New Tax Reporting ($600 Threshold per year) and Consignments 21 21

[telerites]

If there is a thread on the new reporting requirement, I did not see it so apologies and point me to it.

I assume consignments are not affected by the new requirement.  Not that you avoid paying taxes on profits from consignments.

And yes I know this is best addressed to a tax expert but just curious if anyone has thoughts. 

So I consign a book and and the winner pays with either PP or Venmo, the consignee is the payee and in no way is the transaction passed to the to the consignor?  The consignor wouldn't receive a 1099 if transactions over year are $600 or greater, correct?

Payment would be received from the consignee and the consignor would calculate tax impact (profit/loss) through self-reporting.

Not sure if this makes sense - I am going to be a first time consignor and have just been reading about the new requirement.

 

[telerites]

Here is the press release from Paypal to give some context.

https://newsroom.paypal-corp.com/2021-11-04-New-US-Tax-Reporting-Requirements-Your-Questions-Answered?fbclid=IwAR0V9tJOlZKyaqRkJMYaJvgAQHBCRCVDVpxnrBN75HuQx0JjdjVanHvb9w8

 

[snitzer]

You make $600 on a comic-sale transaction (goods or service), or a total of $600, you’re gonna get a 1099.

URL re-posted sans icky FB tracking - https://newsroom.paypal-corp.com/2021-11-04-New-US-Tax-Reporting-Requirements-Your-Questions-Answered

This thread could get political - fast 

[FlyingDonut]

A reminder that you are taxed on your net, not on your gross.

Edited January 2, 2022 by FlyingDonut

[fastballspecial]

On 1/2/2022 at 3:39 PM, FlyingDonut said:

A reminder that you are taxed on your net, not on your gross.

A very good point that many forget. 

[fastballspecial]

On 1/2/2022 at 3:34 PM, snitzer said:

You make $600 on a comic-sale transaction (goods or service), or a total of $600, you’re gonna get a 1099.

URL re-posted sans icky FB tracking - https://newsroom.paypal-corp.com/2021-11-04-New-US-Tax-Reporting-Requirements-Your-Questions-Answered

This thread could get political - fast 

Several surprise 1099s will be going out this year. Comic sales were massive last year mine doubled.

 

[snitzer]

On 1/2/2022 at 4:39 PM, FlyingDonut said:

A reminder that you are taxed on your net, not on your gross.

1099s don’t make this distinction…they’ll be sent regardless. Up to the individual to figure out the angles.

[telerites]

On 1/2/2022 at 3:34 PM, snitzer said:

You make $600 on a comic-sale transaction (goods or service), or a total of $600, you’re gonna get a 1099.

URL re-posted sans icky FB tracking - https://newsroom.paypal-corp.com/2021-11-04-New-US-Tax-Reporting-Requirements-Your-Questions-Answered

This thread could get political - fast 

So it is a total per year, correct?  Not per transaction.

[JollyComics]

On 1/2/2022 at 3:54 PM, telerites said:

So it is a total per year, correct?  Not per transaction.

Check with your CPA.

[telerites]

On 1/2/2022 at 4:31 PM, JollyComics said:

Check with your CPA.

I will Michael and I did put in my OP that this is best addressed by a tax expert.  The thread kind of got side-tracked from my question.  

I haven't sold books in quite some time and never consigned though my goal this year is to greatly thin out my collection.  

Probably a question I can ask the consignee when I get to that point.

In any event, the new requirement makes me think about how to disperse my books.  In hindsight, should not have thrown a thread together in such haste.

And Happy New Year.  Hope all is well.

[JollyComics]

On 1/2/2022 at 4:42 PM, telerites said:

I will Michael and I did put in my OP that this is best addressed by a tax expert.  The thread kind of got side-tracked from my question.  

I haven't sold books in quite some time and never consigned though my goal this year is to greatly thin out my collection.  

Probably a question I can ask the consignee when I get to that point.

