Redemption

[rosemary6525]

We is redeemed  IRS going back to OLD TIMES   how many of u are glad???????????????

[gloryglorygifts]

I know someone dealing with back taxes now, with the IRS and the state, and those fees can be quite substantial and compounded.  Just from not filing taxes, period, with no side business. They WILL come after you when you least expect it and probably at the worst time possible in your financial and personal life. Karma. 

[estate_echoes]

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@bonanza125 wrote:

"More importantly millions of sellers are selling items they personally used, which is often done at a loss.

Which generally does not need to be reported.

This gets lost here on the boards due to bad advice. Which is often given by people who are incorrectly accounting for  this as business transactions instead of disposition of personal assets."

Personal items still need to be reported. All income needs to be reported. Now if there is a loss then you take the proper deductions.  Ebay is not a yard sale. It is a marketplace platform. You are considered a business doing business transactions. If you don't report then that's on you but if the IRS audits you cause of money in your account you better have all your paperwork ready. 

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You are not considered a business doing business transactions by simply selling on ebay.

You cant deduct losses on sales if personal items.

Where are you getting this bad info from? 

[gloryglorygifts]

You are if you have a business account with a EIN, I'm sure. 

[doc-holmes]

I asked AI this question:

Do you need to report sales of personal items to the IRS if sold at a loss in the USA?

And here's the answer.

"In the USA, you generally do not need to report the sale of personal items to the IRS if you sell them at a loss.

​Here's a breakdown of the key IRS rules and considerations:

​Non-Deductible Losses: Losses from the sale of personal-use property are not deductible. This means you can't use the loss to offset other income or gains on your tax return.

​Defining "Personal-Use Property": This includes items like your car, furniture, household appliances, clothing, and other assets that are not used for business or investment purposes.

​Reporting Gains: The opposite is true if you sell a personal item for a profit (a "gain"). If you sell a personal item for more than you paid for it, that profit is considered a capital gain and is generally taxable. You would need to report this on your tax return.

​When a Form 1099-K is Issued: In some cases, if you sell items through an online marketplace or payment app, you might receive a Form 1099-K. This form reports the gross proceeds from your sales. If you sold items at a loss but received a 1099-K, you may need to report the transaction on your tax return to show that there was no taxable gain. The goal is to "zero out" the reported income so you don't end up paying taxes on a transaction where you didn't make a profit. The IRS and tax software companies have specific instructions on how to do this, often involving an offsetting entry on a form like Schedule 1."

To me, it certainly sounds like if you bought a coffee maker for $100, and sold it on eBay for $25, that doesn't need to be reported. 

[estate_echoes]

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@bonanza125 wrote:

@estate_echoes 

"Lots of people on ebay can have up to $19,999 worth if sales and don't need to report. Not sure why this is so hard to understand. 

If Sally sells her car on ebay for $19k, when she paid originally paid $40k she does not need to report it."

Your comment is just not true. Hopefully you don't get audited. DMV still reports the sale of your car. If you have $19K in your account you will need to report to the IRS the loss you took on it. If you think people can just get away without paying taxes eventually the IRS catches up to them. Tax evasion. 

 Um.... The loss is not deductible... if you report the loss you are in essence evading taxes.

This is pretty basic stuff which can be easily researched. But I understand if you get your information from these forums why you would be so confused. 

[doc-holmes]

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@estate_echoes wrote:

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@bonanza125 wrote:

@estate_echoes 

"Lots of people on ebay can have up to $19,999 worth if sales and don't need to report. Not sure why this is so hard to understand. 

If Sally sells her car on ebay for $19k, when she paid originally paid $40k she does not need to report it."

Your comment is just not true. Hopefully you don't get audited. DMV still reports the sale of your car. If you have $19K in your account you will need to report to the IRS the loss you took on it. If you think people can just get away without paying taxes eventually the IRS catches up to them. Tax evasion. 

 Um.... The loss is not deductible... if you report the loss you are in essence evading taxes.

This is pretty basic stuff which can be easily researched. But I understand if you get your information from these forums why you would be so confused. 

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From what I found, this is 100% correct. Unless AI lied to me. Wouldn't be the first time. 

[mam98031]

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@estate_echoes wrote:

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@bonanza125 wrote:

"More importantly millions of sellers are selling items they personally used, which is often done at a loss.

Which generally does not need to be reported.

This gets lost here on the boards due to bad advice. Which is often given by people who are incorrectly accounting for  this as business transactions instead of disposition of personal assets."

Personal items still need to be reported. All income needs to be reported. Now if there is a loss then you take the proper deductions.  Ebay is not a yard sale. It is a marketplace platform. You are considered a business doing business transactions. If you don't report then that's on you but if the IRS audits you cause of money in your account you better have all your paperwork ready. 

