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

[seanlinc]

Good news

[electricprune]

Threshold also increases to $5000.

[Hamlet]

On 11/21/2023 at 4:40 PM, electricprune said:

Threshold also increases to $5000.

That seems like a sensible number to me.

[Dark Knight]

And here I am hoping the threshold would be...

 

[BigDaddy1]

On 11/21/2023 at 10:14 PM, Hamlet said:

That seems like a sensible number to me.

Agreed. 
 

definitely will be selling more books with this change next year, and glad it’s not so low. $5000 I think everyone can work with for the most part.

[toro]

Doesn't affect me, I am in Massachusetts where it already is $600. 

[Dick Pontoon]

I feel your pain, brother.

[ADAMANTIUM]

On 11/21/2023 at 2:18 PM, CHASEnBLUE said:

Delayed again!

https://www.foxbusiness.com/money/irs-delays-tax-reporting-rule-venmo-paypal-payments-600

When it says "beginning 2024 threshold rises to $5000 (a more sensible #)" then that $5000 will be for 2025 reporting?

If so an answer to prayer, "YES!" Cause it isn't perfect but just about....

 

[CHASEnBLUE]

This got me to thinking how, if in any way, this will affect reporting on ebay. They stopped allowing sellers to use PP as a platform for depositing final sales amounts. 

*Edited* - I found my answer shortly after initially posting this, so it looks like it applies across the board for the most part platform wise.

IRS 1099-K Tax Reporting: What You Need To Know for 2023 | Kiplinger

Does anyone know if the threshold amount is gross, or net (after fees)?

Edited November 26, 2023 by CHASEnBLUE

[ADAMANTIUM]

On 11/26/2023 at 5:47 PM, CHASEnBLUE said:

This got me to thinking how, if in any way, this will affect reporting on ebay. They stopped allowing sellers to use PP as a platform for depositing final sales amounts. 

*Edited* - I found my answer shortly after initially posting this, so it looks like it applies across the board for the most part platform wise.

IRS 1099-K Tax Reporting: What You Need To Know for 2023 | Kiplinger

Does anyone know if the threshold amount is gross, or net (after fees)?

AFAIK 

PayPal reporting and ebay, (basically all platforms separately venmo and etc) no matter if twice reported in one transaction ie ebay via PayPal, was to send the form if over $600+ even in one transaction.

If you sold goods and services via PayPal over $600 and did the same but separately on ebay with your bank, both would send you their own separate forms. Even if it was only ebay and the transaction was $600 no matter the amount of transactions, get a tax form from ebay but not paypal.

Yall said it was postponed this year, does that mean no forms unless both 200 transactions and over $20,000?

Or was the limit just changed to $5,000 rather than $600?

I've sold separately under $600 both ebay and PayPal, but the amount on PayPal was separate from ebay both separately individual transactions.... ahem if they had anything to do with each other they'd be over $600, but they're not, cause use my bank for ebay.

I shouldn't get a form. All were pretty much losses so to speak anyway, just avoiding the hassle of declaring a loss or showing receipts etc.

Next year I hope it is the same as regulation for the $600, but with the limit being $5,000 instead, and that was my understanding of what yall said. Guess I have to wait and see!

Edited November 27, 2023 by ADAMANTIUM

[CHASEnBLUE]

Either 200 transactions or over 20K.

[icp004]

Question about determining the purchase cost of comics whose later sales are reflected in on a 1099-k from eBay.  Say a 10 comic lot is purchased for $1000.  Is it acceptable to assign a flat $100 purchase expense to each comic in that lot or is the seller obligated to prorate the cost of each book based on market value when some books in the lot have more value that others?  

[jimjum12]

On 3/10/2024 at 7:18 PM, icp004 said:

Question about determining the purchase cost of comics whose later sales are reflected in on a 1099-k from eBay.  Say a 10 comic lot is purchased for $1000.  Is it acceptable to assign a flat $100 purchase expense to each comic in that lot or is the seller obligated to prorate the cost of each book based on market value when some books in the lot have more value that others?  

The main issue is that the assigned value of each book remains consistent until all books are sold. At the end of the year you should have compiled an itemized list with the cost of goods for each item in your inventory. The total of all of those will be needed to balance your records, and to arrive at how much tax you might owe. The formula is composed of 3 parts, your annual sales, your annual acquisitions, and the cost of what remains in inventory at year's end. You just can't call it 100 at the beginning and 300 later. It has to remain constant. The books in a lot will only have to equal the total price of the lot. At least, that's how it is here. Best to keep records on a regular basis. If you wait and do it monthly, details can become confused. Having the data in more than one place is also wise.GOD BLESS ...

