Are you kidding me? Another stupid question about eBay? 1 1

[Math Teacher]

I know that we discussed this before, but I couldn't find the exact thread.

 

I have been reading up on selling things through Ebay. I found this information from PayPal.

 

Under the IRC Section 6050W, PayPal is required to report to the IRS the total payment volume received by US account holders whose payments exceed both of these levels in a calendar year:
 

• US$20,000 in gross payment volume from sales of goods or services in a single year
• 200 separate payments for goods or services in the same year

IRC Section 6050W applies to all payment processors, including PayPal. Our goal is to help PayPal sellers understand and comply with the requirements.

 

I counted 41 General Payments (payments I made to another seller) and 136 eBay Auction Payments (payments that a buyer paid to me), for a total of 177 transactions. So, according to the above section in bold, PayPal will not issue a Form 1099-K to the IRS.

 

And here is information from eBay.

 

If you’re a managed payments seller who has more than 200 transactions and generates more than $20,000 in sales in a calendar year, you’ll receive a Form 1099-K from eBay. This information will also be reported to the IRS and your state tax authority, where applicable.

 

According to eBay, I have had 155 sales for a grand total of $6,999.70. I also have made 27 purchases on eBay this year, for a grand total of 182 transactions. So, based on the above section in bold, I will not get a Form 1099-K from eBay, because I am nowhere close to $20,000 in sales and I have less than than 200 transactions. I am currently in the process of cancelling all my current listings on eBay. I do NOT want to receive a Form 1099-K.

 

Am I correct in regard to my conclusion about PayPal and my conclusion about eBay? If you want to just send me a link to the thread, I would be fine with that. You are also welcome to express your opinion in this thread.

 

Thank you for your time and consideration.

[vheflin]

 

[Dr. Love]

Purchases don't count.  Just sales.

[Math Teacher]

I'm not trying to be deliberately obtuse, but I just want to make sure that I understand things correctly.

PayPal: The only way that I will receive a Form 1099-K from PayPal is if I have more than $20,000 in gross payments AND more than 200 separate payments for goods and services.

eBay: The only way that I will receive a Form 1099-K from eBay is if I have more than 200 sales AND more than $20,000 in sales.

So, both of these situations are a definite AND and not an OR. Is this the correct conclusion?

Edited September 7, 2020 by Joe Ankenbauer

[Tempus Fugit]

Forming an LLC and going "legit" is the smartest move we ever made. 

- Examples of deductions: mileage, cell phone, computer, internet, grading fees, office supplies, packing materials and boxes, bags and boards, commissions and charge fees, etc, etc.

- Do not have to pay sales tax on items bought for resale.

 

[Dr. Love]

2 hours ago, Joe Ankenbauer said:

I'm not trying to be deliberately obtuse, but I just want to make sure that I understand things correctly.

PayPal: The only way that I will receive a Form 1099-K from PayPal is if I have more than $20,000 in gross payments AND more than 200 separate payments for goods and services.

eBay: The only way that I will receive a Form 1099-K from eBay is if I have more than 200 sales AND more than $20,000 in sales.

So, both of these situations are a definite AND and not an OR. Is this the correct conclusion?

yes that is the correct conclusion

and of course "payments" means payment to you, not from you

and of course of course everyone knows you are obligated to report all income regardless as to whether it meets the threshold to receive the 1099K

[Math Teacher]

13 minutes ago, Tempus Fugit said:

Forming an LLC and going "legit" is the smartest move we ever made. 

- Examples of deductions: mileage, cell phone, computer, internet, grading fees, office supplies, packing materials and boxes, bags and boards, commissions and charge fees, etc, etc.

- Do not have to pay sales tax on items bought for resale.

 

Understood, but I don't think that applies to me. At most, I have 150 more items to sell. If I just wait until 2021, I can (with hope) sell everything in 2021. I am not trying to make a living out of selling comics, TPBs, and other types of collected editions.

I just want to get rid of things that I know that I will NEVER read again. Once I read Essential Hulk #1, I don't have the time (or desire) to read it again. I have too many other books, comics, TPBs, etc. to read.

For example, I'm a HUGE Stephen King fan. I have every book that he has written (at least to my knowledge) in hardcover. I can count on one hand the number of times I have re-read any of his books. I have re-read "The Stand", which was when the unabridged version came out. I have re-read "IT", because I wanted to familiarize myself with the story before the "IT" movies came out. I re-read "The Shining", because that was the first Stephen King book I ever read.

I am also a big fan of Tom Clancy, Michael Chrichton, and John Grisham, but I can't foresee reading any of their books again. Wait, I take that back. I did re-read "Jurassic Park", but that's it.

