Are you in USA and sell things from time to time?

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Superduper

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Not sure if you guys are aware but sneaked into one of those stimulus bills was this new reporting requirement for all cash apps to report any payments received that totals $600 or more in ONE YEAR! That amounts to $50/month. Or about 1/4 - 1/3 of an M90 these days. Regardless if you actually sold it at a loss, you will get a 1099k and you'd have to report it as income to the IRS. You could of course "prove" that you sold it at a loss if you have proof that you paid more for it, or you could offset some of the profits if you have receipts to show the improvements costed you money (labor is not allowed to be used to offset profit). This means if you get paid via PayPal, Venmo, eBay, Amazon, etc... you WILL get a 1099k if you received more than $600.

I recently got this email from eBay. They describe clearly what is happening. I believe it is affecting their business because small individual sellers are probably no longer selling (or don't know yet that they are getting a 1099k), although the fact that they are basically taking a 15% cut from your sales off the top is problematic too.

You can read more about this and how you can help contact your congress person and pressure them to reverse this stupid law. I just did it. Please consider doing this, today. This needs to be repealed or it will basically kill all hobby related economic activity if you often buy and sell used items, and I'm not just talking about eBay. If you sell HERE and take PayPal, YES it affects you. When you follow the following link, click on [contact congress] and eBay will mail a form to your lawmakers.

https://www.ebaymainstreet.com/issues/1099-k-federal-tax-reporting

Oh and if you did follow through with the contact congress deal, please leave a quick note.... I'm interested in seeing how many people actually are actually concerned with this. I would've installed a poll so you could simply click a button but didn't see a way to do that after the fact.eBay 1099k.png
 
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hopey

Member (SA)
I think it always been that way here in OZ as well. Your a sole trader so your supposed to run it like a business. It's only a problem if you get a Tax audit as it's an honesty system. I guess that's why some avoid doing tax returns altogether.
 

blu_fuz

Well-Known Member
Staff member
I did hear about this a few months ago and was not excited by any means. When I found out I immediately pulled listings where I would have to take some form of an e-payment. Wouldn't you know it, I had a local listing a few weeks later, buyer was lined up for a whole week to buy an item for $650. They ended up coming on a day I wasn't home but my wife was and asked my wife if she can take Zelle as a payment. Mind you, I'm in meetings and can't talk but frantically trying to respond back to my wife through text who is trying to make the sale with this person. I was so pissed that even after having a week for them to get the cash from the bank to pay me with, they never ask before or mention that they aren't bringing cash. I took a paypal payment and ended up hitting the $600 threshold on my first deal after finding out the new rules. We will see what happens come tax time......
 

Reli

Boomus Fidelis
I actually agree with the concept of requiring people to report capital gains on everything they flip for a profit. If I have to pay capital gains tax on my stock trading, then someone who trades artwork or other "vintage" items should pay it too.

There are 3 problems however:

#1 most people haven't retained records saying what they paid for something many years ago. Yes, you could estimate it, but you probably won't have any paper evidence. I checked Ebay and it seems they only keep your purchase data back to 2020. With that being said, I doubt the IRS will audit you or write back demanding paper evidence. They don't have the manpower to follow up with everyone about stuff like that. Republicans cut their budget many years ago, and it will be a long time before they recover from that.

#2 The $600 threshold is too low. It puts too much burden on small-time sellers like us, instead of big-time white-collar criminals. That's typical for DC....they don't have the courage to go after the wealthy tax evaders, inside traders, and real estate & investment scammers like Trump and his buddies, because they get most of their donations from people like that.

#3 Ebay will probably raise fees to cover their losses from sellers who decide to stop listing as many items due to this new law.
 
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blu_fuz

Well-Known Member
Staff member
The threshold should be more like $3-5k and 10-20 transactions. We should never be taxed again on consumer goods anyway regardless if it is a 2 day flip or something I've had for years. We get taxed on income, taxed when we buy, and taxed again when we sell - it's BS. With inflation and constantly getting kicked in the balls trying to keep money in your bank account, when will the average person ever be comfortable?
 

Reli

Boomus Fidelis
The threshold should be more like $3-5k and 10-20 transactions. We should never be taxed again on consumer goods anyway regardless if it is a 2 day flip or something I've had for years. We get taxed on income, taxed when we buy, and taxed again when we sell - it's BS. With inflation and constantly getting kicked in the balls trying to keep money in your bank account, when will the average person ever be comfortable?


I hear what you're saying, but then why is it fair for me and every other stock trader to pay tax on those profits? Or how about home sale profits....

I think the bigger concern is, the sales tax forced onto people who BUY used goods, especially cars. It discourages people from buying used goods, which is dumb because buying used helps prevent waste and pollution.
 

Superduper

Moderator
Staff member
This issue affects USA residents only, if you live elsewhere, this does not affect you so please don't add to this as it only confuses the issue.

@blu_fuz, please contact your congressperson and ask them to push for a rescission. You can do so directly, or use the feature on the eBay page (click on link). BTW I think you've made a mistake on your local payment thing... Zelle is the one and only app that has stated that they do not provide 1099's. I did some research. Unfortunately, zelle is not nearly as popular and getting a buyer to use zelle (most don't have it or able to use it). Check it.

@Reli, regarding filing of profits/loss... my issue is I think it should ONLY apply for profits where documentation is readily available. Stocks and bank interest and business ventures can easily document all of these things. Even if you kept NO records, the financial institution you are associated with has them. But to tax and expect small time sellers who just want to sell off their old baby clothes, that big-wheel trike in the garage, your grandma's old toaster oven in a garage sale... that's just a bridge too far. There is zero documentation on these types of sales, and ALL of the burden falls on the seller who is almost certainly not going to have any. Without documentation, you pay taxes on 100% of the transaction, not just the 10% profit. Or perhaps if you sold it at a loss but can't prove the original purchase amount. You can see the dilemma here. To suggest that you won't get audited and therefore it's no problem is absurd. That's like saying go ahead and grab everything you can in walgreen and just walk out the door -- your chances of getting convicted is almost none. Finally there's the fact that the law was passed and applies to all 2022 sales regardless of when the sold item was acquired. Because documentation is expected, all sales for items acquired prior to 2022 should be exempt since there was no reason prior to 2022 to have kept purchase receipts on the old 1990 nintendo game cartridge or that old 1980s apple IIe computer. Anyway where you live, your voice probably won't make a difference anyway haha, we know how your representatives vote so this probably doesn't apply to you. ;-)
 
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Eric

Member (SA)
I submitted the Ebay form. $600 is too low in my opinion. This could affect the casual seller who just wants to get rid of some stuff. I think the original intent was to capture tax from people selling as a business which that I do agree with.

Next I'll have to list the profits from my garage sale items.
 
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