If I Sell Something for $1,300 to Pawn Stars, Will I Get IRS paperwork?

If I sell something for over $1,300 dollars to Pawn Stars, will I get an IRS form?

We believe you're confusing pawn shops with slot machines.

If you hit a jackpot of $1,200 or more in a casino, you receive a W-2G, an IRS form pertaining to Certain Gambling Winnings.

At a pawn shop, you're not hitting any jackpots and you're not really even selling anything. Pawnshops offer collateral-based loans, which means the loan is secured by something of value. When you want a pawn-shop loan, you bring in something you own and if the pawnbroker is interested, he offers you a loan, then hangs onto his collateral until you repay the loan and retrieve the item.

Loans aren't taxable income, because they're temporary. You pay them back, often with interest, so you're not any richer for borrowing the money. (Loans only become taxable if you don't pay the lender back or the IRS decides that your loan was a tax scam.) Since the initial pawnshop transaction is a loan, no tax paperwork is issued.

And if you don't reclaim your item, the pawnbroker keeps it and the whole transaction has turned into a sale. At a pawnshop, the loan amount will be less, and sometimes much much less, than the item is worth, so it's unlikely you'd ever make money on it and have to declare that as income.

Besides, the whole transaction takes place in cash. And you're probably long gone, so even if the pawnbroker were required to hand you an IRS form, which he isn't, he couldn't anyway.

If I sell something for over $1,300 dollars to Pawn Stars, will I get an IRS form?

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Randall Ward Oct-21-2019

pawn shops

a few days ago I would have called this silly but last week ha a discussion with a few friends that had no idea how pawnshops work, so this is needed. Just glad I never had to pawn anything in Vegas!

Jackie Oct-21-2019

Pawnshops

In most places pawnshops are good for emergencies but in Vegas they are a pawnshop owners dream come true.  Many first timers to Vegas get the gambling fever and "just know" that their last buck gambled would get all of their money back and a way back home.  Oops, it is called gambling and the house doesn't lose.  But the pawnshops win as they offer less than half of what your home town pawnshop would for your items as they know you are desperate for money and their "loan" contract exacts much more interest than your home town pawnshop would.  Vegas pawnshops know they've got you by the short hairs and will never repay their "loan".  They get richer, you get broker!!!

[email protected] Oct-21-2019

Pawn shops will buy things outright

Not all transactions in pawn shops are loans. Most of the transactions on "Pawn Stars" are sales, not loans. There is the potential for a capital gain or loss on the transaction. My guess is that these these sales transactions are not reported to the IRS, but the price paid does establish the basis for the item when it is resold. 

For the seller, they should report the gain or loss on Schedule D or Form 8949, Disposition of Capital Assets.

Ray Oct-21-2019

agree with Joanne

As Joanne has stated, the Pawn Stars buy, sell AND pawn. And I think the IRS might be interested in people that appear on TV and "sell" an item, especially when Rick asks how they got the item and finds out that there is a significant profit that the seller makes on it. Unfortunately, the question seems to rely on the fallacy "If there is no tax form, it isn't taxable".

Sandra Ritter Oct-21-2019

Capital gain or loss??

If you're selling a personal item (jewelry, phone, bike of any sort, etc) there's no way you can claim a capital loss on that, and I doubt you'll get more than you paid for it so it would be rare that you'd have a capital gain. So if gain, have to claim the gain; if loss, sorry, can't claim personal losses.

Question of the Day - 21 October 2019

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