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Post by soundintheround on Dec 7, 2022 22:40:20 GMT -6
Been buying/selling/(and alot of fixing) gear for the past 15+ years for my home studio.
At this point probably have close to ~$100k of stuff, conservatively.
This past year I sold $12.2k of gear on reverb. (can almost guarantee all of it for a profit maybe 25% on average, hence I usually repair/fix-up/recondition most stuff I buy)
I've spent close to the same amount ($10k) purchasing crap this year (not the same stuff that I sold).
95% of my studio is vintage gear/(and alot of rare synths) made in USA, Europe, Japan prior to ~1982.
Very little new stuff really.
I currently don't really have much of the gear insured, which is a bit crazy. But its not a buisness for me just an intense hobby. If I lost it all, my family wouldn't suffer and we wouldn't lose our mortgage.
Anyways, is anyone else in a similar-ish situation?.....
Usually I wouldn't care but any tips for this upcoming 2022 Tax Season, and 1099?
Should I be forming an LLC in the next couple weeks and starting myself a 'business', to both get a tax break and insure all this stuff properly?
Tbh I do consider wanting to start a boutique recoridng studio business 'one day' , but to date it has just been for personal/friends use.
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Post by soundintheround on Dec 7, 2022 23:18:12 GMT -6
Follow up question.....
If I sold $12.2k of gear this year (stuff I purchased within past 5 years, some of it broken and through various means) for say an average 25% profit.
Assumption is that I pay income taxes on all $12.2k of it (roughly $3-4k), unless I can show original receipts of how much I bought it for?
Or how is this supposed to work in the 'new normal'?
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Post by thehightenor on Dec 8, 2022 4:10:23 GMT -6
SITR, it has taken me 25 years of hard work, saving and hundreds of hours research to build up my project studio!
Defacto 5 star, all risk, new for old studio insurance is the number one most important purchase I make on the 1st of January each year.
I highly suggest you do the same!!!!
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Post by Vincent R. on Dec 8, 2022 6:01:26 GMT -6
I have about half the amount of gear you have. I know, cause it’s all insured. Lol. I use Music Pro Insurance. It’s not cheap, but not ridiculously expensive either. www.musicproinsurance.comAs for the gear, you can probably do everything under a DBA. When you file taxes it’s a balance of what you sold, fees you spent (Reverb, eBay, PayPal, shipping costs, etc). Then you tally up what you’ve invested in, new gear, etc. Your accountant will weigh those things against each other. So you won’t pay taxes on the full 12.2k. You just need to find an accountant who understand your business. As a professional performer, I can write off most gear purchases, fees on things I’ve purchase, or booking fees for performances, etc. With the new regulations I’m making sure to keep track of things I’ve sold too, so it doesn’t bite me. Luckily, I also usually sell things to buy other things, but not as the same level as you. |
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Post by indiehouse on Dec 8, 2022 6:06:41 GMT -6
I have about half the amount of gear you have. I know, cause it’s all insured. Lol. I use Music Pro Insurance. It’s not cheap, but not ridiculously expensive either. www.musicproinsurance.comAs for the gear, you can probably do everything under a DBA. When you file taxes it’s a balance of what you sold, fees you spent (Reverb, eBay, PayPal, shipping costs, etc). Then you tally up what you’ve invested in, new gear, etc. Your accountant will weigh those things against each other. So you won’t pay taxes on the full 12.2k. You just need to find an accountant who understand your business. As a professional performer, I can write off most gear purchases, fees on things I’ve purchase, or booking fees for performances, etc. With the new regulations I’m making sure to keep track of things I’ve sold too, so it doesn’t bite me. Luckily, I also usually sell things to buy other things, but not as the same level as you. How would one create a DBA without actually “doing business”? I’ve sold a lot of stuff this year, and I’m getting nervous for taxes. I thought the tax liability would just be on profit made? Is that per piece, or overall? What if I sold a piece at a loss? |
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Post by mattbroiler on Dec 8, 2022 7:04:41 GMT -6
You do not have to create a separate business entity with a DBA or LLC to file schedule C you can do it as an individual
If you are buying and selling stuff and making/losing money that is considered a business no dba or llc is needed
You declare a profit or a loss using schedule C - cost of goods sold is what you paid for it vs the sale price
you can deduct any legit expenses on schedule C as well
so yes keep all receipts to verify your deductions in case of audit and you will be okay
One is supposed to file a separate schedule C for each distinct business you operate if you are making money at more than one type of business. I am in this situation myself having sold a bit of gear this year and have to figure out how best to do it this time around
agree that it's good to consult a competent tax person / accountant if you are not sure about how to handle the tax reporting aspect. Once you know how it should be done you can subsequently do your own returns using TurboTax or similar rather than paying an accountant for tax return preparation (the ones I have dealt with charged too much IMO)
I have been using TurboTax for a few years but plan to try the HR Block software this year. Something about TurboTax bugs me I feel like they may be missing some deductions but I have no way of knowing if that's really the case.
