1099-K

[benn46]

Beginning in the year 2022, ebay will issue 1099-k forms to sellers who accumulate more than 600.00 worth of sales for the year 2022.  So here's my question:

If I list an item on ebay that sells for $1,000.00 and is paid for by the buyer on December 26, 2021, but is delivered and received in January of 2022 so that the funds from the sale are not deposited into my account until January of 2022, -- is that sale charged to my 2021 sales or to my 2022 sales?

No guesses, no matter how educated or reasonable.  I'm looking for the right answer.

Thanks in advance.

[eleanor*rigby]

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@benn46 wrote:

No guesses, no matter how educated or reasonable.  I'm looking for the right answer.

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You know what they say about free advice. Contact a tax professional. 

[releasethekraken_1]

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@eleanor*rigby wrote:

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@benn46 wrote:

No guesses, no matter how educated or reasonable.  I'm looking for the right answer.

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You know what they say about free advice. Contact a tax professional. 

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You’ll need to ask the entity that will be issuing the document, i.e. eBay, since I don’t believe they’ve issued any policy statement that would be relevant to the question.

[benn46]

Good idea.  How do I ask ebay?

[eleanor*rigby]

@releasethekraken_1 wrote:

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@eleanor*rigby wrote:

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@benn46 wrote:

No guesses, no matter how educated or reasonable.  I'm looking for the right answer.

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You know what they say about free advice. Contact a tax professional. 

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You’ll need to ask the entity that will be issuing the document, i.e. eBay, since I don’t believe they’ve issued any policy statement that would be relevant to the question.

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So you don't think a tax professional would be aware of in which tax year income from a sales transaction is booked? You think every company responsible for issuing a 1099-K does it differently? Like, maybe they just pick randomly among the several options? You don't think there are any GAAP rules that apply? No standardization?

Uh, okay . . . 🙄

@benn46 

And that, my friend, is why you need to contact a tax professional rather than getting free "advice" from strangers on a public discussion board.

[releasethekraken_1]

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@eleanor*rigby wrote:

@releasethekraken_1 wrote:

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@eleanor*rigby wrote:

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@benn46 wrote:

No guesses, no matter how educated or reasonable.  I'm looking for the right answer.

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You know what they say about free advice. Contact a tax professional. 

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You’ll need to ask the entity that will be issuing the document, i.e. eBay, since I don’t believe they’ve issued any policy statement that would be relevant to the question.

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So you don't think a tax professional would be aware of in which tax year income from a sales transaction is booked? You think every company responsible for issuing a 1099-K does it differently? Like, maybe they just pick randomly among the several options? You don't think there are any GAAP rules that apply? No standardization?

Uh, okay . . . 🙄

@benn46 

And that, my friend, is why you need to contact a tax professional rather than getting free "advice" from strangers on a public discussion board.

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So when does eBay record the seller as having received the money? When the buyer pays? The seller doesn’t have the money yet. When Adyen initiates the transfer? When the money gets to the seller’s bank account?

No, I wouldn’t expect a tax accountant to know, WITH CERTAINTY, how eBay/Adyen would handle this. All the tax accountant cares about are the numbers on the 1099k, because that’s what they have to work with.

[dhbookds]

Law hasn't been passed yet and scuttlebutt seems to be it may be changed......

[tdumonde2014]

The 1099K law that lowers the threshold to $600.00 has passed and is now the law of the land. The proposed law that the transactions of $600.00 be tracked is still being debated.

[jayjaspersgarage]

The answer is it doesn't matter because you should be reporting the gross on-line sales less expenses every year regardless of the amount.

This is where the trouble is for most sellers who get their first 1099K at the end of 2022.  The IRS is going to 'look back' ten years and ask ebay and any other on-line platforms you have sold with for all your sales records since 2012 and discover who has been honest and who has not.

 There will be more penalties than during a TRaider game once 2022 is over.

[benn46]

It does matter and we do report.  But the question is -- in which year is a specific transaction 1099'ed?  The year in which the item is purchased and paid for or the year in which the funds from the sale are deposited in the seller's bank account?

[eleanor*rigby]

Oh, good grief. 

For the last time, eBay/Ayden don't get to choose how they "handle" this. All of these decisions are covered by GAAP and/or FASB standards.

Please don't muddy the waters with a bunch of speculation that's already established by long-standing accounting principles. Just because posters on this board don't know the answer doesn't mean a tax professional doesn't. Tax professionals are highly trained and go through rigorous annual continuing education concerning the standards required for reporting income. Posters on this board are guessing or Googling.

@benn46 

Is it clear to you yet that you should contact a tax professional? What else will it take to convince you?

[richard1rst]

OK I'm not a CPA but I do have a degree in accounting.

Income is booked the day it is EARNED, If I make a sale in December but I do not physically receive the funds until January the sale is considered to be made in December.

The bookkeeping entry in December would be

(debit) Accounts receivable, (credit) Sales

The when the money is actually received the bookkeeping entry in January would be

(debit) Cash, (credit) Accounts receivable.

[mam98031]

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@benn46 wrote:

Beginning in the year 2022, ebay will issue 1099-k forms to sellers who accumulate more than 600.00 worth of sales for the year 2022.  So here's my question:

If I list an item on ebay that sells for $1,000.00 and is paid for by the buyer on December 26, 2021, but is delivered and received in January of 2022 so that the funds from the sale are not deposited into my account until January of 2022, -- is that sale charged to my 2021 sales or to my 2022 sales?

No guesses, no matter how educated or reasonable.  I'm looking for the right answer.

Thanks in advance.

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This is an easy one.  1099K has NOTHING to do with when a buyer receives anything.

But here is the tricky thing about Ebay's 1099K.  Ebay is the ONLY site that puts the info on our 1099Ks by the PAYOUT date.  Every other site that has a money processing system and PayPal all do them by when the transaction happened.  Ebay is doing it differently.

So I'd stay current on any chances to the way Ebay does the 1099K because there are plenty of us that are trying to get Ebay to do this by transaction date and not payout date.  They aren't following any rule but a self imposed one.

https://www.ebay.com/help/selling/fees-credits-invoices/ebay-form-1099k?id=4794

FYI, the policy page is silent on the fact that they 1099K is based off of Payout dates.  Some of us are also trying to get Ebay to change that too.

[mam98031]

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@eleanor*rigby wrote:

@releasethekraken_1 wrote:

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@eleanor*rigby wrote:

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@benn46 wrote:

No guesses, no matter how educated or reasonable.  I'm looking for the right answer.

---

You know what they say about free advice. Contact a tax professional. 

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You’ll need to ask the entity that will be issuing the document, i.e. eBay, since I don’t believe they’ve issued any policy statement that would be relevant to the question.

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So you don't think a tax professional would be aware of in which tax year income from a sales transaction is booked? You think every company responsible for issuing a 1099-K does it differently? Like, maybe they just pick randomly among the several options? You don't think there are any GAAP rules that apply? No standardization?

Uh, okay . . . 🙄

@benn46 

And that, my friend, is why you need to contact a tax professional rather than getting free "advice" from strangers on a public discussion board.

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A Tax professional can not answer these questions because Ebay does theirs differently than anyone else.  The tax professional, unless they handled one in past years for Ebay sellers would not know that Ebay goes by payout date for 1099Ks.  

[mam98031]

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@tdumonde2014 wrote:

The 1099K law that lowers the threshold to $600.00 has passed and is now the law of the land. The proposed law that the transactions of $600.00 be tracked is still being debated.

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What I highlighted has to do with banking transactions.  It has absolutely nothing to do with 1099Ks.

@tdumonde2014