New Tax Law Hidden In COVID Relief Bill Will Crush eBay/Paypal Sellers (6 Viewers)

[davin]

Capital gains tax, if you sell an item for more than you paid for it.

So if you use F&f or Venmo an it’s over 600 you will still get a 1099-k ????

 

[DMack]

@ReallyGoodUsername says you’ll be fine. He’s even going out on a limb and giving one to one odds.

 

[Stufflymcstuff]

Sure of course
100 on this site might be a stretch maybe

So if 10000 hid 25,000 each in tax you wouldn’t even pay the IRS salary

The middle class is hundreds of millions of people who at Mist hide some sales on eBay for the 9,999 limit or here flipping chips.

If you squeeze an extra 4500 out of the entire middle class every time they file plus lower the death tax exemption limit that’s trillions per year.

Being a millionaire now doesn’t mean much that’s still middle class. Having assets of that doesn’t mean you are banking a million per year.

You said you want to tax the billionaires but they are paying the majority of the tax revenue already and more than ever this year. That’s with Trumps tax plan BTW.
On top of all the revenue their company jobs produce.
Let’s confiscate all the wealth from the billionaires then. It would cover less than one year of the budget and then production and GDP plummets. Who do you think drives innovation and stimulates jobs growth. Lots of those evil top 5%.
I don’t think they should pay zero but I’m not ignorant enough to think they actually do pay zero.

Again there is no tax collection problem we’ve had record tax revenue this and last year. It’s a spending problem just look at spending the past year and proposed budgets. They are out over their skis and taxing the billionaires at 50% won’t cover it not even close.

The middle class is 99% of this site I’d say. The Uber rich or corporations won’t feel a few percent increase anyway. Those higher costs are all passed onto the consumer when you tax tax small businesses which make up a huge percentage of businesses in the US.

This tax the rich is a fallacy. They already pay the far and away percentage of taxes collected today.

You think 100 millionaires on this site is a stretch?

Roughly 10% of households have a net worth > 1m. There are 8,200 registered users here, and people who have the time and resources to indulge in high end poker chips on an internet forum skew way way higher than 'average' both due to the age of users and the nature of what we're buying.

The top 10% already pay nearly 80% of the current tax revenue.

If you think the few dollars from a couple of billionaire tax cheats is what they want you are just wrong. There are a couple of them maybe a few bucks. But if you get the entire middle class foe another 10% that’s trillions

where does this stat even come from? in case you don't trust left wing reporting on it, i think everyone would agree a site like heritage.org leans right and is pro rich, and they cite IRS numbers of the top 10% paying about half the tax revenue.

https://www.heritage.org/taxes/commentary/1-chart-how-much-the-rich-pay-taxes


but even pretending your numbers are defensible via some reputable site that interpreted the numbers differently, whatever stats you may have to support your thesis that fraud isn't common for rich people is i'm sure even shakier. fraud is by it's nature something very difficult to measure. people spend their lives trying to figure out how best to prevent it, and how to perpetrate it while avoiding detection. and there's much more of an incentive to be good at the latter.

 

[DMack]

but even pretending your numbers are defensible via some reputable site that interpreted the numbers differently, whatever stats you may have to support your thesis that fraud isn't common for rich people is i'm sure even shakier. fraud is by it's nature something very difficult to measure. people spend their lives trying to figure out how best to prevent it, and how to perpetrate it while avoiding detection. and there's much more of an incentive to be good at the latter.

That’s one heck of a generalization. Wow.

 

[DrStrange]

Please don't set of a LLC / SubS / C corp and think you are being "smart". You will open yourself to all sorts of problems, obligations and new expenses. Making up lies on your tax return is dumb and for what purpose?

Selling $5,000 worth of used stuff you bought new isn't going to have a tax liability unless the used stuff is somehow more valuable than it cost when it was new. Make a reasonable estimate of the purchase price paired with the price you got on eBay. Lost money almost for sure - no taxes owed and easily put to rest.

 

[davin]

Please don't set of a LLC / SubS / C corp and think you are being "smart". You will open yourself to all sorts of problems, obligations and new expenses. Making up lies on your tax return is dumb and for what purpose?

Selling $5,000 worth of used stuff you bought new isn't going to have a tax liability unless the used stuff is somehow more valuable than it cost when it was new. Make a reasonable estimate of the purchase price paired with the price you got on eBay. Lost money almost for sure - no taxes owed and easily put to rest.

What if receipts are loss how do you prove how much you paid for it (expenses)

 

[DoubleEagle]

Already got a message from eBay to provide a ITIN or full social security to get my money released on a transaction I had, so looks like this has been implemented on January 1

I feel robbed as what does selling used things on eBay have to do with paying taxes. I already paid for these items and paid taxes on them and they are used items I sold.

