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  • Taxable Postage Stamps?

    The U.S. Postal Service has proposed yet another rate increase,
    this one would raise first class postage to 42 cents in May, 2007.

    At the same time they also propose issuing a "forever stamp", which
    would also cost 42 cents. This stamp would be valid despite any further
    rate increases. (See article)

    Query: When the rate increases above 42 cents to, say 45 cents, does
    the use of a forever stamp constitute a capital gain?

    Please note that this inquiry is made in complete jest -- unless, of
    course, the answer is in the affirmative. <g>

    http://www.washingtonpost.com/wp-dyn...050301039.html


  • #2
    Taxable Postage Stamps?

    In article <[email protected]>,
    William Brenner <[email protected]> wrote:
    The U.S. Postal Service has proposed yet another rate increase,this one would raise first class postage to 42 cents in May, 2007.At the same time they also propose issuing a "forever stamp", whichwould also cost 42 cents. This stamp would be valid despite any furtherrate increases. (See article)Query: When the rate increases above 42 cents to, say 45 cents, doesthe use of a forever stamp constitute a capital gain?Please note that this inquiry is made in complete jest -- unless, ofcourse, the answer is in the affirmative. <g>http://www.washingtonpost.com/wp-dyn...050301039.html

    Cute.

    I don't see any difference between this proposal and a local
    movie theater saying ticket prices will go up but anyone who buys
    a ticket this week can use it any time in the future. Just a cost
    of doing business thing.

    However, many people are not aware that the Post Office caught up
    with some European nations who issue charity surchage stamps, for
    charities like breast cancer and firefighters. These stamps carry
    a surcharge that doesn't go towards the required postage but is
    funneled to designated charities. Deduct the surcharge.

    And deduct the surcharge paid for state license plates that
    funnel additional collected fees to state conservation agencies,
    state colleges, and other charities/gov't agencies for charitible
    donations.



    --

    __
    Art Kamlet ArtKamlet @ AOL.com Columbus OH K2PZH

    Comment


    • #3
      Taxable Postage Stamps?

      >The U.S. Postal Service has proposed yet another rate increase,
      this one would raise first class postage to 42 cents in May, 2007.At the same time they also propose issuing a "forever stamp", whichwould also cost 42 cents. This stamp would be valid despite any furtherrate increases. (See article)
      Why would one buy anything *BUT* the "forever stamp"? It costs the
      same, but if you hold one across a rate increase, you don't have
      to pay the increase.
      Query: When the rate increases above 42 cents to, say 45 cents, doesthe use of a forever stamp constitute a capital gain?
      I believe that if you *SELL* the stamp for 45 cents, it would be
      a capital gain.

      If using the stamp were a capital gain, I'd hate to think of the
      tax situation and lots of paperwork with the price of gasoline (what
      is "THE price of gasoline"?) changing multiple times while you use
      up the tank.

      There are plenty of situations where you can lock in a fixed price
      on a long-term contract, then get the advantage of a lower price
      than what anyone else could get later (e.g. apartment leases).
      These are not taxed as capital gains as far as I know.
      Please note that this inquiry is made in complete jest -- unless, ofcourse, the answer is in the affirmative. <g>http://www.washingtonpost.com/wp-dyn...050301039.html
      Gordon L. Burditt

      Comment


      • #4
        Taxable Postage Stamps?

        William Brenner wrote:

        < The U.S. Postal Service has proposed a "forever stamp" that would
        always be good for first class postage regardless of future rate
        increases>
        Query: When the rate increases above 42 cents to, say 45 cents, does the use of a forever stamp constitute a capital gain? Please note that this inquiry is made in complete jest -- unless, of course, the answer is in the affirmative. <g>
        Um, the answer IS yes. <g>

        If you bought a million of 'em at $0.42 and the value went up to $0.45,
        you would have an (unrealized) gain of thirty thousand dollars.

        Of course, you would only have to declare that gain and pay taxes on it
        if you SOLD the stamps, and then your gain would be measured by what
        you actually sold them for.

