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

[FlyingDonut]

On 1/10/2022 at 5:24 PM, jcjames said:

And so it begins...

Just got a Ransom Message from Feebay: 

 

My heart bleeds. I've been doing this for 18 months. Pay your taxes.

[FlyingDonut]

On 1/9/2022 at 5:17 PM, batman_fan said:

Me too.  My wife uses Venmo all the time to pay her sister for stuff her sister buys for her.  Well over $600 total.  Now they will go back to using checks.

There are specific exemptions for this in both Venmo and Paypal's ToS. That would, of course, go against the meme, so you be you. 

[jcjames]

On 1/14/2022 at 1:06 PM, FlyingDonut said:

My heart bleeds. I've been doing this for 18 months. Pay your taxes.

[non sequitur]

This is a pretty useful thread! I bought a golden age key years ago and just saw one in the same grade sold in November for 10x my cost, so while I thought I’d never sell, now I wonder (and hence my search in this board for “Capital gains” which led me here). 

Since the 2007 stock crash, I’ve had a carry-forward capital loss of about $70k. If I ever had a gain, it would be offset by that loss. I didn’t have that gain until I sold my home last year, so when I do my taxes in the next 2 months, the gain from the house will eat up all of that loss, and I’ll still have a Capital gain for 2021. 

So if I sell the comic in 2022, then at least that gain won’t also be added to the 2021 gain, but would it matter? Does a gain push you into a higher tax bracket, and higher AGI, or is it separate? I think it’s separate.

If I sell in 2022, the collectible gain applies (28%?) I’d thought about gifting it to kids to sell, but that seems to have 2 disadvantages: they can’t subtract the initial cost I paid, and it’s still taxed at 28% - the fact that they have no income and are in the lowest tax bracket may have no benefit if the collectibles tax rate is unaffected by your tax bracket  

what if I decide not to sell, and it goes to my kids when I’m dead? Would it then be a burden to them? (they may fight over what to do with it, and/or timing of a sale, and when they finally do sell, it would be taxed at 28% of 100% of the sale price, since they have no cost basis)?

Finally: does who you use to sell have any pros/cons? Is a private sale preferable to a HA auction? If expenses aren’t deductible (can’t be subtracted from your gross to lessen the net), then wouldn’t it be better to use an auction house that charges the premium to the buyer (and not a broker who charges me as the seller)?

[ygogolak]

On 1/9/2022 at 5:17 PM, batman_fan said:

Me too.  My wife uses Venmo all the time to pay her sister for stuff her sister buys for her.  Well over $600 total.  Now they will go back to using checks.

Pretty sure you still have to cash the check at the bank.

[WolverineX]

On 1/24/2022 at 11:41 AM, non sequitur said:

This is a pretty useful thread! I bought a golden age key years ago and just saw one in the same grade sold in November for 10x my cost, so while I thought I’d never sell, now I wonder (and hence my search in this board for “Capital gains” which led me here). 

Since the 2007 stock crash, I’ve had a carry-forward capital loss of about $70k. If I ever had a gain, it would be offset by that loss. I didn’t have that gain until I sold my home last year, so when I do my taxes in the next 2 months, the gain from the house will eat up all of that loss, and I’ll still have a Capital gain for 2021. 

So if I sell the comic in 2022, then at least that gain won’t also be added to the 2021 gain, but would it matter? Does a gain push you into a higher tax bracket, and higher AGI, or is it separate? I think it’s separate.

If I sell in 2022, the collectible gain applies (28%?) I’d thought about gifting it to kids to sell, but that seems to have 2 disadvantages: they can’t subtract the initial cost I paid, and it’s still taxed at 28% - the fact that they have no income and are in the lowest tax bracket may have no benefit if the collectibles tax rate is unaffected by your tax bracket  

what if I decide not to sell, and it goes to my kids when I’m dead? Would it then be a burden to them? (they may fight over what to do with it, and/or timing of a sale, and when they finally do sell, it would be taxed at 28% of 100% of the sale price, since they have no cost basis)?

Finally: does who you use to sell have any pros/cons? Is a private sale preferable to a HA auction? If expenses aren’t deductible (can’t be subtracted from your gross to lessen the net), then wouldn’t it be better to use an auction house that charges the premium to the buyer (and not a broker who charges me as the seller)?

