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

[Buzzetta]

On 12/29/2022 at 1:16 PM, rsouxlja7 said:

PPP loans were automatically deemed forgivable - there was no manual review beyond the initial approval done by the bank that facilitated it. The wealthy were given an obscene amount of money while regular people were given a few thousand dollars. See for yourself. You can input your zip code here and see all of the handouts local businesses received: https://projects.propublica.org/coronavirus/bailouts/

The company I worked for at the time had no decrease in revenue because companies still required our services. We never stopped working and were remote for maybe 3 weeks. The owners received close to $1M for free. 

I am even more infuriated than I was an hour ago.

I put in my zip code to see that a few local businesses around here that were THRIVING during the pandemic and I mean THRIVING received hundreds of thousands of dollars. 

The mom and pop drug store?  Cuomo declared that essential businesses could remain open.  The drug store qualified. The Landscaping company?  I can assure that they were up and running and operational throughout the pandemic.  The funeral home received $155,000?  The only reason that they shut down was because the owner died.  So they said that they needed assistance and got it.  

The pizza place got $340,000.  Let that sink in.  $340,000.  The pizza place was THRIVING during this.  

With everything else that goes on in this town, nothing surprises me. 

 

[fastballspecial]

On 12/26/2022 at 1:36 AM, Tnexus said:

I believe it's because Zelle acts more as a wire transfer than a payment processing center like PayPal. Yes it's basically the same thing, but the letter of the law apparently is written so Zelle can loophole around it.

Will never happen or should I say it will only happen for a limited time.  Paypal for years tried to avoid it. Any loophole they have will get closed. 

Edited December 29, 2022 by fastballspecial

[rsouxlja7]

On 12/29/2022 at 2:22 PM, Buzzetta said:

I am even more infuriated than I was an hour ago.

I put in my zip code to see that a few local businesses around here that were THRIVING during the pandemic and I mean THRIVING received hundreds of thousands of dollars. 

The mom and pop drug store?  Cuomo declared that essential businesses could remain open.  The drug store qualified. The Landscaping company?  I can assure that they were up and running and operational throughout the pandemic.  The funeral home received $155,000?  The only reason that they shut down was because the owner died.  So they said that they needed assistance and got it.  

The pizza place got $340,000.  Let that sink in.  $340,000.  The pizza place was THRIVING during this.  

With everything else that goes on in this town, nothing surprises me. 

 

Yeah it makes me sick. A family in my city owns 5ish car dealerships and between them received over $5M. It's crazy. 

[jcjames]

On 12/29/2022 at 11:16 AM, rsouxlja7 said:

PPP loans were automatically deemed forgivable - there was no manual review beyond the initial approval done by the bank that facilitated it. The wealthy were given an obscene amount of money while regular people were given a few thousand dollars. See for yourself. You can input your zip code here and see all of the handouts local businesses received: https://projects.propublica.org/coronavirus/bailouts/

The company I worked for at the time had no decrease in revenue because companies still required our services. We never stopped working and were remote for maybe 3 weeks. The owners received close to $1M for free. 

And yet people still think FedGov can operate with no regard to common sense business practices (because they not a business they the gubmint) and it will all be honky-dory as long as we make the minimum debt-payments. 

D0LTS.

 

 

[Dark Knight]

Yup a lot of the so called businesses that were "losing money" during the pandemic took advantage of the PPP loans and most were granted.

There is a website that anyone can report fraudulent use of these loans if you suspect something.  Hopefully all those who really didn't need these loans get audited. 