        If all you do is USE the stamps for postage, you got what you paid for
        and there is no taxable gain IMO. It's as if you bought tickets to a
        Rolling Stones concert for face value and then had the choice to either
        (a) attend the concert or (b) scalp the tickets to an eager fan for the
        going rate on Ebay, far above the face value. There is no reportable
        income if you just go to the concert. If you sell the tickets and
        make money on the sale, though, there is. If you use the stamps for
        business purposes, you would be entitled to deduct the actual purchase
        cost basis of the stamps you bought at the time you bought them (if on
        a cash accounting basis) but not their appreciated value at the time of
        actual use. Unless you really enjoy paying your accountant and tax
        attorney to jump thru these hoops, I'm assuming this is all in fun
        anyway.

        I am NOT a tax attorney and the above is NOT legal advice but just
        speculation from a fellow taxpayer.

        --
        This posting is for discussion purposes, not professional advice.
        Anything you post on this Newsgroup is public information.
        I am not your lawyer, and you are not my client in any specific legal
        matter.
        For confidential professional advice, consult your own lawyer in a
        private communication.
        Mike Jacobs
        LAW OFFICE OF W. MICHAEL JACOBS
        10440 Little Patuxent Pkwy #300
        Columbia, MD 21044
        (tel) 410-740-5685 (fax) 410-740-4300

        Comment


        • #5
          Taxable Postage Stamps?

          In article <[email protected]>,
          William Brenner <[email protected]> wrote:
          Query: When the rate increases above 42 cents to, say 45 cents, doesthe use of a forever stamp constitute a capital gain?
          I would say no; I bought a service, delivery of a first-class letter
          (at a time of my choosing), and received that service.

          Seth

          Comment


          • #6
            Taxable Postage Stamps?


            William Brenner wrote:
            The U.S. Postal Service has proposed yet another rate increase, this one would raise first class postage to 42 cents in May, 2007. At the same time they also propose issuing a "forever stamp", which would also cost 42 cents. This stamp would be valid despite any further rate increases. (See article) Query: When the rate increases above 42 cents to, say 45 cents, does the use of a forever stamp constitute a capital gain? Please note that this inquiry is made in complete jest -- unless, of course, the answer is in the affirmative. <g>


            Well, if it does, then all my supermarket coupons are taxable income.
            What a thought!

            Katie in San Diego

            Comment


            • #7
              Taxable Postage Stamps?

              William Brenner wrote:
              At the same time they also propose issuing a "forever stamp", which would also cost 42 cents. This stamp would be valid despite any further rate increases. (See article) Query: When the rate increases above 42 cents to, say 45 cents, does the use of a forever stamp constitute a capital gain?
              Not until you use it. Until then it'll be an unrealized gain. Also you
              should schedule this on your Return as a passive investment where you
              have all your investment at risk.

              Do not schedule as an active investment unless you become Postmaster
              General.

              -paul
              I had fun too

              Comment


              • #8
                Taxable Postage Stamps?

                "William Brenner" <[email protected]> wrote in message
                news:[email protected]
                The U.S. Postal Service has proposed yet another rate increase, this one would raise first class postage to 42 cents in May, 2007. At the same time they also propose issuing a "forever stamp", which would also cost 42 cents. This stamp would be valid despite any further rate increases. (See article) Query: When the rate increases above 42 cents to, say 45 cents, does the use of a forever stamp constitute a capital gain? Please note that this inquiry is made in complete jest -- unless, of course, the answer is in the affirmative. <g> http://www.washingtonpost.com/wp-dyn...050301039.html
                If you sell the stamps for more than you paid, then it would be a capital
                gain. If you use the stamps for your own personal or business purposes, then
                it is not a capital gain.


                Comment


                • #9
                  Taxable Postage Stamps?

