Lawyers are ready to help during these stressful times. Schedule your consultation >
If you find a penny or Dollar while walking down the road, you obviously wouldn’t have to worry about paying taxes on your find. But what if you were to find a bag of $100 bills under the lid of a piano you bought at a garage sale? This is what’s known as an “undeniable ascension to wealth” and is a taxable event. This money is often treated as normal income, just like your paycheck. But what if you discover a lamp you bought at the same garage sale is actually a priceless antique? What cost you only $30 is now worth $3,000. In this scenario, you only need to pay taxes on the gain you realize once you sell the lamp for a profit. The reason for the difference is unlike cash, which can be freely spent, a lamp or other object, is only an object until it’s sold and your profit is realized.