Last week to avoid higher taxes 6 6

[cstojano]

On 12/29/2021 at 12:42 PM, MAR1979 said:

With the current prices of OCA my guess is first sale of the new year triggers the threshold for almost all.

 

 

 

Payment must be split evenly across (how many payment platforms are there now?) at the rate of 599 dollars.

[BLUECHIPCOLLECTIBLES]

On 12/29/2021 at 11:12 AM, cstojano said:

Don't worry, even if you saved the receipts they are made from that heat sensitive paper/ink that fades over time anyway...

Yes.  Which my accountant pointed out to me once as he argued against taking a deduction, even though it was also reflected on the credit card.  Basically, if you're selling on ebay you're safest if you presume nothing is deductible and it's "income" even if you're just getting back a fraction of the money you spent on something.  

Edited December 29, 2021 by BLUECHIPCOLLECTIBLES

[Hockeyflow33]

I'm not an accountant but as I read the tax provisions in Mass and got clarification for the Dept of Revenue at the time since it was only being reported to the State and not the IRS, there is a yard sale exception for people who aren't involved in a business. I had sold a bunch of statues that first year Mass decided to change the law in the middle of the year and had like $7k in ebay sales. After meticulously going through emails and card statements to find the original costs and postal expenses I called the state and they said it was unnecessary and so long as it wasn't income from a business, I didn't need to report it to the state. Of course, this could have changed over the last few years and if it's going federal I'm assuming they want all income to be reported.

It seems overly cumbersome and unrealistic to expect people to keep track of all deductions and costs for items they've owned for a long time 

[vodou]

On 12/29/2021 at 6:08 PM, Hockeyflow33 said:

It seems overly cumbersome and unrealistic to expect people to keep track of all deductions and costs for items they've owned for a long time 

"They" don't expect anything, except that you report and pay. Your methods of reducing the numbers is up to you, be happy the law allows you to do so!

[Dr. Love]

On 12/29/2021 at 2:43 PM, BLUECHIPCOLLECTIBLES said:

Which my accountant pointed out to me once as he argued against taking a deduction

Well that's different.

If this was 2018 on I could see that argument, as perhaps he was trying to wrap your head around the fact that the Tax Cuts and Job Act removed the ability to apply hobby deductions against hobby income.

Otherwise, if this was pre 2018, or if you are classifying your comic/collectible sales as business income, then you should seriously consider a different accountant.

[Ryan.]

On 12/29/2021 at 6:51 PM, vodou said:

"They" don't expect anything, except that you report and pay. Your methods of reducing the numbers is up to you, be happy the law allows you to do so!

Yes, there is still a fair amount of "do your best" baked into the system. 

[BLUECHIPCOLLECTIBLES]

On 12/29/2021 at 4:42 PM, Dr. Love said:

Well that's different.

If this was 2018 on I could see that argument, as perhaps he was trying to wrap your head around the fact that the Tax Cuts and Job Act removed the ability to apply hobby deductions against hobby income.

Otherwise, if this was pre 2018, or if you are classifying your comic/collectible sales as business income, then you should seriously consider a different accountant.

This was pre 2018 but it was a business expense, not a hobby thing, and he was basically saying I should presume every return will be audited and that the agent overseeing each audit will be a total hardcase who doesn't care if the cost is documented on the card because a hardcase will say you need the receipt as well.  

[Dr. Love]

On 12/29/2021 at 6:29 PM, BLUECHIPCOLLECTIBLES said:

This was pre 2018 but it was a business expense, not a hobby thing, and he was basically saying I should presume every return will be audited and that the agent overseeing each audit will be a total hardcase who doesn't care if the cost is documented on the card because a hardcase will say you need the receipt as well.  

Ah, old school, respect 

"forget about the back taxes and penalties, let's concentrate on proving it was not fraud"

[MAR1979]

This sometimes works on thermal receipts.

Set your hair dryer on medium and then blow hot air directly towards the receipt until the text becomes visible.

Never try to apply heat on the front as this will cause the whole thing to turn black. Keep the source of heat a few inches away from the BACK of the receipt and make sure to pay close attention to whether the heat is reaching the faded paper or not.

 

Edited December 30, 2021 by MAR1979

[Buzzetta]

This law is going to really cause a lot of people some unhappy surprises in 2023.

One of the secretaries had purchased tickets on Stubhub and due to a covid outbreak amongst her family could not attend.  They decided to sell them on Stubhub.  She was asking me about this because Stubhub has already sent out notices about the new tax reporting law that goes into effect tomorrow. 

Now, with fees, she probably broke even or made gas money or lost gas money.  However, the common person is not keeping track of things like the above scenario and will be surprised in 2023 if the government pursues these cases. 