[batman_fan]

On 12/29/2022 at 3:55 AM, skypinkblu said:

There is a huge difference between the government sending kids out to work in slave labor and having the Government act responsibly.  I worked for NYS, I watched furniture being literally trashed (sent to storage to be piled up never to be seen again) every time we got a new Commissioner...(and that was every few years...the new ones never liked the decor) ...Desks being built for my staff...AFTER the staff were all let go because of a surprise shut down of the facility.  When I asked what on earth tye were doing, I was told they had a $500k contract to build the desks so they HAD to be built (even though no one would be there to use them ...only to have them hire another contractor to take the desks apart after they were built...Office supplies that we HAD to order because you HAD to spend the budget...being trashed before a move. Thousands of $$...they laughed at me when I suggested they at least put them on eBay...I was told you HAD to throw them out. (We didn't, I told the staff to take them home...) Toilet paper ordered to the point where they couldn't fit the stuff in the cabinets (because you HAD to spend the budget)...I could go on and on, but I didn't get enough sleep and I'm going to ramble;) 

Very little was done in any kind of efficient manner if the directions came from Albany. I can't imagine the Feds are any different....I seem to remember huge amounts paid for hammers, etc.

So many decisions were made based on what companies supported the people in charge or what party was in charge and whose list you had to hire from. No private business could possibly survive that way, just constant waste.  

I've always tried to be practical...that was never a concern in the Governor's office.

My mom worked for the government from age 18 to 62.  The main job she had while I was growing up was in a survey squadron.  At the end of every fiscal year they would be in mad scramble mode to spend their budget buying equipment they didn't need because if you didn't spend it your budget was likely to get cut the next year.

My mother-in-law worked for the Phoenix Unified School district.  They remodeled the kitchens every two years even though they didn't need to be done because they had the budget.  She would attend conferences almost every month in large US cities to hear about nutrition, etc.  There would be thousands attending from schools across the country.

[snitzer]

On 12/29/2022 at 10:37 AM, Dr. Balls said:

PPP loans have to be paid back unless deemed forgiveable. Stimmie checks, rent and utility moratoriums caused many more problems for the working class than the PPP loans.

You can’t tell property owners they can’t collect rent for two years and expect them to not collect it on the back end, or even worse: sell their properties to larger property management corporations who require a much shorter ROA on their investment than mom-and-pop landlords.

Blaming the wealthy only goes so far, the government uses them as a scapegoat to cover for their mismanagement of every aspect of the economy.

LA County just extended the moratorium AGAIN. The end goal is what you stated above (eliminate mom ‘n pop) as now the need has clearly “jumped the shark.”

Edited December 31, 2022 by snitzer

[seanlinc]

On 12/30/2022 at 11:53 PM, batman_fan said:

My mom worked for the government from age 18 to 62.  The main job she had while I was growing up was in a survey squadron.  At the end of every fiscal year they would be in mad scramble mode to spend their budget buying equipment they didn't need because if you didn't spend it your budget was likely to get cut the next year.

My mother-in-law worked for the Phoenix Unified School district.  They remodeled the kitchens every two years even though they didn't need to be done because they had the budget.  She would attend conferences almost every month in large US cities to hear about nutrition, etc.  There would be thousands attending from schools across the country.

I believe this to be the same throughout all levels of government. 20 or so years ago my ex wife worked for the state government and at the end of every fiscal year they would replace computers, printers,  desks or whatever to spend all their budget so it wouldn't be cut for the next year. Works the opposite how a business would run.

[batman_fan]

On 12/31/2022 at 6:32 AM, seanlinc said:

I believe this to be the same throughout all levels of government. 20 or so years ago my ex wife worked for the state government and at the end of every fiscal year they would replace computers, printers,  desks or whatever to spend all their budget so it wouldn't be cut for the next year. Works the opposite how a business would run.

It is insane.  My mom use to tell me stories about all the people that didn't do anything but truth be told my mom was one of the harder workers and if she worked 20hrs per week I would be shocked.  Everyone was in for 40hrs but definitely not working.  When a new civilian manager would come in and actually make people work the office would revolt and make such a mess for them they would transfer someplace else.

[october]

On 12/31/2022 at 7:32 AM, seanlinc said:

Works the opposite how a business would run.

That's not true. There's plenty of waste and forced spending wherever and whenever departmental budgets are involved because it sets up competing priorities. The department leader wants to protect their own funding by any means needed, often to the detriment of the organization's overall numbers. It's a function of size and structure, not private vs government. 