Keep records.

 

[nezara]

What if receipts are loss how do you prove how much you paid for it (expenses)

I talked to a CPA about this last year in regards to some of my sports collectables. I'm not a CPA myself, so judge second hand info for yourself. But some info relevant to poker chips:
- Receipts are best
- If you don't have a receipt you can approximate based on the time frame you purchased it and market value. So you never have to have a cost basis of 0.
- If you did something to improve the thing that took your time - in sports collectables chasing autographs - in chips cleaning/flattening - you can't expense your time
- If you paid to improve the thing then you can expense it
- If you paid for anything else - shipping supplies, insurance, whatever everything can be counted towards the cost basis

 

[davin]

I talked to a CPA about this last year in regards to some of my sports collectables. I'm not a CPA myself, so judge second hand info for yourself. But some info relevant to poker chips:
- Receipts are best
- If you don't have a receipt you can approximate based on the time frame you purchased it and market value. So you never have to have a cost basis of 0.
- If you did something to improve the thing that took your time - in sports collectables chasing autographs - in chips cleaning/flattening - you can't expense your time
- If you paid to improve the thing then you can expense it
- If you paid for anything else - shipping supplies, insurance, whatever everything can be counted towards the cost basis

So when we file our taxes it will have sections to fill out with those expenses when entering the 1099-k? Sorry for noob questions I never had a 1099-k

 

[Stufflymcstuff]

That’s one heck of a generalization. Wow.

A generalization of what? I don’t think there was anything in that post that could be called a generalization except that fraud is hard to measure.

 

[ekricket]

- If you paid to improve the thing then you can expense it

Looks like @RivieraDanny refurbishing might become a little more worth it?

 

[DMack]

A generalization of what? I don’t think there was anything in that post that could be called a generalization except that fraud is hard to measure.

Your quote, “whatever stats you may have to support your thesis that fraud isn't common for rich people is i'm sure even shakier.”

Seriously?!?! Just seriously?!?!

 

[Budha]

Please don't set of a LLC / SubS / C corp and think you are being "smart". You will open yourself to all sorts of problems, obligations and new expenses. Making up lies on your tax return is dumb and for what purpose?

Selling $5,000 worth of used stuff you bought new isn't going to have a tax liability unless the used stuff is somehow more valuable than it cost when it was new. Make a reasonable estimate of the purchase price paired with the price you got on eBay. Lost money almost for sure - no taxes owed and easily put to rest.

No one said anything about making up lies on tax returns - lol. I was being sarcastic about starting a chip business, but the truth is our accountant and attorney have been advising us to do something like this for years based on our situation and current tax position (burden). Sometimes, the whole idea IS to create new expenses…. LoL.

Rest assured, we are not without professional guidance on these matters - lol.

Whether this makes sense or is a “smart” thing to do depends solely on individual circumstances and their tax position.

Edit: You are correct in that it is work to do it correctly. I am lazy, so for now, I value the free time I have more then benefit I would gain.

 

[Stufflymcstuff]

Your quote, “whatever stats you may have to support your thesis that fraud isn't common for rich people is i'm sure even shakier.”

Seriously?!?! Just seriously?!?!

He posted stats/claims on other issues that are clearly way way off, and theyre things that are easy to measure and easily verified through a simple google search.

And you think think we should have confidence in whatever stats he pulls out of his ass wrt something much more difficult to measure and harder to interpret?

Nowhere did I say that all or most wealthy people commit fraud or do underhanded things.

 

[FDLmold]

Did you know you can pay your children through a business and not only is that a business expense, but the income to a certain level ($10k I think) is tax free? I have friends with a business and an accountant and they do this yearly. Obviously check with a CPA, but if you regularly clean chips and have kids, have them help with the cleaning and pay them. Gawd our tax code is so ridiculous. I'm literally spending time figuring out how to report on my taxes a Millennium Falcon I got for Christmas in 1983 that I could sell for $300-400.

 

[DoubleEagle]

So when we file our taxes it will have sections to fill out with those expenses when entering the 1099-k? Sorry for noob questions I never had a 1099-k

On a Schedule C

 

[navels]

mfw someone on pcf says "100 millionaires" meaning people who make 100 million a year and there ensues some arguing about whether there are 100 "millionaires".

 

[FDLmold]

mfw someone on pcf says "100 millionaires" meaning people who make 100 million a year and there ensues some arguing about whether there are 100 "millionaires".

Technically, proper use of a dash would fix this. There is a difference between 100-millionaires and 100 millionaires.