-jimbo(a friend of jesus)

 

... getting software like Quick Books isn't a bad idea.

Edited March 10 by jimjum12

[Robot Man]

All this just sounds like way too much work. And unprofitable. A reason why I’ve pretty much given up selling on EBay. I tell people, I’m an expert at buying and selling junk but I am no accountant. Nor do I want to be or pay someone to do it even further lowering any profit I might make. Strictly a hobby that used to be a lot more fun…

[Sigur Ros]

On 3/11/2024 at 11:21 AM, Robot Man said:

All this just sounds like way too much work. And unprofitable. A reason why I’ve pretty much given up selling on EBay. I tell people, I’m an expert at buying and selling junk but I am no accountant. Nor do I want to be or pay someone to do it even further lowering any profit I might make. Strictly a hobby that used to be a lot more fun…

The government ruins literally everything.

[Mr. Zipper]

On 3/11/2024 at 11:21 AM, Robot Man said:

All this just sounds like way too much work. And unprofitable. A reason why I’ve pretty much given up selling on eBay. I tell people, I’m an expert at buying and selling junk but I am no accountant. Nor do I want to be or pay someone to do it even further lowering any profit I might make. Strictly a hobby that used to be a lot more fun…

This. It's a ridiculous administrative headache for most collectors. As a collector who has bought comics and other collectibles for 40+ years and rarely sold, I don't have paperwork for 95% of what I've bought. I assume most collectors are the same. For big purchases in the past 20 years, I kept a spreadsheet. That's it.  

When it comes time to sell, I have no idea how I will be able to establish cost basis that would meet with the approval of the IRS. With any luck this 1099-K nonsense will be killed or kicked down the road indefinitely.

That, or a find a dealer/collector who will pay cash when the times comes. 

 

[ageofsilver]

I feel your pain, RM and Mr. Zipper. As for me, most everything I own has a cost basis of cover price…

[skypinkblu]

I think most people here are hobbyists and don't deduct expenses. It's more simple if you are not taking deductions. Of course it also might cost you more money...but it used to be that unless you declared a profit every few years, you were determined to be a hobbyist anyway.

Not sure if that applies to everything, I know it applied to owning 10% of a very slow racehorse many years ago;)

Edited March 12 by skypinkblu

[the blob]

On 3/12/2024 at 12:16 AM, skypinkblu said:

I think most people here are hobbyists and don't deduct expenses. It's more simple if you are not taking deductions. Of course it also might cost you more money...but it used to be that unless you declared a profit every few years, you were determined to be a hobbyist anyway.

Not sure if that applies to everything, I know it applied to owning 10% of a very slow racehorse many years ago;)

Seems nuts to pay $500 for a book, sell it for $500 and be expected to pay taxes on that. There was no profit.

 

Edited March 12 by the blob

[ttfitz]

On 3/12/2024 at 4:12 PM, the blob said:

On 3/12/2024 at 12:16 AM, skypinkblu said:

I think most people here are hobbyists and don't deduct expenses. It's more simple if you are not taking deductions. Of course it also might cost you more money...but it used to be that unless you declared a profit every few years, you were determined to be a hobbyist anyway.

Not sure if that applies to everything, I know it applied to owning 10% of a very slow racehorse many years ago;)

Seems nuts to pay $500 for a book, sell it for $500 and be expected to pay taxes on that. There was no profit.

That's right, there's no profit, so there is no tax. I think when Sharon says "expenses" she isn't talking about the cost of the book, but other things like storage, office space, etc. If you aren't a business, you can't deduct those things - and if you have a loss on one item, it can't offset a profit on another.

But other direct costs of the item, yeah, those aren't taxable income. From the IRS website (https://www.irs.gov/businesses/what-to-do-with-form-1099-k):

Gross payment amount (Box 1a)

The gross payment amount shows the total value of payments you received through payment card and third party network transactions.

The gross payment amount isn't adjusted for any:

• Fees
• Credits
• Refunds
• Shipping
• Cash equivalents
• Discounts

These items are not taxable income. You can deduct them from the gross amount. Check your records.