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

[Stronguy]

On 5/12/2022 at 10:16 AM, zuckuss2003 said:

I certainly wouldn't ignore it, I am saying you don't owe if you took a loss.

The problem is, how do you prove you took a loss?  Did you save the receipt from an item you purchased 20 years before?  I certainly didn't.  But if you get audited, they could definitely require it.

[Broke as a Joke]

So every comic book transaction needs a receipt now?  Will hand written receipts be acceptable?  

No wonder everyone seems to be asking for check or money order now.

[CAHokie]

This is too rich…. Is there really a person in this thread lecturing others about paying taxes that once justified claiming his animal was a “support animal” to get a discount/exception on rent/HOA? 

[CAHokie]

On 5/12/2022 at 6:39 AM, Shrevvy said:

It is not about paying taxes. It is about forcing people to pay taxes that they do not owe. In the eBay email, they make reference to a bike purchased for $1500 and sold for $800. No tax is due (can't even take a write-off for the loss), but a 1099 will now be issued. Prove your innocence. You miss this point over and over.

The government used to trust its citizens. What happened to this country? 

This is the point many have tried to make that are not running a business. I truly do not remember what I paid for a comic 5 years ago unless it was significant. If I sell it now, I will be guessing what I owe even though I do want to do the right thing. 
 

Convenient they want the taxes on everything you resell (couch, comics, t-shirts) but you cant sell at a loss and put that as a total loss. I know…I know, we should check with our accountant. 

$600 is just too low. I think the 10K figure is fair because the occasional seller is unlikely to hit that amount, at least for regular people.

[ADAMANTIUM]

It's getting locked in here, so remove all your posts. 

It's getting hot in here so take off all of those 😂

[lizards2]

On 5/12/2022 at 7:26 AM, Ryan. said:

On 5/12/2022 at 5:34 AM, zuckuss2003 said:

This is so weird...why would you say the government doesn't trust its citizens. So you get this 1099, and you yourself know you did not make money on that sale. You know what you do...you don't pay taxes on that sale...there is no "proving your innocence" needed. What do you mean by that?

When you ignore that 1099 you received because you know you don't owe taxes on the stated amount, the IRS helpfully sends you a bill 2-3 years later for the full taxable amount* of the applicable 1099, thus necessitating you to prove your innocence.

 

*Plus interest!

Edited 2 hours ago by Ryan.

And then, they usually follow up 6-8 months later with a fine in the amount of about 1/2 the amount you owed and have already paid.

[Ryan.]

On 5/12/2022 at 12:29 PM, lizards2 said:

And then, they usually follow up 6-8 months later with a fine in the amount of about 1/2 the amount you owed and have already paid.

[F For Fake]

On 5/12/2022 at 10:26 AM, Ryan. said:

When you ignore that 1099 you received because you know you don't owe taxes on the stated amount, the IRS helpfully sends you a bill 2-3 years later for the full taxable amount* of the applicable 1099, thus necessitating you to prove your innocence.

 

*Plus interest!

This is very much true. Many years ago, I was just a "hobbyist", and truly, sincerely, 100% ignorant about paying taxes on eBay sales. It never occurred to me because I'd never thought of it as a job. I bought stuff, I sold stuff so I could buy other stuff. Anyway, at some point, I blew past the $20k threshold without realizing it. About four years later I got a notice from the IRS, and had to pay back taxes on two years worth of sales. It was a wake-up call, to be certain. A painful one. But, I cleared my obligation, and since then have kept good records of everything I buy and sell, and any other expenses I have related to the hobby. I pay my share. It is an absolute kick in the BALLS to pay 15% in fees to eBay, then another 22% in income tax, plus self-employment tax, county taxes, etc. Really, truly, it blows. But as long as it's my legal obligation to do so, I will do it, and I will count every penny to make sure I don't pay any more than I absolutely have to.

SO that's on me. I blew past $20k years ago, learned my lesson, and now am "legit". That's the price I pay for the hobby I've chosen.

But the difference in $600 and $20k is ABSURD, and while I pay my (decidedly un)fair share, I totally empathize with the folks who are going to get that wake up call next year and beyond. It blows. Get your ducks in a row, the IRS is coming.

[snitzer]

I’m seeing more and more cash only and trade deals happening in PUBLIC…keep the pressure up hobbyists  

[F For Fake]

On 5/12/2022 at 3:25 PM, snitzer said:

I’m seeing more and more cash only and trade deals happening in PUBLIC…keep the pressure up hobbyists  

Definitely saw more cash happening at the only big show I went to. Most dealers became card friendly in the last several years, but this year I heard a lot of buyers being told "Sorry, cash only."

[snitzer]

On 5/12/2022 at 3:28 PM, F For Fake said:

Definitely saw more cash happening at the only big show I went to. Most dealers became card friendly in the last several years, but this year I heard a lot of buyers being told "Sorry, cash only."

I love the trade + cash approach. It’s such an awesome way to obtain a bigger book that might usually be out of reach. Also, raw books move fast, which is another added bonus (bypass the slabbing hassle). 

[shadroch]

On 5/12/2022 at 8:22 AM, Stronguy said:

The problem is, how do you prove you took a loss?  Did you save the receipt from an item you purchased 20 years before?  I certainly didn't.  But if you get audited, they could definitely require it.

What is the item?  If it is a collectible it is easy enough to establish what was the going value twenty years ago.

