1099K and Payment Holds question

[mr_lincoln]

Does anyone know if Funds on hold past December 31st of one year are on that year's 1099K or are rolled over to the following year when they are released?

[onlinecentral]

A couple of years ago, I compared the detail within two years of reports and concluded that the funds were reported on the earlier year. My buyer ultimately did not receive a refund. A refund or lack thereof could affect the outcome someone else has, I suppose.

[mr_lincoln]

@onlinecentral 

Thank you ... I was reading a thread by a Seller who currently has over $ 4,000 on hold until January next year.  It got me thinking about how that is handled by the 1099K tabulation.  "On Hold" is not "Available" so "WHO" has possession of the money right?  eBay? Adyen? The Seller's account but just not accessible? 

Refunds are not included on the 1099K because they wind up being a deduction for tax reporting purposes. Per eBay's Help page: "...  This amount (1099K total) does not include any adjustments, for example, credits, discounts, fees, refunds, or any other adjustable amounts. ..."

I suspect that it goes on this year and not next year but it might be worth confirming.

[stainlessenginecovers]

What is on the 1099 is what Ayden has 'released' (deposited to you, even if your bank hasn't received yet).

Example- $500 sale on Dec 30- shows 'Processing/Pending' of $500 even still on Dec 31. 

At 2 in the morning on Jan 1- Ayden 'sent the deposit' for $500. 

That $500 is Not on 'this years' 1099. 

[monica-sells]

a couple years back on one smaller account, I did notice what @stainlessenginecovers  mentions

in that particular instance, my excel sheet makes entries by sales date and it did not match up with the 1099....

what DID match up was totalling the "Payout" totals....the discrepancies were the first couple days of January and the last few days of December. But, I had one larger sale that was "held" for 5 days on this newer account. I had it booked in December, but it was not included in the 1099 total. The payout was on the 2nd of Jan and it was on the next years 1099 even though it sold on the 23rd of December.

So, it may be safe to assume the "Payout" date (at ebay, not your bank) is the date of record.

[a_c_green]

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@monica-sells wrote:

So, it may be safe to assume the "Payout" date (at ebay, not your bank) is the date of record.

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I was actually leaning the other way while reading this - that it would not be on this year's 1099 since the seller had not actually received the funds yet - but I suppose that since eBay/Adyen recognize the funds as "yours" even though you have not technically received them in your account, they would be counted as your income for the current year from a sale that occurred in the current year. (In other words, the only reason that you don't have the money in your account already is because they're holding it for a while, but it's still your money.)

[mr_lincoln]

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@monica-sells wrote:

a couple years back on one smaller account, I did notice what @stainlessenginecovers  mentions

in that particular instance, my excel sheet makes entries by sales date and it did not match up with the 1099....

what DID match up was totalling the "Payout" totals....the discrepancies were the first couple days of January and the last few days of December. But, I had one larger sale that was "held" for 5 days on this newer account. I had it booked in December, but it was not included in the 1099 total. The payout was on the 2nd of Jan and it was on the next years 1099 even though it sold on the 23rd of December.

So, it may be safe to assume the "Payout" date (at ebay, not your bank) is the date of record.

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@monica-sells 

Thank you and I seem to recall there is a period of time near the end of December where transactions might get pushed to the next year for 1099K reporting ... just don't recall where I read that.   I am just wondering what the "Hold" situation is with where the money is in relation to the Seller's account.

[mr_lincoln]

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@a_c_green wrote:

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@monica-sells wrote:

So, it may be safe to assume the "Payout" date (at ebay, not your bank) is the date of record.

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I was actually leaning the other way while reading this - that it would not be on this year's 1099 since the seller had not actually received the funds yet - but I suppose that since eBay/Adyen recognize the funds as "yours" even though you have not technically received them in your account, they would be counted as your income for the current year from a sale that occurred in the current year. (In other words, the only reason that you don't have the money in your account already is because they're holding it for a while, but it's still your money.)

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@a_c_green 

I know from a business standpoint if I write a check to a vendor in late December I record it for this year as spent but that check may not get cashed and the money actually transferred until the following year.  Granted that is a little different scenario but the company, via the check, shows the money is gone.

[monica-sells]

It could have been coincidence too....all I know is I was reconciling my account(s), and I only get 1 1099 for all of them. I was able to pin it down to 1 number, and it matched that "hold" number on the smaller account.

So, it is only a theory, and in all reality, in general accounting principles, I believe it should be the date of availability, not the date of the payout.

[a_c_green]

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@monica-sells wrote:

It could have been coincidence too....all I know is I was reconciling my account(s), and I only get 1 1099 for all of them. I was able to pin it down to 1 number, and it matched that "hold" number on the smaller account.

So, it is only a theory, and in all reality, in general accounting principles, I believe it should be the date of availability, not the date of the payout.

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Speaking for myself, I can rationalize it either way, which means I have no idea which is correct as I cannot even convince myself. 😃

I could have sworn that one of the eBay Community reps gave a solid answer to this question last year or the year before (or maybe they have to answer this every year), but of course I cannot remember what they said now.

[monroe67]

"So, it is only a theory, and in all reality, in general accounting principles, I believe it should be the date of availability, not the date of the payout."

Also, a-c-green posted:  "In other words, the only reason that you don't have the money in your account already is because they're holding it for a while, but it's still your money."

Here's a cut-and-paste from eBay's Help pages about Form 1099-K.  I've highlighted one sentence that I believe supports the two statements quoted above.   

[Start of quote]

What's included in Form 1099-K

Form 1099-K is an IRS information return that includes the gross amount of all reportable payments within a calendar year. This is based on when gross funds are processed to eBay, not necessarily when funds are received by sellers. This amount does not include any adjustments, for example, credits, discounts, fees, refunds, or any other adjustable amounts. However, sales tax and canceled transactions are excluded from the gross amount reported. You should check with your tax advisor to decide how best to use the information on your Form 1099-K when filing your personal and/or business income tax return.

[End of quote]