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New Relevant Legislation Included In The Newest Passed Covid Relief Bill.

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 Posted 03/12/2021  1:48 pm Show Profile   Check casualcoincollector's eBay Listings Check casualcoincollector's eCrater Listings Bookmark this topic Add casualcoincollector to your friends list Get a Link to this Message
So, it looks like the laws are changing next year pertaining to PayPal and all other third party payment processers in regards to who receives a 1099-K form.

Currently, you and the IRS would only get a 1099-K from PayPal etc. if a business or individual received $20,000 or more in payments and had 200 or more transactions in a calendar year. Whereas the new legislation has it starting next year that anyone that receives $600 or more in a calendar year in payments will be getting a 1099-K form. This may change things for a lot of casual eBay sellers. The website below lays it all out.

https://www.doctorofcredit.com/stim...-k-tax-form/
Edited by casualcoincollector
03/12/2021 2:00 pm
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 Posted 03/12/2021  2:22 pm  Show Profile   Bookmark this reply Add nfine to your friends list Get a Link to this Reply
Gotta pay for all that free stuff somehow.
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 Posted 03/12/2021  3:30 pm  Show Profile   Bookmark this reply Add NumisEd to your friends list Get a Link to this Reply
If you are trying to sell off your coin collection on eBay, you might be better off making a deal with your LCS or a numismatic auction house in 2022 and beyond.
Selling P2P on CCF is another option that has become more attractive than eBay.

In short, eBay and PayPal are gonna be the big losers as many small coin sellers who are not interested in a pile of red tape will simply leave.
Edited by NumisEd
03/12/2021 4:44 pm
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 Posted 03/12/2021  4:48 pm  Show Profile   Check GrapeCollects's eBay Listings Bookmark this reply Add GrapeCollects to your friends list Get a Link to this Reply
Whhhhhhhhhhhaaaaaaaaaaaat? The government burying unrelated legislation is other bills? What? Never.
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 Posted 03/12/2021  6:40 pm  Show Profile   Bookmark this reply Add Earle42 to your friends list Get a Link to this Reply
And...just who is surprised by something like this?
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 Posted 03/12/2021  9:54 pm  Show Profile   Bookmark this reply Add Rothery to your friends list Get a Link to this Reply
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.......
Everything can change in just one day.........
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 Posted 03/12/2021  10:16 pm  Show Profile   Bookmark this reply Add NumisEd to your friends list Get a Link to this Reply

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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 Posted 03/13/2021  09:30 am  Show Profile   Bookmark this reply Add KenKat to your friends list Get a Link to this Reply
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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 Posted 03/13/2021  12:32 pm  Show Profile   Bookmark this reply Add NumisEd to your friends list Get a Link to this Reply
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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 Posted 03/13/2021  12:41 pm  Show Profile   Bookmark this reply Add KenKat to your friends list Get a Link to this Reply
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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 Posted 03/13/2021  12:43 pm  Show Profile   Bookmark this reply Add NumisEd to your friends list Get a Link to this Reply
Then let's lower it to $0.01 using your same arguments.
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 Posted 03/13/2021  12:47 pm  Show Profile   Bookmark this reply Add keith12 to your friends list Get a Link to this Reply

Quote:
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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 Posted 03/13/2021  12:48 pm  Show Profile   Bookmark this reply Add KenKat to your friends list Get a Link to this Reply
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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 Posted 03/13/2021  1:45 pm  Show Profile   Bookmark this reply Add Zurie to your friends list Get a Link to this Reply
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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 Posted 03/13/2021  1:50 pm  Show Profile   Bookmark this reply Add NumisEd to your friends list Get a Link to this Reply
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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 Posted 03/13/2021  4:06 pm  Show Profile   Bookmark this reply Add trdhrdr007 to your friends list Get a Link to this Reply
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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