IRS wants a cut of your ebay sales

[masonphillip]

[quote="ccouch (Chad)":21yp78kf]You guys do realize that they've ALWAYS wanted it, right? The laws haven't changed. They've just had a difficult time enforcing the law because they lacked the mechanisms to do so. The new 1099 reporting will change that.

And I'm amused at how many times I see people say that they'll just deduct all of their purchases for the year. If you get audited, even a slightly dumb IRS agent will laugh you out of the room on that one. They'll want to know what your cost basis was in the items that you sold. As an example, the guy who sold the Strasburg Superfractor last week ain't gonna be able to deduct all of his purchases for the year to offset the sale. His cost basis in the card is at a maximum what he paid for the case and would even more likely be determined to be the cost of the case divided by the number of cards in the case.

Commence people telling someone who has a masters degree in taxation that he doesn't know what he's talking about in 3... 2.... 1...

Exactly. Post thanked. And can you even write off losses like that if you aren't filing as a business?[/quote:21yp78kf]

Which would make it important to flip an entire case....that way you don't wind up reporting only gains.

I don't see how they couldn't allow you to write off losses but then ding you on the gains. If they are going to make you report total ebay sales, that's a revenue figure, no one gets taxed on revenue so you have to get to a net somehow.

 

[ccouch (Chad)]

You guys do realize that they've ALWAYS wanted it, right? The laws haven't changed. They've just had a difficult time enforcing the law because they lacked the mechanisms to do so. The new 1099 reporting will change that.

And I'm amused at how many times I see people say that they'll just deduct all of their purchases for the year. If you get audited, even a slightly dumb IRS agent will laugh you out of the room on that one. They'll want to know what your cost basis was in the items that you sold. As an example, the guy who sold the Strasburg Superfractor last week ain't gonna be able to deduct all of his purchases for the year to offset the sale. His cost basis in the card is at a maximum what he paid for the case and would even more likely be determined to be the cost of the case divided by the number of cards in the case.

Commence people telling someone who has a masters degree in taxation that he doesn't know what he's talking about in 3... 2.... 1...

Great explanation, took kind of a douchy turn at the end but whatever.


Also, had a doctor once tell me I had a sprained knee even though I hadnt hurt it, turned out to be lymes disease.

Just Sayin.

The truth is what the truth is. Dating back to the Beckett boards in 2002, I've seen it play out the same way over and over again.

 

[ccouch (Chad)]

[quote="ccouch (Chad)":l9gxap74]You guys do realize that they've ALWAYS wanted it, right? The laws haven't changed. They've just had a difficult time enforcing the law because they lacked the mechanisms to do so. The new 1099 reporting will change that.

And I'm amused at how many times I see people say that they'll just deduct all of their purchases for the year. If you get audited, even a slightly dumb IRS agent will laugh you out of the room on that one. They'll want to know what your cost basis was in the items that you sold. As an example, the guy who sold the Strasburg Superfractor last week ain't gonna be able to deduct all of his purchases for the year to offset the sale. His cost basis in the card is at a maximum what he paid for the case and would even more likely be determined to be the cost of the case divided by the number of cards in the case.

Commence people telling someone who has a masters degree in taxation that he doesn't know what he's talking about in 3... 2.... 1...

Exactly. Post thanked. And can you even write off losses like that if you aren't filing as a business?

Which would make it important to flip an entire case....that way you don't wind up reporting only gains.

I don't see how they couldn't allow you to write off losses but then ding you on the gains. If they are going to make you report total ebay sales, that's a revenue figure, no one gets taxed on revenue so you have to get to a net somehow.[/quote:l9gxap74]

You have to actually REALIZE a loss (i.e. actually sustain the loss) before you can RECOGNIZE a loss (actually report the loss and get the tax benefit). If you buy something and hold it, you haven't realized the loss, so you can't recognize the loss.

 

[ccouch (Chad)]

[quote="ccouch (Chad)":2n75bn3g]You guys do realize that they've ALWAYS wanted it, right? The laws haven't changed. They've just had a difficult time enforcing the law because they lacked the mechanisms to do so. The new 1099 reporting will change that.

