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 Replies: 18 / Views: 7,087 |
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Bedrock of the Community
United States
10047 Posts |
And...just who is surprised by something like this?
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Pillar of the Community
2145 Posts |
Well, when 46 was campaigning he stated he was going to raise taxes - too late now to do anything about that. But people have been figuring out how to avoid paying taxes for as long as they've been around - hoping this is the norm in this situation also. I guess there will be more selling here on CCF or figure out how to make my dog a dependent.......  |
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Pillar of the Community
 United States
5192 Posts |
Quote:
I guess there will be more selling here on CCF or figure out how to make my dog a dependent... That won't make a difference as long as PayPal is the payment processor. PayPal will keep track of the amount of money received in your account from sales and send you a 1099-K when it reaches $600. I can imagine that when ebay sees their income crater due to millions of small sellers throwing in the towel, they will cry faul and lobby Congress to change the rules again. Edited by NumisEd
03/12/2021 10:19 pm
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Pillar of the Community
United States
4085 Posts |
You only pay taxes to the extent that the value of the item sold exceeds your original purchase price. So sell that old blender that cost $50 15 years ago for $15? No tax due.
In addition, whether Paypal sends you a form or not does not change any responsibility for reporting. I know most people just ignore this type of thing, but you were responsible all along; they are just closing loopholes where people are running side businesses and making money without reporting the income and paying taxes on it.
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Pillar of the Community
United States
5192 Posts |
What "closing loopholes"?
There is a huge area between $20,000 and $600.
Nobody is arguing you should pay taxes on $20K in annual earnings, but lowering it to $600 is just plain petty. Even in Socialist Europe they don't go that far.
Edited by NumisEd
03/13/2021 12:33 pm
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Pillar of the Community
United States
4085 Posts |
You are responsible for paying taxes on income, regardless of the amount, regardless of whether you get a 1099 or not. The article straight out says this: Quote:
Whether or not you get a tax form does not change what you actually owe, e.g. if you don't get a tax form you still have to report income earned, and if you do get a tax form you still only pay tax on the actual profits. They closed off the huge area between $600 and $20k where people were supposed to be paying taxes but probably weren't. It's got nothing to do with socialism. |
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Pillar of the Community
United States
5192 Posts |
Then let's lower it to $0.01 using your same arguments.
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Pillar of the Community
 United States
6620 Posts |
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The government burying unrelated legislation is other bills? What? Never. Yea they would never do that. They are always up front with us  |
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Pillar of the Community
United States
4085 Posts |
If you make $10 in interest on your checking or savings account, you will get a 1099. That seems petty to me. I want to be able to get $20,000 in interest without getting a 1099 so I don't have to claim it on my taxes.
In both cases, they picked a threshold. Regardless of the threshold picked, you are supposed to report it.
Edited by KenKat
03/13/2021 12:50 pm
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Pillar of the Community
United States
5684 Posts |
The problem is that the 1099-K reflects gross sales, not income. Your actual net income may be a small fraction of that once you subtract acquisition costs and selling expenses. But maintaining records on all that for each individual sale in order to report business income on schedule C is going to be a real pain for many ebay sellers. |
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Pillar of the Community
United States
5192 Posts |
Last night I started to maintain a spreadsheet with what coins I already sold and will sell on ebay this year. Including acquisition costs, posting and shipping costs, and sales. Still debating whether or not I should stop selling when I have reached $599 in gross sales. I am not a professional coin seller, just a guy who sells off his unwanted coins. It just seems a lot (too much?) work to keep track of all of this for a measly $600. Quote:
The problem is that the 1099-K reflects gross sales, not income. Exactly. As I see it, if you are selling an item that you have either 1) produced, or 2) acquired as a reseller, then a fraction of the proceeds when selling can be earmarked as "income" as you have spend "labor hours" to do so. But if there are no "labor hours" involved, there cannot be any "income" either. In that sense, selling your coin collection is no different than selling the home you own. Why should there be "income" and "income taxes" when selling your coins when there is no "income" nor "income taxes" when selling your home? Just imagine everyone getting a 1099-K when selling their home and the IRS demanding you pay income taxes on a percentage of the proceeds because you "labored" to sell it! Edited by NumisEd
03/13/2021 3:34 pm
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Pillar of the Community
United States
2335 Posts |
Getting a 1099 from PayPal (or anyone else) is not what determines whether or not you owe taxes. It's the taxpayers responsibility to report & pay whether or not you receive a 1099. I'm a small time reseller and know many people that do the same. It's amazing how many people stop selling when they get close to $20,000 in sales to avoid getting a 1099 from PayPal. It's obvious they either don't understand the law or they are oblivious to the fact that sales through eBay/PayPal leave a paper trail. Quote:
As I see it, if you are selling an item that you have either 1) produced, or 2) acquired as a reseller, then a fraction of the proceeds when selling can be earmarked as "income" as you have spend "labor hours" to do so. But if there are no "labor hours" involved, there cannot be any "income" either.
In that sense, selling your coin collection is no different than selling the home you own. Why should there be "income" and "income taxes" when selling your coins when there is no "income" nor "income taxes" when selling your home? Just imagine everyone getting a 1099-K when selling their home and the IRS demanding you pay income taxes on a percentage of the proceeds because you "labored" to sell it!
Under current IRS guidelines homes & coins are classified as investments. Selling either one triggers a tax if you make a profit. |
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Pillar of the Community
United States
5192 Posts |
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Under current IRS guidelines homes & coins are classified as investments. Selling either one triggers a tax if you make a profit. Investments are handled by 1099-INT or 1099-DIV, not 1099-K. |
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Pillar of the Community
United States
2335 Posts |
I'm aware of the various types of 1099 and am not sure what your point is. The fact is the underlying transaction triggers the tax. The 1099 form itself is what the IRS refers to as an "information returns". Maybe I shouldn't have used the term investments. Sale of a house generates a form 1099-S. I'm not sure what form is used for collectibles. In either case when a profit is made taxes are due whether or not a 1099 (of whatever type) is issued.
Edited by trdhrdr007
03/14/2021 12:10 pm
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Pillar of the Community
United States
4085 Posts |
Homes and coins are treated differently due to the way the tax law was written. Capital gains from the sale of your home are excluded unless they exceed $250k for a single or $500k for a married/joint owner. When the tax law was passed, somebody decided that would be a good idea and it was made part of the law that was passed. No one decided something like that was a good idea for coins. So there's nothing in the law regarding special treatment for coins.
So it's just how the laws were written. I do get the hassle this introduces for people, especially the little guy just trying to sell a few coins to fund a hobby.
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Replies: 18 / Views: 7,087 |
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Posted 03/12/2021 9:54 pm