I imagine that we are about to see a shift across all markets as quite a few go back to the way it was pre 2000 with checks, money orders, and cash in hand.  I have already starting to see people advertise items and only asking for cash, money order, venmo, or local pickup 

Edited December 31, 2021 by Buzzetta

[This is Who We Are]

I don’t believe such reporting requirements exist for PayPal  friends and family and with some semantic gymnastics it could be said that every one who engages in a friendly exchange is well,  a friend 

[MAR1979]

On 12/31/2021 at 4:40 PM, Buzzetta said:

I imagine that we are about to see a shift across all markets as quite a few go back to the way it was pre 2000 with checks, money orders, and cash in hand.  I have already starting to see people advertise items and only asking for cash, money order, venmo, or local pickup 

With so much art in 5 figure+ range Check and Money orders ain't helping dealers EVADE taxes.

Easy enough for any bank to determine business type earnings being deposited. Sure a few checks that add up to a couple of G's in a year will be fine, but dozens or more that add up to say 25K or 50K or 100K or more that's another story.

IMHO far too risky to forgo buyer protections and use Venmo or Paypal friends-family unless it's an in person transaction and you are sure of what you are getting. Also since as a buyer you will need a receipt if you intend on reselling not smart to do a deal in which you won't get one.

The big Tax evaders (dealers) once they stop their whining will figure out new methods to hide their income and likley probably have already.

BTW: As for me personally there is no way I'm going back to inconvenience of writing checks or hassle of obtaining money orders and frickin' snail mailing them again. Ain't happening. All who advertise Cash, MO, or Venmo Only , will not get my business and I know I'm not alone in that. The question is are their enough like me that it will make difference to a seller intending on committing a crime (Tax Evasion is how they got Big Al)

P.S. Buzzetta this post not directed at you, merely using your post as a starting reference point.

Edited January 1, 2022 by MAR1979

[Buzzetta]

On 12/31/2021 at 5:59 PM, MAR1979 said:

With so much art in 5 figure+ range Check and Money orders ain't helping dealers EVADE taxes.

Easy enough for any bank to determine business type earnings being deposited. Sure a few checks that add up to a couple of G's in a year will be fine, but dozens or more that add up to say 25K or 50K or 100K or more that's another story.

IMHO far too risky to forgo buyer protections and use Venmo or Paypal friends-family unless it's an in person transaction and you are sure of what you are getting. Also since as a buyer you will need a receipt if you intend on reselling not smart to do a deal in which you won't get one.

The big Tax evaders (dealers) once they stop their whining will figure out new methods to hide their income and likley probably have already.

BTW: As for me personally there is no way I'm going back to inconvenience of writing checks or hassle of obtaining money orders and frickin' snail mailing them again. Ain't happening. All that advertise Cash, MO, or Venmo Only , will not get my business and I know I'm not alone in that. The question is are their enough like me that it will make difference to seller intending on committing a crime (Tax Evasion is how they got Big Al)

P.S. Buzzetta this post not directed at you, merely using your post as a starting reference point.

Oh no and I didn’t take it as such and for the most part I agree with you.  I think that in the end this is going to hurt the family cleaning out a garage by putting items on eBay, the people reselling concert tickets that they cannot use and things like that.  
 

Your common citizen is unfamiliar with the aspect of maintaining let alone saving paperwork.  
 

You guys are also dealing in five and six figure pages of art.  I am not so bold and have only ventured into five figure comic books.  I agree that there are limited ways to hide those things. There are ways but limited ways.  
 

I see a lot of local meetup and dealers will thrive as they buy collections in cash effectively laundering peoples money. 
 

I would also keep a close eye and consider dumping PayPal and eBay stock by 2023.
 

 

[John E.]

Sold something on eBay today! 

Thank you, thank you all for coming, but the party is now over! 

[vodou]

On 12/31/2021 at 6:18 PM, Buzzetta said:

I think that in the end this is going to hurt the family cleaning out a garage by putting items on eBay, the people reselling concert tickets that they cannot use and things like that.  
 

Your common citizen is unfamiliar with the aspect of maintaining let alone saving paperwork.  

Hurt is relative, even with zero verifiable deductions. Gross 1,000 at your virtual yard sale (nice yard sale return imo!) and the average family owes what...$280? (28% bracket) That stinks but it's not going to ruin anybody's long-term financial plans. And almost everyone that get burned once will learn their lesson and not get burned again (save all receipts and have a plan or figure out an evasion they can live with) OR not care to put the energy in and just pay full freight every time. This is very close to that Office Space idea of skimming a fraction of a penny from every account every day. Nobody will really notice nor care. Same here.