                  William Brenner wrote:
                  The U.S. Postal Service has proposed yet another rate increase, this one would raise first class postage to 42 cents in May, 2007. At the same time they also propose issuing a "forever stamp", which would also cost 42 cents. This stamp would be valid despite any further rate increases. (See article) Query: When the rate increases above 42 cents to, say 45 cents, does the use of a forever stamp constitute a capital gain? Please note that this inquiry is made in complete jest -- unless, of course, the answer is in the affirmative. <g> http://www.washingtonpost.com/wp-dyn...050301039.html
                  does this also imply a possible futures market ??

                  Comment


                  • #10
                    Taxable Postage Stamps?

                    In article <[email protected]>,
                    William Brenner <[email protected]> wrote:
                    The U.S. Postal Service has proposed yet another rate increase,this one would raise first class postage to 42 cents in May, 2007.At the same time they also propose issuing a "forever stamp", whichwould also cost 42 cents. This stamp would be valid despite any furtherrate increases. (See article)Query: When the rate increases above 42 cents to, say 45 cents, doesthe use of a forever stamp constitute a capital gain?Please note that this inquiry is made in complete jest -- unless, ofcourse, the answer is in the affirmative. <g>
                    A) this is an accounting question, not a legal one. try asking in one of
                    the 'investment' newsgroups.

                    B) What if you *sell* the forever stamps to somebody else, at a price above
                    what you paid for them, but somewhat below the Post Office's current
                    'retail' price for postage? does _that_ incur capital gains liability?

                    C) In either scenario, which depreciation schedule do you use for the stamps?

                    D) If a letter with one of those stamps on it comes back as 'undeliverable',
                    can you claim a capital loss? If so, how much -- purchase price,
                    'depreciated' value, or replacement cost?

                    Comment


                    • #11
                      Taxable Postage Stamps?

                      In article <[email protected]>,
                      [email protected] (Gordon Burditt) wrote:
                      The U.S. Postal Service has proposed yet another rate increase,this one would raise first class postage to 42 cents in May, 2007.At the same time they also propose issuing a "forever stamp", whichwould also cost 42 cents. This stamp would be valid despite any furtherrate increases. (See article) Why would one buy anything *BUT* the "forever stamp"? It costs the same, but if you hold one across a rate increase, you don't have to pay the increase.
                      The Post Office is betting that some people will lose them or never
                      getting around to using them. That's revenue they'll receive now (and
                      can invest immediately) for services they'll never have to render.

                      --
                      Barry Margolin, [email protected]
                      Arlington, MA
                      *** PLEASE don't copy me on replies, I'll read them in the group ***

                      Comment


                      • #12
                        Taxable Postage Stamps?

                        "Robert Bonomi" <[email protected]> wrote in message
                        news:[email protected]
                        A) this is an accounting question, not a legal one. try asking in one of the 'investment' newsgroups.
                        No need. Some on this newsgroup are CPA's.

                        B) What if you *sell* the forever stamps to somebody else, at a price above what you paid for them, but somewhat below the Post Office's current 'retail' price for postage? does _that_ incur capital gains liability?
                        There would be a capital gain if they were sold above what was originally
                        paid (basis). Fair market value or what the Post Office currently charges is
                        irrelevant once they are sold. What matters is the sales price. If they are
                        not sold, there is no capital gain or loss.
                        C) In either scenario, which depreciation schedule do you use for the stamps?
                        Stamps that are purchased and not allocated or used for a specific purpose
                        are not depreciable assets.

                        Unless you buy an awful lot of them at one time, stamps are usually
                        expensed, not capitalized. The exception would be if the stamps are used
                        specifically to support the creation of a capital asset, such as a
                        construction project, and everything relating to the project is capitalized.
                        D) If a letter with one of those stamps on it comes back as 'undeliverable', can you claim a capital loss? If so, how much -- purchase price, 'depreciated' value, or replacement cost?
                        No. The cost of the postage could be expensed (to a business), but it is not
                        a capital gain or loss unless you specifically bought the stamps for
                        investment purposes and they were sold.

                        In certain cases, it could be a casualty loss (not a capital loss) to an
                        individual or business, but I don't believe that this situation
                        (undeliverable) would qualify.