I work for a large medical center and I see the exact same stuff. 

[batman_fan]

On 12/31/2022 at 8:40 AM, october said:

That's not true. There's plenty of waste and forced spending wherever and whenever departmental budgets are involved because it sets up competing priorities. The department leader wants to protect their own funding by any means needed, often to the detriment of the organization's overall numbers. It's a function of size and structure, not private vs government. 

I work for a large medical center and I see the exact same stuff. 

I work for one of the largest semiconductor/software infrastructure companies in the world.  The CEO took a 7billion dollar company and turned it into a 230billion dollar company .  His business model is quite simple.  Buy companies with sticky products that are poorly managed and then map them into his core operating model.  This means letting go ~30% to 50% of the staff that wasn't doing anything of value, charging more for products, charging customers to cover the operating cost.  Our group went from losing money to generating ~3.5million profit per employee, that is profit.

[Mr. Zipper]

On 12/31/2022 at 10:40 AM, october said:

That's not true. There's plenty of waste and forced spending wherever and whenever departmental budgets are involved because it sets up competing priorities.

True. I work at a large global corporation. For a long time, every December, I was scrambling to spend money because it was use it, or lose it in the biz unit’s following year budget. Really stupid old schooL mentality, but that’s the way it worked. A new CEO and chief financial officer came in and we went to zero based budgeting, so the use it or lose it approach went away.

That said, I do have friends who work in the public sector, and it sounds a lot worse and more rampant there. When you have the power of taxation, it’s a bottomless wallet and people are a lot more irresponsible.

[Dr. Balls]

On 12/31/2022 at 6:15 AM, snitzer said:

LA County just extended the moratorium AGAIN. The end goal is what you stated above (eliminate mom ‘n pop) as now the need has clearly “jumped the shark.”

This is the stuff I can't get my head around - it has to end somewhere and people have to figure out how to make it work. Not trying to be insensitive to anyone in LA having to pay LA rent prices, but I just don't get the mindset of not taking any action and thinking that at some point things will magically get better because the government is involved.

[seanlinc]

Yeah I imagine this goes on as well in the private sector but not to the same degree. The companies I've worked for have been very bottom line driven thus controlling expenses is a big deal.

[Dr. Balls]

Swinging back to the topic:

I paid $800 for a book and sell it for $600 - I cannot report that as a loss, because it's not a capital loss (due to it being a "hobby')

But...

I paid $800 for a book and sell it for $1000 - I have to report that as a $200 capital gain, even though it's my "hobby".

My chimpanzee-like understanding of the English language conflicts with this IRS classification. If an item is a "capital investment" it can be sold at a loss or profit as it pertains to the law. But the new law makes it sound as if I only have two options: claim it as a business gain or a personal loss - which doesn't seem quite right, to the point that I'm surprised it's not challenged.

I feel that I am missing something here in the details.

[valiantman]

On 12/31/2022 at 10:53 AM, Dr. Balls said:

Swinging back to the topic:

I paid $800 for a book and sell it for $600 - I cannot report that as a loss, because it's not a capital loss (due to it being a "hobby')

But...

I paid $800 for a book and sell it for $1000 - I have to report that as a $200 capital gain, even though it's my "hobby".

My chimpanzee-like understanding of the English language conflicts with this IRS classification. If an item is a "capital investment" it can be sold at a loss or profit as it pertains to the law. But the new law makes it sound as if I only have two options: claim it as a business gain or a personal loss - which doesn't seem quite right, to the point that I'm surprised it's not challenged.

I feel that I am missing something here in the details.

What if you had both books that you paid $800 each, and you sold those two books for $600 and $1,000.

Your "hobby" would have $1,600 expenses and $1,600 profits.  Net is $0.

You wouldn't owe taxes, right?

[Dr. Balls]

On 12/31/2022 at 10:14 AM, valiantman said:

What if you had both books that you paid $800 each, and you sold those two books for $600 and $1,000.

Your "hobby" would have $1,600 expenses and $1,600 profits.  Net is $0.

