documents that you can upload wherever they're needed, so compatibility isn't an issue. The formats work with any tax software that accepts PDF attachments. It actually analyzes your specific situation to determine whether your activity qualifies as a hobby or self-employment. In my case, since I was doing it regularly and trying to make a profit, it guided me to file as self-employment on Schedule C rather than hobby income. The distinction matters because of how expenses are deducted.

How does that even work? Seems fishy that some third party can somehow get you to the front of the IRS phone line when everyone else is waiting forever.

I had a terrible experience trying to call the IRS last year. Waited over 3 hours only to get disconnected. Does this actually work or is it just another scam trying to get money from desperate taxpayers?

It's not about getting to the front of the line - they just hold your place in the queue so you don't have to stay on the phone yourself. Their system waits on hold for you and then calls your phone when a human IRS agent picks up. You're still waiting the same amount of time as everyone else, you just don't have to actively sit there listening to hold music. It's definitely not a scam. I was skeptical too, but it genuinely worked for me. I didn't have to sit by my phone for hours, and I got a call back when an actual IRS person was on the line. Saved me from the frustration of those annoying disconnections after waiting forever. With how hard it is to reach the IRS these days, it was totally worth it.

Thank you! This is exactly what I needed. Quick question - should I include the full amount before splitting with my partner, or just my portion? And do you know if I need to specify that it was scrap gold specifically?

You should only report your portion of both the costs and proceeds. If you split 50/50 with your partner, then only report 50% of what you spent and 50% of what you received. Your partner should report their share on their own taxes. Yes, it's good to specify that it was scrap gold in the description. Being specific helps if there are ever any questions. Something like "Scrap gold from estate sale jewelry" is perfect - it clearly identifies both what you sold and the source.

Is that still true for scrap gold though? I thought the collectibles tax only applied to investment-grade gold like coins or bullion, not melted down scrap?

Good question! The IRS considers all gold to be a collectible regardless of its form - whether it's coins, bullion, jewelry, or scrap. The 28% maximum rate applies to any gold held for more than one year. However, if you bought and sold the gold within the same year (which sounds like the case here), it would be taxed as short-term capital gains at ordinary income rates anyway. So the collectibles rate only matters if you held any pieces for over a year before selling.

This is really helpful advice! I wish I had thought to check my bank statements - that's a great way to reconstruct the timeline. I mostly used cash from ATM withdrawals, so those dates should help me piece together when I was actively buying. You're absolutely right about keeping better records going forward. I learned my lesson the hard way this tax season. I'm definitely going to start a simple log on my phone for any future transactions. Quick question about the hobby vs business distinction - since I only made about $1,000 profit and it wasn't really a regular schedule (just whenever I found good estate sales), would that lean more toward hobby income? I wasn't treating it like a formal business at all.

The hobby vs. business distinction depends on several factors, not just the amount you made. The IRS looks at things like: Do you operate in a businesslike manner? Do you spend considerable time on the activity? Do you depend on income from it? Do you have expertise in the area? Have you made profits in some years? In your case, since you were actively seeking out estate sales specifically looking for gold, and you had a system for selling to the coin dealer, it sounds more like a business activity even if informal. The profit amount doesn't really matter - people run small businesses that make under $1,000 all the time. If it's business income (Schedule C), you can deduct expenses like gas to drive to estate sales, but you'd also potentially owe self-employment tax if your net profit is over $400. If it's capital gains, you can't deduct those expenses, but you avoid self-employment tax. Given that you were doing this systematically rather than just occasionally selling personal items, I'd lean toward treating it as business income. But definitely consult the IRS factors or a tax professional to be sure!

That's a brilliant idea about checking EstateSales.net and Facebook for past listings! I never thought of that. Those sites usually keep archives of their sales with dates and addresses, which could really help piece together the timeline. The photo tip is gold (no pun intended) - I actually did take some pictures of pieces I thought were interesting, so I might be able to use those to help estimate values and dates. Your spreadsheet approach sounds much more organized than what I was trying to cobble together. One question - when you reported as capital gains, did you have to specify anywhere that these were collectibles subject to the 28% rate, or does the tax software handle that automatically once you describe them as gold items?

Great question about the collectibles tax rate! In my experience with FreeTaxUSA, you typically need to specify this when entering the transaction details. When you're inputting your gold sales, there's usually a field or dropdown where you can select the type of asset - make sure to choose "collectibles" rather than just "capital asset" or "investment." The software should then automatically apply the correct tax treatment. For short-term gains (held less than a year), it gets taxed as ordinary income anyway, but for long-term gains, selecting "collectibles" ensures it gets the 28% maximum rate instead of the lower capital gains rates. If you're unsure, you can always look for a "collectibles" checkbox or mention in the description that these are "gold collectibles" to be safe. The key is being clear about what you're reporting so the software applies the right tax rules. Also, totally agree about those estate sale websites being goldmines for reconstructing timelines - I was able to piece together almost my entire buying history that way!