In any event, the new requirement makes me think about how to disperse my books.  In hindsight, should not have thrown a thread together in such haste.

And Happy New Year.  Hope all is well.

PP is an automatic robot. If you made any transactions via PP, it will send the tax document. CPA will see differently. I count on CPA to avoid paying unnecessary taxes.

[WoWitHurts]

On 1/2/2022 at 3:39 PM, FlyingDonut said:

A reminder that you are taxed on your net, not on your gross.

This is true but it is up to the person filing to keep detailed records. I imagine you will file the 1099-k as misc. income with a 1099-k offset. I hate that they complicate everything. There has to be an better/easier way.

[Ryan.]

On 1/2/2022 at 2:44 PM, telerites said:

If there is a thread on the new reporting requirement, I did not see it so apologies and point me to it.

I assume consignments are not affected by the new requirement.  Not that you avoid paying taxes on profits from consignments.

And yes I know this is best addressed to a tax expert but just curious if anyone has thoughts. 

So I consign a book and and the winner pays with either PP or Venmo, the consignee is the payee and in no way is the transaction passed to the to the consignor?  The consignor wouldn't receive a 1099 if transactions over year are $600 or greater, correct?

Payment would be received from the consignee and the consignor would calculate tax impact (profit/loss) through self-reporting.

Not sure if this makes sense - I am going to be a first time consignor and have just been reading about the new requirement.

 

Depends completely on through whom you consign. I suggest asking them on an individual basis if they will be issuing 1099s. You may also receive a separate 1099 for the same transactions if you receive payment from PayPal or Venmo. 

[CAHokie]

I rarely sell but this hassle makes me want to even less. I don't keep records of what I pay for things because its for collecting purposes, not for profit. 
 

I bet the way people avoid paying taxes is going to be interesting. Selling a grail, someone is going to throw in a short box of drek to claim a loss.

[WolverineX]

On 1/2/2022 at 8:06 PM, CAHokie said:

I rarely sell but this hassle makes me want to even less. I don't keep records of what I pay for things because its for collecting purposes, not for profit. 
 

I bet the way people avoid paying taxes is going to be interesting. Selling a grail, someone is going to throw in a short box of drek to claim a loss.

 

[Robot Man]

I see a lot less internet sales starting now. Folks are going to be doing a lot more live show sales as soon as we are able to safely do so. 

[JollyComics]

On 1/2/2022 at 7:06 PM, CAHokie said:

Selling a grail, someone is going to throw in a short box of drek to claim a loss.

I did that one.

[fastballspecial]

On 1/2/2022 at 3:48 PM, snitzer said:

On 1/2/2022 at 3:39 PM, FlyingDonut said:

A reminder that you are taxed on your net, not on your gross.

1099s don’t make this distinction…they’ll be sent regardless. Up to the individual to figure out the angles.

You are splitting hairs. Donut is telling you that you pay taxes on your profit.

 

[fastballspecial]

On 1/2/2022 at 7:30 PM, Robot Man said:

I see a lot less internet sales starting now. Folks are going to be doing a lot more live show sales as soon as we are able to safely do so. 

Yes going forward that will be the case. There is panic all over FB comic book sellers groups on this. 
Wait till the 1099s actually hit it will get worse. I am proud of myself I have my sales up to date for once.
I am only a month behind usually its several months for me. Alot of sellers will be paying quarterly next year
they just haven't realized it yet.

 

[Tony S]

I do not believe anyone has answered the OP's question. 

Payment PROCESSORS are going to now be required to issue a 1099 if sales  totals $600 or more.  The old threshold was 200 transactions AND $20,000. Payment processors include PayPal, credit card processors (say Squareup) and Venmo 

Local comic shops that take consignments and  auction houses that sell comics from consigners are not "payment processors". The new standard does not REQUIRE that they send 1099's.  They may or may not.  One would have to ask if they send 1099's and if they do if there is a threshold.