  Do you really think the IRS is going to go to the wall over people not having reciepts for items like this?  Unless you are being audited for criminal activity, the auditor doesn't want to be doing this anymore than you do. they are more concerned with closing the audits than squeezing the last nickel out of a citizen.  Now, if you are living way above your lifestlye, driving a fancy car and living in a McMansion while reporting 10K in income, you might get a deeper look . 

[Stronguy]

On 5/12/2022 at 2:46 PM, shadroch said:

What is the item?  If it is a collectible it is easy enough to establish what was the going value twenty years ago.

  Do you really think the IRS is going to go to the wall over people not having reciepts for items like this?  Unless you are being audited for criminal activity, the auditor doesn't want to be doing this anymore than you do. they are more concerned with closing the audits than squeezing the last nickel out of a citizen.  Now, if you are living way above your lifestlye, driving a fancy car and living in a McMansion while reporting 10K in income, you might get a deeper look . 

"Going Value" is not acceptable for an audit.  You either have the proof or not.  It's up to the auditor's discretion but, it has been my experience that varies greatly.   If you claim a value on your taxes (income from the 1099-K with offsetting line items for the purchase) you are on the hook for substantiating your claim.  For the most part, I suspect the IRS will just disallow the offsetting line item and you'll be on the hook for the full tax bill... plus penalties and interest.  I do, however, agree that the odds of being audited solely for the 1099 is low.  It's just a huge burden to those filers who don't have the process in place.

[Number 6]

On 5/12/2022 at 12:46 PM, shadroch said:

What is the item?  If it is a collectible it is easy enough to establish what was the going value twenty years ago.

  Do you really think the IRS is going to go to the wall over people not having reciepts for items like this?  Unless you are being audited for criminal activity, the auditor doesn't want to be doing this anymore than you do. they are more concerned with closing the audits than squeezing the last nickel out of a citizen.  Now, if you are living way above your lifestlye, driving a fancy car and living in a McMansion while reporting 10K in income, you might get a deeper look . 

Wait a minute. 
 

Up until now you’ve been arguing that the issue is the lack of patriotism on part of the American tax payer and the danger that Uncle Sam might not get his “fair share”. 
 

Now you’re arguing “well, you probably won’t get caught…”

 

?

[shadroch]

On 5/12/2022 at 1:04 PM, Number 6 said:

Wait a minute. 
 

Up until now you’ve been arguing that the issue is the lack of patriotism on part of the American tax payer and the danger that Uncle Sam might not get his “fair share”. 
 

Now you’re arguing “well, you probably won’t get caught…”

 

?

That's what you got out of that?  I find it ironic that people are spending more time complaining about the extra paperwork than they will filling out the paperwork.

[Number 6]

On 5/12/2022 at 1:39 PM, shadroch said:

That's what you got out of that?  I find it ironic that people are spending more time complaining about the extra paperwork than they will filling out the paperwork.

What I get out of it is that if you’re seriously suggesting that people can guesstimate what the average purchase price was the year they bought the item and that an auditor is going to accept that as an offset to their sale price of the item is that 1) it’s a good thing you’ve got “a guy” doing your taxes for you and 2) I’m not at all surprised that you’ve been pinged by the IRS for “irregularities” in the past. 
 

What I find ironic is the guy who want’s to impugn the motives of everyone who’s not happy with this as a lazy tax cheat is at same time advocating some fairly questionable stuff.  
 

Why is that someone being willing to do the paperwork and pay their “fair share” and not being happy with this new threshold is mutually exclusive?

[shadroch]

On 5/12/2022 at 2:54 PM, Number 6 said:

What I get out of it is that if you’re seriously suggesting that people can guesstimate what the average purchase price was the year they bought the item and that an auditor is going to accept that as an offset to their sale price of the item is that 1) it’s a good thing you’ve got “a guy” doing your taxes for you and 2) I’m not at all surprised that you’ve been pinged by the IRS for “irregularities” in the past. 
 

What I find ironic is the guy who want’s to impugn the motives of everyone who’s not happy with this as a lazy tax cheat is at same time advocating some fairly questionable stuff.  
 

Why is that someone being willing to do the paperwork and pay their “fair share” and not being happy with this new threshold is mutually exclusive?

 Grouse all you want. It isn't going to change anything and for most of us the new reporting won't either.  I learned a long time ago that I had an uninvited partner named Uncle Sam and learned to plan for it.  Without him, I'd charge less but my net would be the same.  Only we'd be having this conversation in German or Russian.

[Number 6]

On 5/12/2022 at 3:34 PM, shadroch said:

 Grouse all you want. It isn't going to change anything and for most of us the new reporting won't either.  I learned a long time ago that I had an uninvited partner named Uncle Sam and learned to plan for it.  Without him, I'd charge less but my net would be the same.  Only we'd be having this conversation in German or Russian.

….and now we’re back to the “principled” flag-waving,   

Whatever, slick willie. Say “hi” to Vinnie the Tax Guy for me. 

[shadroch]

Perhaps you are the one who could benefit from such a conversation but that is a personal choice.

[Beastfeast]

It's a reasonable enough stance to suggest people pay their fair share of taxes based on their profits.  What's NOT reasonable is changing that threshold from 20k to 600 in a single year. 

I also have 1,099 reasons to assume why @shadroch sells through MCS so much 

Edited May 13, 2022 by Beastfeast