I want to pare down my collection to a more manageable size. So, I no longer need to have 300+ collected editions taking up shelf space. My goal is to get rid of two bookcases and extra desk, which will make the room feel more open. And I would rather my books go to another comic book fan who actually reads them, rather than donating them to the library, where I often see books I have donated during the monthly library sale. And, I wanted to get some extra cash to buy things that I wanted, like Giant-Size X-Men #1, by selling books that I am never going to open again.

@Tempus Fugit, I do really appreciate your advice, but I don't think it will work in my situation. Thank you for replying.

[Dr. Love]

what am I Joe chopped liver 

[Math Teacher]

@Dr. Love, you are most certainly not. Since I was replying to Tempus Fugit, I forgot the advice that you had given me. No hard feelings, I hope.

[Math Teacher]

I know this is slightly off-topic, but it's my thread and I can cry if I want to....

I understand the need for taxes. Paying taxes is what makes living in a civilized society possible. I am sure there are plenty of people who think taxes are too high. I do know one person that thinks taxes are not high enough - Warren Buffett, the Oracle of Omaha. There was an article in the Omaha World several years back where Warren Buffett said he was ashamed that he had paid less in income tax than his secretary.

Anyhoo, I honestly think that some of the requirements of the IRS for selling collectibles are VERY unreasonable. When I bought Batman Archives #1 in 1989, it never even crossed my mind to hold onto the receipt. At that time, I had no intention of selling it, so saving the receipt never even crossed my mind. Honestly, how many people keep receipts for 30 years, especially for such a trivial purchase? As a second example, I have a copy of Fantastic Four #1. Even if you held a gun to my head, I could not tell you how much I paid for it nor who I bought it from. Not only would I not have the receipt, but even if I did, I don't know which receipt I should be looking for.

Currently, I have evidence of all my big-ticket purchases, as I have paid for them using PayPal. But what if I purchased an expensive book from a board member? Sure, I could ask for a receipt, but the chances of the IRS accepting that receipt would be low. I can just imagine the comment, "For all we know, you just wrote that receipt two days ago."

To me, there has to be some type of happy medium. Yes, I understand that the IRS wants to make sure you pay all your taxes due. But that has to be a better solution than having the IRS say, "Well, you don't have a receipt for this comic, so we will say its cost basis is 12¢." Let's say I wanted to sell my copy of Metal Men #1, which I purchased for less than $2 in the mid-sixties. Can ANYONE imagine an eight-year-old child saying to himself, "Hmmm. I way want to sell this comic at some point in time, so I better hold onto this receipt."? And don't even get me started on the difference between the tax rate from selling a collectible compared to the capital gains tax rate.

Well, as a public service, I can tell you that my rant is officially over. Thanks to everyone who gave me advice in this thread.

[shadroch]

I've never had the IRS ask for a receipt. 

My only comment on taxes is that the IRS regulations are full of loopholes best left to professionals. Don't wander thru a swamp at midnite on a moonless night without a proper guide.

[theCapraAegagrus]

On 9/6/2020 at 11:10 PM, Dr. Love said:

Purchases don't count.  Just sales.

[Math Teacher]

Well, I've decided how I am going to proceed on this issue.

I started a spreadsheet with the following columns: Date, Book(s), Cover Price, Purchased Price, Sale Price, and Profit/Loss. If it wasn't for MyComicShop, I wouldn't have been able to proceed. Fortunately, for just about every title I needed, they had an entry, and one piece of information was the cover price. To calculate the Purchased Price column, I multiplied each entry in the Cover Price column by 75%; I figured that was a low enough figure. To calculate the Profit/Loss column, I subtracted each item in the Sale Price column from the corresponding item in the Purchased Price column. This afternoon, I worked back from today to the middle of July. As of that date, I am showing a loss of $584.80.

My daughter works for PayPal, and she assured me that I would not get a Form 1099-K unless I had over $20,000 in sales and over 200 transactions. There is no way I am going to reach $20,000 in sales, so I feel confident that I won't get a Form 1099-K from either PayPal or eBay. And now, I won't worry about declaring my proceeds from all my sales, as I am currently showing a net loss. I didn't even include my eBay fees or my Pirate Ship fees, which, at this time, are over $1,100. I don't want to try to get money back from a loss on my sales, as that is the type of thing that gets the IRS's attention. And if I don't get a Form 1099-K, the IRS won't be aware of my sales.

One last question - does 75% sound too low for a discount? During this time of my life, I was buying my comics through mail order, and I remember the discount being more like 15% - 20%.

I feel much more at ease now than when I made my original post. But, again, thanks for everyone that provided advice. I hope I can return the favor at some point in time.

Edited September 8, 2020 by Joe Ankenbauer