[cstojano]

I have to say that the online articles on this are rather short on details. I know, I know - consult your tax accountant. But everything I am reading makes it seem like there is no way to deduct your cost basis for any hobby income post 2018. I assume these articles are thinking of hobbies in a very general way, and expenses are things like gas/mileage, electricity to rung your pottery wheel, etc. I am just not seeing how you justify your cost to acquire the items you have sold. 

 

I suppose if you don't get the 1099-K you can do the math in your head and report whatever is left on your Other Income line.

But if you get a 1099-K, that is the questions, how to report the cost basis of the items you sold. 

Edited January 2, 2022 by cstojano

[Buzzetta]

I am curious to see how this will impact trends in consumerism around 2023-2024.

At least in the northeast I see more of a trend of people selling off their own things rather than throwing them away or selling them to a dealer.  eBay has not been so much a source of major income for many as it has been a way of disposing unwanted items. 

I have a feeling that this will cause people to become a LOT more selective about purchases.   Maybe that is a good thing.

 

[John E.]

On 1/1/2022 at 11:11 PM, Buzzetta said:

I am curious to see how this will impact trends in consumerism around 2023-2024.

At least in the northeast I see more of a trend of people selling off their own things rather than throwing them away or selling them to a dealer.  eBay has not been so much a source of major income for many as it has been a way of disposing unwanted items. 

I have a feeling that this will cause people to become a LOT more selective about purchases.   Maybe that is a good thing.

 

Up until yesterday I was a regular seller on eBay for 8 years selling a mix of collectibles and household goods, and man, it has really affected the way I see the value of things. I don’t consume a lot because l understand the lack of resale on a lot of this stuff. Whereas in the distant past l used to justify frivolous purchase because if it didn’t pan out I could always throw it eBay. Now I look at something at the store and estimate it’s resale value and how much it costs to ship and just put it back on the shelf. Case in point are DVDs (don’t hold value) and bulky toys (not cost effective when it comes to shipping). Also men’s dress shirts (for starters they flood secondary markets like thrift stores and chic second-hand clothing stores). That’s how I justify the money I dump into OA; outside of that I don’t buy a lot of junk. It makes it that much harder for my wife to shop for me for birthdays etc because she doesn’t see me buy things. 

[John E.]

On 1/1/2022 at 6:26 PM, cstojano said:

I have to say that the online articles on this are rather short on details. I know, I know - consult your tax accountant. But everything I am reading makes it seem like there is no way to deduct your cost basis for any hobby income post 2018. I assume these articles are thinking of hobbies in a very general way, and expenses are things like gas/mileage, electricity to rung your pottery wheel, etc. I am just not seeing how you justify your cost to acquire the items you have sold. 

 

I suppose if you don't get the 1099-K you can do the math in your head and report whatever is left on your Other Income line.

But if you get a 1099-K, that is the questions, how to report the cost basis of the items you sold. 

I with you on this. I read quite a few financial articles on the 1099-k and read what the IRS has on the website. I understand it, but I don’t understand it. So even if you deduct expenses like mileage and shipping costs, does that mean you can’t take the standard deduction? How can you use the “Yard Sale” rule on an eBay 1099-k? How are you going to differentiate between the sale of a used household good (which should be excluded from taxation) and a collectible (which, if it made profit, should be taxed like a liquidated stock) made in the same 1099-K? Why can’t the money used from a sale of art be rolled over into more art so it can have a tax protection status like real estate? The only scenario l see is paying full taxes on the gross. I know people here have deducted expenses, but it sounds like a headache for the hobbyist. 

[cstojano]

On 1/2/2022 at 6:50 AM, John E. said:

I with you on this. I read quite a few financial articles on the 1099-k and read what the IRS has on the website. I understand it, but I don’t understand it. So even if you deduct expenses like mileage and shipping costs, does that mean you can’t take the standard deduction? How can you use the “Yard Sale” rule on an eBay 1099-k? How are you going to differentiate between the sale of a used household good (which should be excluded from taxation) and a collectible (which, if it made profit, should be taxed like a liquidated stock) made in the same 1099-K? Why can’t the money used from a sale of art be rolled over into more art so it can have a tax protection status like real estate? The only scenario l see is paying full taxes on the gross. I know people here have deducted expenses, but it sounds like a headache for the hobbyist. 

Glad I am not the only one. The more I read, the angrier I get here.

The other unknown is if Item A sold at a 3k loss can offset Item B sold at a 3k profit in the same tax year. I assume so, but the law changes seem brutally punitive in other respects so who knows. I do know that I need an new accountant. 

Edited January 2, 2022 by cstojano