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.

[mam98031]

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@jayjaspersgarage wrote:

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.

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@jayjaspersgarage 

It does matter and it is important to know how Ebay handles this because the sellers still need to reconcile and balance the 1099Ks they get.  Since Ebay doesn't their differently than anyone one else does, unless you know that they do it by Payout date NOT transaction date, you will waste all kinds of time and get very frustrated trying to balance the report.

[mam98031]

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@eleanor*rigby wrote:

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?

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@eleanor*rigby 

Ebay is technically doing it correctly, well sort of.  Just differently than any other site does.  Ebay does not use the transaction date like all the other sites I sell on do, they use the Payout date like no other site I'm aware of does.  And Ebay does not put sales tax on the 1099K, but other sites do.

This is something they have decided not to do as other similar sites do.  They are again marching to their own drummer and it gets really confusing.

[px_455]

Looks like there ain't but one way to find out.

Well, two...

The first one being to contact a CPA.

The second, trial and error.

I don't have to tell you which one most of us will be choosing.

[dhbookds]

Just for info............  if I get a check for 2021 interest/dividend.......but don't actually receive or deposit it until  Jan 2022.........it's reported for 2021.........for both me and the issuing entity.........

[dnasilver]

First eBay will not be issuing 1099's under the reporting guidelines in 2022. They will be issued in Jan/February 2023 for the tax year 2022.

Second, depending on the accounting methods you have been using would answer the question. Without knowing what method you have been using, it is impossible to give an accurate answer to your question.

Third, you might want to contact a CPA to help you. The last thing you want is an audit because ignorance of the laws and acceptable accounting practices is not a defense to an audit.

[dnasilver]

lol bingo I tried to be less snarky though. Sometimes I succeed and sometime not.

[dnasilver]

The IRS does not have any where near the employees need to do what you state. Where did you come up with 10 years?

[dnasilver]

How about comparing your 1099 to your sales records and then you will know. That would be the easiest. Otherwise your asking a question no one can answer with 100% certainty.

Time zones could adjust what one person receives versus another. If you are a legal business your fiscal year may not be a calendar year, which means you best be using accepted accounting practices.. 

You might want to get a CPA to insure you have been using accepted accounting practices and review what you have filed in previous years.

I would suggest spending a few hundred to talk with a Tax Lawyer before you end up scrambling to hire one.

[dnasilver]

I don't believe I am guessing and based on what you have stated you are not guessing either. The missing unknown link will be what is Adyen's cut off date vs eBay's cut off date vs the 1099 receivers fiscal year. Times zones do matter. 

[dnasilver]

If eBay is not following GAAP, eBay will show up on the IRS radar beaming because of all the CPA's who have filed changes to eBay's 1099. 

[jayjaspersgarage]

"The IRS does not have any where near the employees need to do what you state. Where did you come up with 10 years?"

Glad I got your attention.  It's in the tax code.  I looked it up last year when the questions started on here about people not filing over the years because they thought they could fly under the radar by selling less than 20K on multiple sites.  The IRS will be looking at those who truly made a living on-line by selling on multiple sites.  

I agree that they won't be pursuing every case.

[releasethekraken_1]

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@dnasilver wrote:

lol bingo I tried to be less snarky though. Sometimes I succeed and sometime not.

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But you’re also wrong, based on mam’s detailed response. Although I do appreciate your lack of snark. Not sure why the other poster thought it was necessary.

[releasethekraken_1]

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@dnasilver wrote:

First eBay will not be issuing 1099's under the reporting guidelines in 2022. They will be issued in Jan/February 2023 for the tax year 2022.

Second, depending on the accounting methods you have been using would answer the question. Without knowing what method you have been using, it is impossible to give an accurate answer to your question.

Third, you might want to contact a CPA to help you. The last thing you want is an audit because ignorance of the laws and acceptable accounting practices is not a defense to an audit.

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You’ve forgotten that eBay is already issuing 1099s under the CURRENT guidelines ($20k/200). So they have a procedure.. And eBay reports the income using their procedure regardless of what method the seller is doing.

[heckofagame]

If the buyer paid in 2021, it will be part of your 2021 income. The date of the sale, in this case the day the buyer paid, is the official transaction date. The transaction is with the buyer, not eBay. 

The same goes for retail. If you sell something to a customer and they pay with a credit/debit card, your processing company will deposit those funds within whatever time frame they make available, but your sale still took place the day the customer paid. 

[releasethekraken_1]

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@heckofagame wrote:

If the buyer paid in 2021, it will be part of your 2021 income. The date of the sale, in this case the day the buyer paid, is the official transaction date. The transaction is with the buyer, not eBay. 

The same goes for retail. If you sell something to a customer and they pay with a credit/debit card, your processing company will deposit those funds within whatever time frame they make available, but your sale still took place the day the customer paid. 

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And what if eBay treats it as a 2022 sale when the 1099k is issued? That's the actual question, not GAAP, not "when did the buyer pay you". It's "how will eBay handle it"? If they apply it to 2022, you're not going to be able to bully them into issuing a revised 1099k because you treat it as 2021 income.