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Post by spindrift on Dec 8, 2022 7:05:34 GMT -6
For vintage stuff, I would get a crystal clear picture of what would be covered and how. My understanding with MusicPro Insurance (which I used for many years) is that if my M49s are stolen, they would replace them with M149s (or now M49V)….current equivalents…not actual vintage value. That alone is a non-starter for me anymore.
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Post by Tbone81 on Dec 8, 2022 8:54:38 GMT -6
You don’t really have to start a business, you can file taxes as a sole proprietor. Keep your receipts, you pay taxes on gross adjusted income (profits), not gross income.
If your total gross as around 12k, but only 25% was profit, and you deduct $10K in new purchases your tax liability should be zero
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ericn
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Post by ericn on Dec 8, 2022 10:33:20 GMT -6
If you don’t go the specialized gear insurance route you need a specific rider for your home / renters policy if you own over $10k in any of the specific area defined in your policy. You need pictures records of purchase etc. Don’t let an agent just sell you on upping the value of the policy read the fine print!
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Post by lpedrum on Dec 8, 2022 17:13:41 GMT -6
For vintage stuff, I would get a crystal clear picture of what would be covered and how. My understanding with MusicPro Insurance (which I used for many years) is that if my M49s are stolen, they would replace them with M149s (or now M49V)….current equivalents…not actual vintage value. That alone is a non-starter for me anymore. I have MusicPro too, and that's news to me. On older gear I list the replacement value of the actual gear, not a new counterpart. I'm paying an insurance premium based on that replacement value. As an example I have a Spizzichino cymbal that is no longer made, so the only replacement is a used Spizzichino. Same with my old Wurly, Gibson, EV mics etc etc. Did MusicPro actually state this to you? If so, I'll have to look into that. Back to the OP, I strongly recommend getting insurance. Shop around because different companies cover different things. I don't have studio insurance even though I have a studio. I have MusicPro because it covers all of my gear no matter where it is--in the studio, at home, my brother's basement, in the car, etc etc. I'm also a touring drummer so it gives me peace of mind when on the road too. |
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ericn
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Post by ericn on Dec 8, 2022 17:37:57 GMT -6
For vintage stuff, I would get a crystal clear picture of what would be covered and how. My understanding with MusicPro Insurance (which I used for many years) is that if my M49s are stolen, they would replace them with M149s (or now M49V)….current equivalents…not actual vintage value. That alone is a non-starter for me anymore. I have MusicPro too, and that's news to me. On older gear I list the replacement value of the actual gear, not a new counterpart. I'm paying an insurance premium based on that replacement value. As an example I have a Spizzichino cymbal that is no longer made, so the only replacement is a used Spizzichino. Same with my old Wurly, Gibson, EV mics etc etc. Did MusicPro actually state this to you? If so, I'll have to look into that. Back to the OP, I strongly recommend getting insurance. Shop around because different companies cover different things. I don't have studio insurance even though I have a studio. I have MusicPro because it covers all of my gear no matter where it is--in the studio, at home, my brother's basement, in the car, etc etc. I'm also a touring drummer so it gives me peace of mind when on the road too. First rule of insurance what you list means nothing, it’s what they say they will pay. Assume nothing read the policy, if you don’t understand it find someone who doesn’t work for them that understands insurance. Where did I learn this? Besides growing up in a town that was wher worker comp originated and having insurance execs around me, dealing with one of the nation’s largest insurance companies claims people as a client and having a couple of million in personal claims, one of my closest cousins is the former VP of a very large insurance companies. Oh yeah I’m geeky enough that I have read my policies. |
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Post by soundintheround on Dec 8, 2022 18:57:03 GMT -6
You don’t really have to start a business, you can file taxes as a sole proprietor. Keep your receipts, you pay taxes on gross adjusted income (profits), not gross income. If your total gross as around 12k, but only 25% was profit, and you deduct $10K in new purchases your tax liability should be zero Ok. I like the sound of that. Pretty much each year i come out fairly even, (im never making net money overall, just fixing and swapping stuff out) Does it get messy if i try to file my taxes as a sole proprietor, in addition my regular job (as well as filling jointly with my wife)? |
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Post by soundintheround on Dec 8, 2022 19:00:34 GMT -6
For vintage stuff, I would get a crystal clear picture of what would be covered and how. My understanding with MusicPro Insurance (which I used for many years) is that if my M49s are stolen, they would replace them with M149s (or now M49V)….current equivalents…not actual vintage value. That alone is a non-starter for me anymore. Yeh basically 95% of my studio has no suitable replacement from sweetwater.com It’d be a challenge and take alot of time to even replace it all. Id assume whatever insurance id go with, in the case of a tragic event I want to get a check for what the stuff is worth on the used market at the time of the loss. (Which seems complicated) |
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Post by spindrift on Dec 8, 2022 21:26:07 GMT -6
lpedrum What Eric said. Call or better yet email them and put the question directly to them. Ask them to describe the EXACT scenario you fear. There is no way they would authorize a payment for the true value of my vintage 49s and accessories (pushing $35-40K). They will find an example of some frankenstein mic that sold for $3000 in Germany to justify a smaller payout or just replace it with current equivalent gear. I remember having this conversation the last time my renewal was due and realizing I was grossly overpaying for a false sense of security. Now, relatively inexpensive bank safe deposit boxes are my friend when I’m not tracking lots.