 

[Stufflymcstuff]

The original statement is ambiguous but the follow up by hardinghouse was clearly addressing it as 100 individuals who are millionaires.

You don't think there are 100 millionaires in the USA? There are 100+ millionaires on this site alone, without question.

“Sure of course
100 on this site might be a stretch maybe”

There are likely several who have posted in this thread.

 

[davin]

Will a 1099-k be sent out on F&f transactions?

 

[nezara]

Will a 1099-k be sent out on F&f transactions?

My understanding is not at this time. However the build back better plan in the past has included different proposals in terms of inflow monitoring. If it passes in 2022 it's possible unreported transactions over a certain size could be subject to scrutiny. One proposal was $600 but there has been others

 

[navels]

The original statement is ambiguous but the follow up by hardinghouse was clearly addressing it as 100 individuals who are millionaires.

I don't find this ambiguous at all, but ymmv: "Again if you up the tax on the billionaires to peak stupid you aren’t going to accomplish much. There aren’t that many or 100 millionaires."

 

[DrStrange]

Schedule C is for self-employment income. Keep in mind that Schedule C income also gets hit with the 15.3% social security / Medicare tax on top of the normal income tax.

Most of us would report the sale of chips or something similar on schedule D - for capital gains and losses.

 

[behrguitar]

I agree this is not great news for sellers, but to be clear this is a measure to collect taxes owed already, not a measure to institute a new/higher tax. In other words, sellers have always owed taxes on these sales but now the platforms hosting these sellers have a more rigorous requirement to report.

This is wrong. Say you frequently trade chips… if I buy a rack for $1000 and a year later sell it for $1000, I’m going to pay taxes at my tax bracket on the $1000 even though no profit was made. Simply that I didn’t have proof of my cost basis.

 

[behrguitar]

While I think it was already said, people need to remember that this change in the law does not change the taxes you owe by a single cent. It only changes reporting requirements on sales income processed via third party transaction services like PayPal.

I think a reporting threshold of $600 is unreasonably low, and it's going to be extra paperwork for a lot of people. But $20,000 was too high, and a lot of people took advantage of that to avoid paying taxes that they owed.

Feels like a happy medium would be somewhere in the $2-5K neighborhood. High enough to allow some relief for hobby sellers, low enough that it's much tougher to skirt self-employment taxes.

And now a lot of extra paperwork if you buy and sell chips to keep track of your cost basis… frequently I buy some chips and then sell them at the same price I bough them. No profit made. It screws is all like the double taxation every time you sell a car… even though you payed tax when you bought it… the buyer again pays tax at the depreciated value.

Track… track track all the $$$ you spend on chips so the IRS doesn’t assume that all the chips you sell are pure profit.

Way to go voters who know nothing about finance.

 

[philhut]

This is wrong. Say you frequently trade chips… if I buy a rack for $1000 and a year later sell it for $1000, I’m going to pay taxes at my tax bracket on the $1000 even though no profit was made. Simply that I didn’t have proof of my cost basis.

This is why those making such insane polices also so desperately want to eliminate cash currency. Every digital transaction can be tallied and therefore taxed....you swapping pieces of paper/synthetic labeled bills or bullion is much more difficult to harvest the tyrants share.

 

[dajebriza]

The amount of money the IRS is going to rake in from those who did not keep records, don't understand the law, or just give up and pay the bill the IRS auto-sends them based on paypal/eBay etc reporting is going to be huge. The govt does not care about the legitimacy of these taxes, they have specifically targetted a new taxable income source that has no choice but to pay whatever the IRS says is owed.

 

[doublebooyah85]

The amount of money the IRS is going to rake in from those who did not keep records, don't understand the law, or just give up and pay the bill the IRS auto-sends them based on paypal/eBay etc reporting is going to be huge. The govt does not care about the legitimacy of these taxes, they have specifically targetted a new taxable income source that has no choice but to pay whatever the IRS says is owed.

Wasn't this delayed so it was a non issue in 2022? Hopefully the same for 2023?

 

[dajebriza]

Wasn't this delayed so it was a non issue in 2022? Hopefully the same for 2023?

It's supposed to start this year, so all your sales in 2023 will receive IRS reporting. Every year they delay it is a lot of lost revenue so we will see if they delay it again.

 

[doublebooyah85]

It's supposed to start this year, so all your sales in 2023 will receive IRS reporting. Every year they delay it is a lot of lost revenue so we will see if they delay it again.

Friends and family should be safe?

I think this administration and frankly most govt can’t get shit passed so hopefully it’s delayed again. I’m pretty much done buying and selling!