And I'm amused at how many times I see people say that they'll just deduct all of their purchases for the year. If you get audited, even a slightly dumb IRS agent will laugh you out of the room on that one. They'll want to know what your cost basis was in the items that you sold. As an example, the guy who sold the Strasburg Superfractor last week ain't gonna be able to deduct all of his purchases for the year to offset the sale. His cost basis in the card is at a maximum what he paid for the case and would even more likely be determined to be the cost of the case divided by the number of cards in the case.

Commence people telling someone who has a masters degree in taxation that he doesn't know what he's talking about in 3... 2.... 1...

Exactly. Post thanked. And can you even write off losses like that if you aren't filing as a business?[/quote:2n75bn3g]

An individual filer would file Schedule C with his tax return to report such activity. The seller would report his gross sales on Line 1 and then deduct cost of goods SOLD (sold being a key word) on Line 4 and all other expenses in Lines 8 through 27.

 

[mudflap02]

What's a taxes?

 

[ChasHawk]

Anyone bitching/complaining/commenting in this thread actually sell $20k a year on eBay?

If so, you can fund my PC purchases and write that off as a loss. :lol:

 

[uniquebaseballcards]

H&R Block said a typical hobbyist is someone who "sells items occasionally without intent to make a profit." But if sales become "regular activities done to make a profit," it might be considered a business. Someone with a hobby has to report all income generated from sales and can deduct all related expenses, but not more than the total profit.

 

[masonphillip]

Anyone bitching/complaining/commenting in this thread actually sell $20k a year on eBay?

If so, you can fund my PC purchases and write that off as a loss. :lol:

I've sold $26.8K on ebay in the last 12 months, not all profit but yes there are many who hit $20k plus. If you do a couple of large breaks every year, you'll get there pretty quick.

Consider, bronze powersellers have to do $1k a month - $12k a year, Silver is $3k a month - $36K a year. So, that being said, everyone above Silver qualifies and probably quite a few of the Bronze too.

 

[lisu]

I'm a bronze powerseller but probably won't get to $20k sales on Ebay this year.

 

[muskiesfan]

I think the 200 transacions is not needed. This may sound stupid, but what if someone did 200 $3 transactions? They would have to file taxes on the $600?

Others have already mentioned, this is nothing new. The government/IRS just wants additional revenue. Setting the bar at $20,000 I guess I get, but there will be people (maybe not many) who get nowhere near $20,000 and still do 200+ transactions a year.

 

[bowmanchromeandorr]

[quote="ccouch (Chad)":3t5qcpu9]You guys do realize that they've ALWAYS wanted it, right? The laws haven't changed. They've just had a difficult time enforcing the law because they lacked the mechanisms to do so. The new 1099 reporting will change that.

And I'm amused at how many times I see people say that they'll just deduct all of their purchases for the year. If you get audited, even a slightly dumb IRS agent will laugh you out of the room on that one. They'll want to know what your cost basis was in the items that you sold. As an example, the guy who sold the Strasburg Superfractor last week ain't gonna be able to deduct all of his purchases for the year to offset the sale. His cost basis in the card is at a maximum what he paid for the case and would even more likely be determined to be the cost of the case divided by the number of cards in the case.

Commence people telling someone who has a masters degree in taxation that he doesn't know what he's talking about in 3... 2.... 1...

As someone who has a degree in Accounting and who will be sitting for the CPA in 6 months, I concur. :lol:[/quote:3t5qcpu9]


as yet another accountant on here, he is correct the laws have always been there just not enforced. and the irs will break it down on a card/case basis... dems the breaks

 

[mburgin]

[quote="ccouch (Chad)":qc86bcrk]You guys do realize that they've ALWAYS wanted it, right? The laws haven't changed. They've just had a difficult time enforcing the law because they lacked the mechanisms to do so. The new 1099 reporting will change that.

And I'm amused at how many times I see people say that they'll just deduct all of their purchases for the year. If you get audited, even a slightly dumb IRS agent will laugh you out of the room on that one. They'll want to know what your cost basis was in the items that you sold. As an example, the guy who sold the Strasburg Superfractor last week ain't gonna be able to deduct all of his purchases for the year to offset the sale. His cost basis in the card is at a maximum what he paid for the case and would even more likely be determined to be the cost of the case divided by the number of cards in the case.