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Post by lpedrum on Dec 9, 2022 13:45:05 GMT -6
lpedrum What Eric said. Call or better yet email them and put the question directly to them. Ask them to describe the EXACT scenario you fear. There is no way they would authorize a payment for the true value of my vintage 49s and accessories (pushing $35-40K). They will find an example of some frankenstein mic that sold for $3000 in Germany to justify a smaller payout or just replace it with current equivalent gear. I remember having this conversation the last time my renewal was due and realizing I was grossly overpaying for a false sense of security. Now, relatively inexpensive bank safe deposit boxes are my friend when I’m not tracking lots. Thanks much for the suggestion--I'll research this after the holidays. I thought, maybe incorrectly, that if I listed the replacement value I would get a replacement of equal value. Are you saying that when you had MusicPro you listed a vintage 49 on the ledger for a replacement value of 35K, paid the required premium for that amount, and then were told MusicPro would find a much cheaper alternative replacement? |
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Post by Deleted on Dec 9, 2022 13:52:22 GMT -6
For vintage stuff, I would get a crystal clear picture of what would be covered and how. My understanding with MusicPro Insurance (which I used for many years) is that if my M49s are stolen, they would replace them with M149s (or now M49V)….current equivalents…not actual vintage value. That alone is a non-starter for me anymore. Agreed. that and reliability is a good reason not to pay top dollar for vintage mics and equipment. There is often no contemporary equivalent that can replace it so you might as well get something else in the first place. |
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Post by Deleted on Dec 9, 2022 14:01:37 GMT -6
For vintage stuff, I would get a crystal clear picture of what would be covered and how. My understanding with MusicPro Insurance (which I used for many years) is that if my M49s are stolen, they would replace them with M149s (or now M49V)….current equivalents…not actual vintage value. That alone is a non-starter for me anymore. Yeh basically 95% of my studio has no suitable replacement from sweetwater.com It’d be a challenge and take alot of time to even replace it all. Id assume whatever insurance id go with, in the case of a tragic event I want to get a check for what the stuff is worth on the used market at the time of the loss. (Which seems complicated) You’re just screwed then. If the product has changed, you’re left with something that doesn’t serve the same role, eg Neumanns or API, or a steaming hunk of shit if the company has sold out, eg Focusrite Harman SSL. Your. British made Focusrite or super analogue circuits getting replaced by unrepairable Chinese pcb bullshit that will die in a few years. Your dbx 160 vu getting replaced by a 166 ugh like I know someone with a crane song spider. It cost 8k but has more than 8k in utility. You need maybe 6k for the good pres new, 8 channels of good conversion, a mixer, and 8 channels of cool distortion. It will be more like 9k for just the pres and conversion |
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Post by spindrift on Dec 10, 2022 16:31:24 GMT -6
For vintage stuff, I would get a crystal clear picture of what would be covered and how. My understanding with MusicPro Insurance (which I used for many years) is that if my M49s are stolen, they would replace them with M149s (or now M49V)….current equivalents…not actual vintage value. That alone is a non-starter for me anymore. Agreed. that and reliability is a good reason not to pay top dollar for vintage mics and equipment. There is often no contemporary equivalent that can replace it so you might as well get something else in the first place. Unless you greatly prefer how vintage gear sounds and performs and have the means to keep them running in top shape. |
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Post by EmRR on Dec 11, 2022 16:35:09 GMT -6
it would SEEM if you have replacement value insurance, and the rate you pay is based on that value....then there's the part where they declare your items 'collectibles', which probably aren't covered. Lloyd's? THE USPS pulls the same valuation shit, after they've sold you insurance based on a declared value. If it's in the rate scheme, they should be obligated to pay, since you paid, but.....
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Post by thehightenor on Dec 11, 2022 17:40:05 GMT -6
My gear is insured by value.
If I have a loss be it one item or total I get a cheque.
Also, and this is critical in my humble opinion.
Never buy your insurance direct from an insurance company.
Buy it through a large established insurance broker, pay a little bit more if needs be.
If a broker sells you a product they are bound by law (at least in my part of the world) that the product you have bought from them must be fit for purpose
and do exactly as it says on the tin - if it fails the liability falls to them!
It's an extra layer of protection.
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Post by mythundreamt on Dec 12, 2022 13:04:06 GMT -6
Anybody use Heritage (musician.com)? They seem to be the recommended insurer for vintage music gear, including Bursts and even priceless classical instruments like Stradivari.
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