Refund Problem.

[Gerix]

Wouldn't the loss be considered personal?

 

[Exophase]

Really want to know what you can do with that $50 difference? Claim it on your income tax next year as an investment loss. It comes right off your income. It doesn't seem like much, but if that $50 drops your tax bracket, you save big!
And even if not, you'll at least get a couple dollars extra back.

OT now..

That isn't how tax brackets work. You get taxed at the bracket rate up to the bracket cutoff. So only the amount over the bracket gets taxed at the next bracket rate.

 

[may88]

I'm in the UK and I'm pretty sure I paid a price in USD - It killed me with the exchange rate at the time making the Pandora quite expensive.
Only wish I'd woken up to the project earlier. I stumbled on the Pandora back in October 2008 but the idea of ownership had not fully formed in my head.

Edit: Which would have meant I could have bought the box in GBP. Also I was on the dead-line day for orders and the wife was screaming for me to get of the PC and pack for a holiday. Still,I'm on board now (and holding on - tight).

 

[WizardStan]

OT now..

That isn't how tax brackets work. You get taxed at the bracket rate up to the bracket cutoff. So only the amount over the bracket gets taxed at the next bracket rate.

Continuing OT:
Your tax brackets aren't dynamic? I thought this was basically the same between US and Canada: if you made between 0 and X, multiply by 0.1; if you made between X and Y, multiply by 0.15; etc...
If you get enough deductions, you can pull your income down enough to drop a tax bracket and pay less on what's left. At least that's how our taxes work. How does your system work?

 

[gaterooze]

Your tax brackets aren't dynamic? I thought this was basically the same between US and Canada: if you made between 0 and X, multiply by 0.1; if you made between X and Y, multiply by 0.15; etc...

Unless you're basically saying the same as Exophase (it's a little unclear), then nope.

 

[quadomatic]

That isn't how tax brackets work. You get taxed at the bracket rate up to the bracket cutoff. So only the amount over the bracket gets taxed at the next bracket rate.

Correct!

So, say I make 70,000, and the tax brackets are (this is all arbitrary by the way) from $0 to $25,000 is 15%, $25,001 to $50,000 is 20%, and $50,001 to $80,000 is 23%.

My taxes would be (25,000)*.15 + (24,999)*.20 + (19999)*.23

 

[Kramy]

OT now..

That isn't how tax brackets work. You get taxed at the bracket rate up to the bracket cutoff. So only the amount over the bracket gets taxed at the next bracket rate.

Continuing OT:
Your tax brackets aren't dynamic? I thought this was basically the same between US and Canada: if you made between 0 and X, multiply by 0.1; if you made between X and Y, multiply by 0.15; etc...
If you get enough deductions, you can pull your income down enough to drop a tax bracket and pay less on what's left. At least that's how our taxes work. How does your system work?

Yeah. A friend did of mine did that - spent $500 on a laptop that dropped him a bracket, decreasing his taxes by $2800.

 

[Aninhumer]

Continuing OT:
Your tax brackets aren't dynamic? I thought this was basically the same between US and Canada: if you made between 0 and X, multiply by 0.1; if you made between X and Y, multiply by 0.15; etc...
If you get enough deductions, you can pull your income down enough to drop a tax bracket and pay less on what's left. At least that's how our taxes work. How does your system work?

Yeah. A friend did of mine did that - spent $500 on a laptop that dropped him a bracket, decreasing his taxes by $2800.

That seems like a really stupid tax system, for exactly the reason you're talking about.
How on earth is it fair that someone who earns 1 extra dollar (or whatever) could end up with significantly LESS money than someone else?

Actually, how did buying a laptop reduce their income? Unless you mean declaring it as a business investment?

EDIT: Checked the link, looks like Canada does have a perfectly normal tax system, you must be misunderstanding something.

 

[marshal]

I don't understand... why didn't you pay in USD in the first place ??

I pretty sure I paid them in USD into an UK account. (there also was an EUR account of course)

The price in USD was 330... if you would have paid in USD you would have been refunded in USD.
Also the USD price is without tax and I believe most people not in the European union paid this price.

Anyway if you paid Openpandora in a currency and they refund you the exact same amount in the same currency, I don't see what you can do about it. Yeah exchange rate fluctuation can be scary but it's not they fault.

 

[WizardStan]

EDIT: Checked the link, looks like Canada does have a perfectly normal tax system, you must be misunderstanding something.

That's quite possible. I haven't actually done my taxes in 5 years. I've got computers that do it for me.

 

[centrlink]

Wouldn't the loss be considered personal?

Correct - u can only claim a deduction where there is a nexus with income earning activities.

A loss on a Pandora would be a capital loss, and personal in nature, and therefore non-deductible.

Cheers
Simon

 

[WizardStan]

A loss on a Pandora would be a capital loss, and personal in nature, and therefore non-deductible.

That's why you claim it as a failed investment in the money markets. You didn't invest in a Pandora, you invested in GBP
(In serious, you can do this, but you probably shouldn't. The paperwork you'd need to come up with would be a headache for a measly $50)

 

[gaterooze]

That's why you claim it as a failed investment in the money markets. You didn't invest in a Pandora, you invested in GBP

You can only do that if you regularly invest in this way as a business or form of income. Just like you can't deduct gambling losses unless gambling is your business, not just a hobby.

 

[WizardStan]

You can only do that if you regularly invest in this way as a business or form of income. Just like you can't deduct gambling losses unless gambling is your business, not just a hobby.

Investment losses count as much as investment profits. If you sell a stock for more than you bought it, you have to claim that as profit. Similarly, if you sell stock for less than you bought it, you can claim a loss. If I paypal $500 worth of foreign currency to a friend as a loan who pays it back several months later but that same currency is now worth $600, I'm expected to claim that $100 as income. I don't see why you can't claim loss going the other way.

 

[gaterooze]

Disclaimer: I only know Australian tax law, so it might be different in the USA.

Investment losses count as much as investment profits. If you sell a stock for more than you bought it, you have to claim that as profit.

Not unless you were in the business of stock trading. Otherwise it is a capital gain - not the same thing as "profit", and the taxation is treated differently.

If I paypal $500 worth of foreign currency to a friend as a loan who pays it back several months later but that same currency is now worth $600, I'm expected to claim that $100 as income.

Foreign exchange has specific provisions and may be counted as either a capital gain or income, a mixture of both, or excluded entirely, depending on several factors.

Bringing it back on topic, let's look at the Pandora case. The loss from the foreign currency exchange could only be deducted against any profits you made from other foreign currency exchanges. You couldn't deduct it from regular income as a plumber, for example. The exception is if you had an ongoing business of foreign currency exchange, then you could carry that as a general tax loss and in some cases net it off against your normal income. The key element is, any deduction has to be *related* to income generation. [edit: as always, there are specific exceptions that break the rule, such as the deductions for tax preparation costs in Australia]

 

[Kramy]

EDIT: Checked the link, looks like Canada does have a perfectly normal tax system, you must be misunderstanding something.

I have no idea how it works. Something to do with tax refunds. His went way way up.

But he pays a pretty smart accountant, so who knows what they did. That was his explanation.