@Math Teacher  had a good post about taxes and inheritance. 

[Mr. Zipper]

So to be clear... the $600 threshold goes into effect for Tax Year 2022?

EDIT: Ugh... it appears it is in effect now. I just checked my personal Paypal and there is a 2021 1099-K for the small amount of transactions I had  (~$1,200).  

So stupid. How do I get a cost basis for a bunch of low value collectibles I bought years ago?

Edited January 25, 2022 by Mr. Zipper

[F For Fake]

Tangentially related to this thread, has anyone received their 1099k from eBay for 2021? When I go into Payments it says my 1099 is ready, but when I go to the taxes tab, it's not in there. I have it set to online AND mail, so I guess I'll get it one way or another, but I'd kinda like to get all of this stuff turned in and taken care of.

[rsouxlja7]

On 1/25/2022 at 8:22 AM, Mr. Zipper said:

So to be clear... the $600 threshold goes into effect for Tax Year 2022?

EDIT: Ugh... it appears it is in effect now. I just checked my personal Paypal and there is a 2021 1099-K for the small amount of transactions I had  (~$1,200).  

So stupid. How do I get a cost basis for a bunch of low value collectibles I bought years ago?

Your best guess is probably going to be fine. Of course if you put no effort into it and just put cost basis as $1200 based on just wanting to not have to pay taxes you might have a problem. If you sold 1 book for $1200 and you think you bought it for $1000 then that's reasonable. If you sold 1200 books for $1 each that you think you paid $1 each for then that is also reasonable. 

Edited January 25, 2022 by rsouxlja7

[Larryw7]

On 1/25/2022 at 9:22 AM, Mr. Zipper said:

So to be clear... the $600 threshold goes into effect for Tax Year 2022?

EDIT: Ugh... it appears it is in effect now. I just checked my personal Paypal and there is a 2021 1099-K for the small amount of transactions I had  (~$1,200).  

So stupid. How do I get a cost basis for a bunch of low value collectibles I bought years ago?

I just checked, I don't see anything like this in my Paypal account.

[rjpb]

On 1/24/2022 at 8:41 AM, non sequitur said:

This is a pretty useful thread! I bought a golden age key years ago and just saw one in the same grade sold in November for 10x my cost, so while I thought I’d never sell, now I wonder (and hence my search in this board for “Capital gains” which led me here). 

Since the 2007 stock crash, I’ve had a carry-forward capital loss of about $70k. If I ever had a gain, it would be offset by that loss. I didn’t have that gain until I sold my home last year, so when I do my taxes in the next 2 months, the gain from the house will eat up all of that loss, and I’ll still have a Capital gain for 2021. 

So if I sell the comic in 2022, then at least that gain won’t also be added to the 2021 gain, but would it matter? Does a gain push you into a higher tax bracket, and higher AGI, or is it separate? I think it’s separate.

If I sell in 2022, the collectible gain applies (28%?) I’d thought about gifting it to kids to sell, but that seems to have 2 disadvantages: they can’t subtract the initial cost I paid, and it’s still taxed at 28% - the fact that they have no income and are in the lowest tax bracket may have no benefit if the collectibles tax rate is unaffected by your tax bracket  

what if I decide not to sell, and it goes to my kids when I’m dead? Would it then be a burden to them? (they may fight over what to do with it, and/or timing of a sale, and when they finally do sell, it would be taxed at 28% of 100% of the sale price, since they have no cost basis)?

Finally: does who you use to sell have any pros/cons? Is a private sale preferable to a HA auction? If expenses aren’t deductible (can’t be subtracted from your gross to lessen the net), then wouldn’t it be better to use an auction house that charges the premium to the buyer (and not a broker who charges me as the seller)?

The Cap gains deduction for selling a house you've been using as your principal residence is pretty substantial (250K individual/500K married), make sure you don't pay for gains on what you don't have to.

Edited January 25, 2022 by rjpb

[ttfitz]

On 1/25/2022 at 9:22 AM, Mr. Zipper said:

So to be clear... the $600 threshold goes into effect for Tax Year 2022?

EDIT: Ugh... it appears it is in effect now. I just checked my personal Paypal and there is a 2021 1099-K for the small amount of transactions I had  (~$1,200).  

