Tax question

Every time I go to the scrap yard, I suffer a devastating financial loss. I am forced, due to government orchestrated economic conditions, to sell quantities of extremely valuable stockpiled inventory to the closest buyer, at fire sale prices. That person then is able to realize the full value of the items I must, regrettably, liquidate.

Let me start by saying that I am not a tax expert.

I have always wondered if the sale of scrap metal could be considered a capital gain as opposed to ordinary income. Everything I have found says no. If it could be, you would probably save a considerable sum in self employment tax.

With regards to the second part of the question, you would have to read up on IRS Section 1031 Like-Kind Exchanges. My gut feeling is that this wouldn't work, but I may be wrong.

Originally Posted by t00nces2

Every time I go to the scrap yard, I suffer a devastating financial loss. I am forced, due to government orchestrated economic conditions, to sell quantities of extremely valuable stockpiled inventory to the closest buyer, at fire sale prices. That person then is able to realize the full value of the items I must, regrettably, liquidate.

I feel the same way , What we sell is extremely valuable .
I've seen my boss purchase steel for repair work on a truck , and the reality hits when a 5 foot by 18 inch plate of steel I could pick up with minimal strain is $230 .
Sure there is manufacturing cost - but heck , fire sale prices paid to me also .

Originally Posted by t00nces2

Every time I go to the scrap yard, I suffer a devastating financial loss. I am forced, due to government orchestrated economic conditions, to sell quantities of extremely valuable stockpiled inventory to the closest buyer, at fire sale prices. That person then is able to realize the full value of the items I must, regrettably, liquidate.

Sounds like me when I sell at auction .