Commence people telling someone who has a masters degree in taxation that he doesn't know what he's talking about in 3... 2.... 1...

Exactly. Post thanked. And can you even write off losses like that if you aren't filing as a business?

Which would make it important to flip an entire case....that way you don't wind up reporting only gains.

I don't see how they couldn't allow you to write off losses but then ding you on the gains. If they are going to make you report total ebay sales, that's a revenue figure, no one gets taxed on revenue so you have to get to a net somehow.[/quote:qc86bcrk]

actually, its the IRS and they can do anything they want to do. it's the only organization in the world that can legally go into any of your bank accounts and withdraw the money you owe them and you can do nothing about it. i just got them paid off this year myself. despite all the bitching and complaining here, take it from experience. when the IRS comes knocking on your door, don't close it in there face and tell them to kiss your ass. you WILL pay what they say you owe them and nothing you can do about it. period!

 

[Huffamaniac]

I am wondering about the 200 rule also. I tendto sell a lot of lowend stuff I do not want, and will easily get to the 200 mark, but not even close to the 20K. Is the rule 20K plus 200 transactions or 20K or 200 tsells?

I think the 200 transacions is not needed. This may sound stupid, but what if someone did 200 $3 transactions? They would have to file taxes on the $600?

Others have already mentioned, this is nothing new. The government/IRS just wants additional revenue. Setting the bar at $20,000 I guess I get, but there will be people (maybe not many) who get nowhere near $20,000 and still do 200+ transactions a year.

 

[masonphillip]

[quote="ccouch (Chad)":3nga7spo]You guys do realize that they've ALWAYS wanted it, right? The laws haven't changed. They've just had a difficult time enforcing the law because they lacked the mechanisms to do so. The new 1099 reporting will change that.

And I'm amused at how many times I see people say that they'll just deduct all of their purchases for the year. If you get audited, even a slightly dumb IRS agent will laugh you out of the room on that one. They'll want to know what your cost basis was in the items that you sold. As an example, the guy who sold the Strasburg Superfractor last week ain't gonna be able to deduct all of his purchases for the year to offset the sale. His cost basis in the card is at a maximum what he paid for the case and would even more likely be determined to be the cost of the case divided by the number of cards in the case.

Commence people telling someone who has a masters degree in taxation that he doesn't know what he's talking about in 3... 2.... 1...

As someone who has a degree in Accounting and who will be sitting for the CPA in 6 months, I concur. :lol:

as yet another accountant on here, he is correct the laws have always been there just not enforced. and the irs will break it down on a card/case basis... dems the breaks[/quote:3nga7spo]

More than anything, it really ought to make you keep track of all your costs and sales in detail, some already do, those that don't, should.

 

[kdailey4315]

For their 2011 tax returns, "taxpayers who annually sell more than $20,000 worth of goods and have more than 200 electronic transactions" will receive a new IRS form, known as 1099-K, reporting the proceeds

Are we 100% positive it's 20K AND 200 sales or is it 20K OR 200 sales.

 

[goldenegg1]

How is this any different from having a garage sale?
I guess I am lucky that my wax guy keeps track of everything I spend, I will write it off!

 

[sportscardtheory]

If you sell $20,000+ with 200+ items sold in one year then they consider you a business and tax you as such, then you can claim losses. You can claim what you paid for every card/item that you sold, you can claim eBay fees, you can claim PayPal fees, you can claim shipping supplies that you used, you can claim shipping charges and you might even be able to claim business expenses since they are treating/taxing you like a business. Is this correct?

 

[masonphillip]

If you sell $20,000+ with 200+ items sold then they consider you a business and tax you as such, then you can claim losses. You can claim what you paid for every card/item that you sold, you can claim eBay fees, you can claim PayPal fees, you can claim shipping charges and you even might be able to claim business expenses since they are treating/taxing you like a business. Is this correct?

Yes, like Chad said above, Schedule C.

 

[ChasHawk]

Reading comprehension is at an all time low here at the good ole FCB.

 

[Therion]

Reading comprehension is at an all time low here at the good ole FCB.

Actually, I'd argue that the comprehension in this thread is impressively high for FCB :lol: