Question about Account and Tax

[jokone_5]

Hello,

I am looking for advice in regards to selling on ebay. I have my own personal ebay account that I use for the occasional sale. I am helping my uncle sell his collection of scale model trucks and have a few questions regarding it. Currently I have listed trucks on my account to sell them but have heard that if you sell alot youll receive a 1099 if you sell over 200. I do not want that linked to me, but rather my uncle since there will definitely be over 200. Should we have an eBay account set up for him with a corresponding pay-pal account and deposit that into his bank account? This is not a business, he just has alot to sell so it looks like a business but is not. 

the main takeaway is that I do not want to be linked at all to this account, im just taking the pictures for him. I wouldnt be linked by my IP address or anything right?

I appreciate anyones time reading this and helping. Thanks!

[nobody*s_perfect]

The 1099-K would be based on payments received, so if the money is going to your uncle then the simplest strategy would have the payments go straight from the buyers into your uncle's PayPal account. Even better if he has his own  eBay account, too, although your accounts will inevitably be linked if you are using your computer do to any work on his account.

[jokone_5]

when you say linked, do you mean I would be on the hook for the 1099 aswell? Could I use my ebay account still and just route everything to his paypal? 

also, if we are selling items that he has had for years, for technically no “profit”, but the original purchase price is unknown, how would you deduct the cost of the item that he paid when he got it originally. 

thank you. 

[fashunu4eeuh]

Hi here is the link to eBay’s help pages in regards to the 1099-k. To receive one, generally speaking the threshold are these, both criteria must be met:

• You received more than $20,000 in gross payments from the sale of your items.
• You had more than 200 payment transactions.

You are wise to separate your account from his, as the owner of the items will need to pay income tax on his eBay funds.

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

[nobody*s_perfect]

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@jokone_5 wrote:

when you say linked, do you mean I would be on the hook for the 1099 aswell? Could I use my ebay account still and just route everything to his paypal? .... 

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PayPal issues 1099-K's based on the total dollar value and number of transactions that are associated with a specific social security number.  if payments are sent directly to his account, then they will not be on your tax record relative to the IRS.

[buyselljack2016]

You can have the payments go to his PP account, but all the eBay selling fees will be charged to the account that the items are listed/selling on.

[mam98031]

The cleanest way to do this is set up another account on Ebay under your uncle's name and contact info as the primary.  As long as your uncle is willing to give you his password to the account, you can run the account and post listings as needed.

Also set up a PP account under your uncle's name and information.  Again, he could give you the password so you can access it as needed.

It is best to keep this completely separate from your account on Ebay and in PP.  While you could do it, it becomes complicated and there are much easier ways to do it as I described above.

The other poster that referenced that Ebay may link the accounts.  All that means is that Ebay can tell when multiple accounts have the same IP address and possibly other factors.  Ebay will typically link those accounts.  If one account gets into serious trouble with Ebay, they can sanction your account too because you are family and/or linked.  But under no circumstances does the sales of one account transfer to another.  What sells under your Uncle's account would remain there.

You also need to be prepared that Ebay in the coming months will switch most sellers over to the Managed Payment program.  Things will just be much easier to account for if you keep your sales and your uncle's completely separate with separate accounts.

If you already have some sales that have happened under your account I can help you with how to properly account for those if you want.  

[luckythewinner]

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@jokone_5 wrote:

This is not a business, he just has alot to sell so it looks like a business but is not. 

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Taxable income is taxable income. 

The IRS makes that decision, regardless of whether you consider it to be a "business" or not. 

[janet9988]

Selling income always needs to be reported......even when you do not receive the 1099.