12-02-2021 09:09 AM
I sell mostly used clothes on ebay. These are clothes that my family has worn and I sell at a loss. The majority of these clothes I do not have receipts for. How will this work moving forward when sales are reported? Will the IRS accept my report that I made no money on these without proof? I don't understand how this will work for the non-business people on here without getting screwed.
12-02-2021 09:11 AM
Talk to an accountant. There are ways to handle this.
12-02-2021 10:36 AM
If you are selling everything at a loss, then the IRS considers you to be a 'hobby seller" rather than a business. This means that your eBay income goes straight onto line 8 of your 1040, with no opportunity to deduct the original purchase price nor any other expenses. Read these two pages from IRS and then talk to an actual tax accountant:
https://www.irs.gov/faqs/small-business-self-employed-other-business/income-expenses/income-expenses
12-02-2021 10:44 AM
is this income actual income? Not at all. They made a transaction that left them with nothing. Man these new rules are screwing normal people that just want to sell an old phone. Talk to an accountant??? How many people just selling an old item can afford an accountant.
12-02-2021 10:46 AM
Adulting is tough
12-02-2021 10:46 AM
Talk about carrying discussions to an extreme. There is a very good IRS help line that costs nothing.
12-02-2021 10:56 AM - edited 12-02-2021 10:57 AM
Decent people are going to get screwed by this bill along with the IRS. Terrible idea. $7500 would have been reasonable.
12-02-2021 10:57 AM
Start keeping receipts is probably the best answer here. The chance of getting audited is small, but if it happens the IRS will want proof that you didn't make a profit.
12-02-2021 11:00 AM - edited 12-02-2021 11:02 AM
Auditing is hella tough. I imagine the IRS is going to audit less than 1% this year. Hopefully not the people that are just trying to survive. Cause I know a few and they don't deserve it...
12-02-2021 11:15 AM - edited 12-02-2021 11:19 AM
@jda03121 wrote:Talk about carrying discussions to an extreme. There is a very good IRS help line that costs nothing.
I really wish the IRS would issue guidance explaining how to account for "yard sale" income that is reported via the 1099-K.
The only guidance they seem to have posted is explaining how to handle businesses income and what to do if you receive a 1099-K that was not correct.
Without any published guidance, I question whether the IRS help line will be much help.
12-02-2021 11:15 AM
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"I sell mostly used clothes on ebay. These are clothes that my family has worn and I sell at a loss. "
The IRS is smarter than this.
Proceed with caution.
12-02-2021 11:16 AM
@singular-source wrote:is this income actual income? Not at all. ..
You're allowed to have your own ideas about what is income, but if you get a 1099-K from eBay, then the IRS believes that's income.
12-02-2021 11:20 AM
If all these people had been reporting their income over the years, as they should have been, then this would not seem like a big deal. In fact, it may not have happened at all.
12-02-2021 11:22 AM - edited 12-02-2021 11:24 AM
@dogchow747 wrote:
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Leupold Vari-X IIc 3-9x40 Gloss Finish Rife Scope - Duplex $399.99
Bettinardi Mizuno Black Carbon BC7 Napa Style Putter - 34" - Rare - Mint $299.99
Gamehide Mathews Men's Grid Lock Fleece Jacket & Pant Set Lost Camo $214.99
"I sell mostly used clothes on ebay. These are clothes that my family has worn and I sell at a loss. "
The IRS is smarter than this.
Proceed with caution.
Yes, they are. And this is a public forum, where posters essentially admit they are not perhaps tracking/reporting.
This change cannot happen soon enough.
12-02-2021 11:38 AM
I've been doing this 20 some years and don't have any receipts or proof what I paid for the items back in the 70s through the 90s.
I just keep track of what I make and any expenses and claim it all on my income taxes.
Some people think just because you claim the income, you have to pay taxes on it, but you don't always.
It depends on how many expenses you can write off.