Do you live in "Upstate NY" like your profile says, or somewhere else?

I ask because some states - like my state of Virginia - have already lowered the threshold for this, so you may be in one of those states.

[Mr. Zipper]

On 1/25/2022 at 7:13 PM, ttfitz said:

Do you live in "Upstate NY" like your profile says, or somewhere else?

I ask because some states - like my state of Virginia - have already lowered the threshold for this, so you may be in one of those states.

Yes, I live in New York State. I am not aware of NY lowering the limit. I didn't have a 1099-K last year on the personal PayPal.  This is where it is on my personal (non biz) Paypal Account. It appears that the 1099-K does not include F&F payments.  

Activity > Statements

[non sequitur]

On 1/25/2022 at 5:15 PM, rjpb said:

The Cap gains deduction for selling a house you've been using as your principal residence is pretty substantial (250K individual/500K married), make sure you don't pay for gains on what you don't have to.

Yes for sure - I started plugging the info into TurboTax and it applied that $500K reduction. In fact, after adding up receipts from all the work done to the house over 20 years, and listing/closing costs, and applying that $500K, the resulting capital gain is almost equal to the capital loss I'd been carrying forward since the 2007 crash (but it does eat it ALL, so now I'll have no more loss to carry forward into 2022 if I do sell the comic, which is Detective 27 btw). 

[70s80sTimeMachine]

On 1/25/2022 at 7:13 PM, ttfitz said:

Do you live in "Upstate NY" like your profile says, or somewhere else?

I ask because some states - like my state of Virginia - have already lowered the threshold for this, so you may be in one of those states.

I believe that I read Vermont, Maryland, Massachusetts, and Illinois were in same early boat as Virginia as well.

[snitzer]

On 1/26/2022 at 10:32 AM, 70s80sTimeMachine said:

I believe that I read Vermont, Maryland, Massachusetts, and Illinois were in same early boat as Virginia as well.

VA has had it for a year or two now. It's nonsense and things are rapidly changing in VA for the better 

[jimjum12]

On 1/25/2022 at 7:13 PM, ttfitz said:

Do you live in "Upstate NY" like your profile says, or somewhere else?

I ask because some states - like my state of Virginia - have already lowered the threshold for this, so you may be in one of those states.

I think there were a dozen or so States last year..... I'm in VA too. I've been getting one for ten years and I don't think I've ever crossed 200 transactions... if so, just barely. Mine first came when I elected to accept "Merchant Cards" on eBay. GOD BLESS.... 

-jimbo(a friend of jesus)

[rjpb]

Neither Paypal or ebay have listed 1099Ks for me so far this year, and I had over the 200item/$20K thresh hold for ebay, and thousands in separate g&s payments into paypal. I keep thorough track of sales myself though, and report sales income on my taxes, so I don't actually need them. The three years previous I came up around ten items short of the 200 item trigger for ebay and was never sent 1099 forms. I expect they show up to be downloaded in the next week.

I'm curious as to whether ebay includes sales taxes they collect on the 1099s they generate, as they do when they calculate total sales under the performance tab. The IRS does not consider this as part of your gross sales, and the sales taxes should not be listed as such on schedule C. 

[FlyingDonut]

On 1/25/2022 at 11:43 AM, F For Fake said:

Tangentially related to this thread, has anyone received their 1099k from eBay for 2021? When I go into Payments it says my 1099 is ready, but when I go to the taxes tab, it's not in there. I have it set to online AND mail, so I guess I'll get it one way or another, but I'd kinda like to get all of this stuff turned in and taken care of.

Got it today from Paypal. 49 transactions. Your reminder that you are taxed on your net and not your gross.

[CycleGirl]

Here are several things that I would suggest. 

1) Sell on sites like Ebay that are sure to send both you and the IRS a 1099. Don't use craigslist, the boards, or private channels. 

2) Get payment on sites like Paypal on Venmo where you are also sure to get a 1099. Don't use person-to-person cryptocurrency or cash. 

Everyone should pay their taxes!

I'm sure all that military hardware they are shipping to eastern Europe right now will help the people just as much as the stuff we gave to the nice people running Afghanistan. Surely none of it will fall into the wrong hands because we can count on our government to make sure that won't happen.

Edited January 27, 2022 by CycleGirl