                        You cannot expense an item (either currently or over time via depreciation
                        of a capital asset) AND claim a capital or casualty loss.


                        Comment


                        • #13
                          Taxable Postage Stamps?


                          Gordon Burditt wrote:
                          The U.S. Postal Service has proposed yet another rate increase,this one would raise first class postage to 42 cents in May, 2007.At the same time they also propose issuing a "forever stamp", whichwould also cost 42 cents. This stamp would be valid despite any furtherrate increases. (See article) Why would one buy anything *BUT* the "forever stamp"? It costs the same, but if you hold one across a rate increase, you don't have to pay the increase.
                          I'd assume it only works for first class letter mail ...
                          I'm still using up our own as well as other people's leftover stamps
                          from several rate increases ago to put together other postages
                          (priority, first class package, international) - that only works
                          when the value of the stamp is on the stamp as a number.
                          If you mostly mail standard letters the forever stamp may work for
                          you. If you run a small mail-order business where the smallest
                          is a non-machinable letter (OK, I know it would work for that but you
                          still ahve to have the extra stamp for the non-machinable surcharge)
                          it probably won't ...

                          Aloha,

                          Maren
                          Palms, Etc.: Tropical Plant Seeds - Hand-made Jewelry - Plants &
                          Lilikoi
                          http://www.jach.hawaii.edu/~maren/palms_etc/

                          Comment


                          • #14
                            Taxable Postage Stamps?

                            In misc.legal.moderated Gordon Burditt <[email protected]> wrote:
                            The U.S. Postal Service has proposed yet another rate increase,this one would raise first class postage to 42 cents in May, 2007.At the same time they also propose issuing a "forever stamp", whichwould also cost 42 cents. This stamp would be valid despite any furtherrate increases. (See article)
                            Why would one buy anything *BUT* the "forever stamp"? It costs the same, but if you hold one across a rate increase, you don't have to pay the increase.
                            If postage goes to $0.42 and you buy a "forever stamp" then it's good to use
                            at any time. But if postage then rises to $0.46 and you have used up your
                            "forever stamp(s)" you have to buy more at the then-current $0.46, etc. I.e.
                            you can't buy them 10 years from now at the $0.42 rate. So yes, basically
                            they'll wind up selling nothing but "for-ever stamps" and not selling
                            "regular stamps" but they won't keep selling "for-ever stamps" at a rate of
                            $0.42 'for-ever.'



                            --
                            Mike

                            -------------------------------
                            "Our enemies are innovative and resourceful, and so are we. They never stop
                            thinking about new ways to harm our country and our people, and neither do
                            we," George W. "Shrub" Bush Aug 5, 2004

                            Comment


                            • #15
                              Taxable Postage Stamps?

                              >> >The U.S. Postal Service has proposed yet another rate increase,
                              this one would raise first class postage to 42 cents in May, 2007.At the same time they also propose issuing a "forever stamp", whichwould also cost 42 cents. This stamp would be valid despite any furtherrate increases. (See article) Why would one buy anything *BUT* the "forever stamp"? It costs the same, but if you hold one across a rate increase, you don't have to pay the increase.The Post Office is betting that some people will lose them or nevergetting around to using them. That's revenue they'll receive now (andcan invest immediately) for services they'll never have to render.
                              This is true of stamps in general, not just the "forever" stamp.

                              Assuming that the "forever" stamp and ordinary stamps cost the same
                              for first class postage, why buy an ordinary stamp? If I buy a
                              roll of 100 stamps with intent to use them within the next month,
                              why not get free insurance that postal rates won't go up during
                              that time? There's no down side.

                              The "forever" stamp delays how quickly the Post Office can make a
                              rate increase "take". Rumors of a pending rate increase will set
                              off speculative buying of cheaper "forever" stamps while they're
                              still available. Even if the rate increase is a complete surprise
                              to the public, how long will the public's inventory of stamps last?
                              For a month or so most of the stamps used will be those bought at
                              the lower rate.

                              Gordon L. Burditt

                              Comment

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