Some of this is just the reporting. If I buy a thing for $92k and sell it for $100k, but the IRS only sees “You got $100k from a sale”, they’re going to assume they should tax the full $100k rather than the difference between the buy and sell price. If I’m in the 32% tax bracket, that means 32% of the $100k sale rather than the $8k profit.
But I agree, there are definitely better methods of state-administered tax accounting that wouldn’t eat up hours of my life every April.
As someone with no experience with the US tax system, that sounds just as arcane as much of it SovCit nonsense.
I don’t think the actual system being so complex helps matters much.
It sure doesn’t, but Intuit needs exponential growth so here we are.
Some of this is just the reporting. If I buy a thing for $92k and sell it for $100k, but the IRS only sees “You got $100k from a sale”, they’re going to assume they should tax the full $100k rather than the difference between the buy and sell price. If I’m in the 32% tax bracket, that means 32% of the $100k sale rather than the $8k profit.
But I agree, there are definitely better methods of state-administered tax accounting that wouldn’t eat up hours of my life every April.