You wouldn't owe taxes, right?

According to what I have read, you still pay taxes on the $200 profit, but you can't deduct for the loss to even them out - which would be disasterous to practically everyone. It reads as if you can't claim an expense because it's not a capital asset if it's a loss, only if it's a profit. But, that just might be me missing something.

It seems that if it does work that way, that sets a incredibly dangerous precedent at such a low priced threshold. You can't claim a loss on selling your car or boat, but those have established depreciation. Establishing depreciation on comic books, art, records, baseball cards and whatever else seems like it's opening a very scary, convoluted door. Or perhaps they are just saying that *everything* you buy as a non-business entity can only be used as a tax liability, not a deduction. And if that is the case, when does some bunny-brained politician start floating this at businesses - or worse, at small businesses? It's a slippery slope in my view.

I'm trying to get a little more educated, as this is my primary question to the accountant when we talk with them in the next few months.

Edited December 31, 2022 by Dr. Balls

[LOC Collectibles]

On 12/31/2022 at 11:17 AM, Dr. Balls said:

According to what I have read, you still pay taxes on the $200 profit, but you can't deduct for the loss to even them out - which would be disasterous to practically everyone. It reads as if you can't claim an expense because it's not a capital asset if it's a loss, only if it's a profit. But, that just might be me missing something.

It seems that if it does work that way, that sets a incredibly dangerous precedent at such a low priced threshold. You can't claim a loss on selling your car or boat, but those have established depreciation. Establishing depreciation on comic books, art, records, baseball cards and whatever else seems like it's opening a very scary, convoluted door. Or perhaps they are just saying that *everything* you buy as a non-business entity can only be used as a tax liability, not a deduction. And if that is the case, when does some bunny-brained politician start floating this at businesses - or worse, at small businesses? It's a slippery slope in my view.

I'm trying to get a little more educated, as this is my primary question to the accountant when we talk with them in the next few months.

You should definitely talk to an accountant. 

[valiantman]

On 12/31/2022 at 11:17 AM, Dr. Balls said:

According to what I have read, you still pay taxes on the $200 profit, but you can't deduct for the loss to even them out - which would be disasterous to practically everyone. It reads as if you can't claim an expense because it's not a capital asset if it's a loss, only if it's a profit. But, that just might be me missing something.

You may be overthinking it.  The IRS doesn't ask for each sale separately, they ask for "cost of goods sold" and "profit".  One number for each.

If you spend $1,600 to buy the goods and you make $1,600 in profit, the net is $0. There's no tax due.

[Dr. Balls]

On 12/31/2022 at 10:35 AM, valiantman said:

You may be overthinking it.  The IRS doesn't ask for each sale separately, they ask for "cost of goods sold" and "profit".  One number for each.

Yeah, you're probably right that I am overthinking it - and that was my initial thought - as simple bookwork for what you sell year-round works that way, but this quote from a CNBC article made me wonder about it:

"It’s possible you’ll receive Form 1099-K for transactions you don’t expect, such as reselling Taylor Swift tickets at a profit, for example, warned Justin Miller, national director of wealth planning at Evercore Wealth Management in San Francisco.

But selling items at a loss, such as used furniture, may be less clear.

“Obviously, if you sell a $2,000 couch for $1,000, there’s not taxable transaction there,” Markowitz said. “You don’t get a capital loss for it, and you don’t have a gain.”  

This is the problem area for me. Let's say I sold this couch on Ebay. I'm going to get a 1099-K regardless of whether I made a profit or loss, and it will have to be filed as such. This guy's statement makes it sound that because there's no 'taxable transaction' I can simply ignore the 1099? I highly doubt that. If I get a 1099 for $1000, I'm going to have to show to the IRS that I paid $2000 for the couch, thereby establishing a capital loss.

It might be as you said - I keep records and show my profit/loss as one aggregate number, but the statements I'm reading are opposite of that way of thinking. And perhaps it's just the media being simplistic because everyone's tax situation is different.

Edited December 31, 2022 by Dr. Balls