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You are not considered a business doing business transactions by simply selling on ebay.

You cant deduct losses on sales if personal items.

Where are you getting this bad info from? 

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Likely the IRS.  Which is the agency that has the laws and rules in which we should follow instead of any advice given here.  

IRS clearly states in the rules that you can NOT deduct losses on sales of personal items.

The term business generally includes any activity carried on for the production of income from selling goods or performing services.  If you buy anything for resale, whether it is used or new, you have a little business.

https://sellerledger.com/ebay-1099k-guide/

https://community.ebay.com/t5/Announcements/eBay-and-TaxAct-partner-to-help-you-navigate-new-Form-10...

https://www.irs.gov/faqs/small-business-self-employed-other-business/income-expenses/income-expenses

https://www.irs.gov/businesses/gig-economy-tax-center

https://pages.ebay.com/seller-center/service-and-payments/2022-changes-to-ebay-and-your-1099-k.html

https://www.irs.gov/pub/taxpros/fs-2022-41.pdf

https://www.kiplinger.com/taxes/irs-free-file

[mam98031]

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@gloryglorygifts wrote:

You are if you have a business account with a EIN, I'm sure. 

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That isn't a requirement.  I've been a sole proprietorship since the day I started selling.  I am a business and I do have a state business license.

[estate_echoes]

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@mam98031 wrote:

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@estate_echoes wrote:

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@bonanza125 wrote:

"More importantly millions of sellers are selling items they personally used, which is often done at a loss.

Which generally does not need to be reported.

This gets lost here on the boards due to bad advice. Which is often given by people who are incorrectly accounting for  this as business transactions instead of disposition of personal assets."

Personal items still need to be reported. All income needs to be reported. Now if there is a loss then you take the proper deductions.  Ebay is not a yard sale. It is a marketplace platform. You are considered a business doing business transactions. If you don't report then that's on you but if the IRS audits you cause of money in your account you better have all your paperwork ready. 

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You are not considered a business doing business transactions by simply selling on ebay.

You cant deduct losses on sales if personal items.

Where are you getting this bad info from? 

---

Likely the IRS.  Which is the agency that has the laws and rules in which we should follow instead of any advice given here.  

IRS clearly states in the rules that you can NOT deduct losses on sales of personal items.

The term business generally includes any activity carried on for the production of income from selling goods or performing services.  If you buy anything for resale, whether it is used or new, you have a little business.

https://sellerledger.com/ebay-1099k-guide/

https://community.ebay.com/t5/Announcements/eBay-and-TaxAct-partner-to-help-you-navigate-new-Form-10...

https://www.irs.gov/faqs/small-business-self-employed-other-business/income-expenses/income-expenses

https://www.irs.gov/businesses/gig-economy-tax-center

https://pages.ebay.com/seller-center/service-and-payments/2022-changes-to-ebay-and-your-1099-k.html

https://www.irs.gov/pub/taxpros/fs-2022-41.pdf

https://www.kiplinger.com/taxes/irs-free-file

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As usual you aren't following the conversation. 

I would use the IRS definition of a "business" and focus on the word "profit" and try to understand the how a loss is not profit. I should mention that we are talking about sales of personally used items, not items purchased for "resale".  

[gloryglorygifts]

You are not considered a business doing business transactions by simply selling on ebay.

So you are saying that ebay doesn't consider a business account with an EIN a business? 

[estate_echoes]

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@mam98031 wrote:

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@estate_echoes wrote:

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@mam98031 wrote:

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@rosemary6525 wrote:

We is redeemed  IRS going back to OLD TIMES   how many of u are glad???????????????

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@rosemary6525 

Mostly those that don't understand how the form actually works or that with or without the form you need to report your income to the IRS.  But this is something you should know backwards and forwards by now as over the last couple of years you have started a handful of threads on the subject.  

Are you of the option that you can get up to $19,999 worth of sales on Ebay that you do not have to report to IRS?

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Lots of people on ebay can have up to $19,999 worth if sales and don't need to report. Not sure why this is so hard to understand. 

If Sally sells her car on ebay for $19k, when she paid originally paid $40k she does not need to report it. 

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Not a soul brought up cars or selling cars on this thread.  No one but you.  Car sales it different and I suspect you know that but are trying to make some point with it that has nothing to do with the discussion here.  There are specific rules that guide auto sales.  Nothing I've discussed here.

If you get a 1099K, you are suppose to report it on your income taxes.  Whether or not you made a profit is a different question.  The 1099K is an informational form created by the IRS.  True that not all of that may be taxable income, but the person receiving the form must report it on their federal return.

I realize you are just wanting to be argumentative.

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Lets ignore the false assertion or confusion that there are some kind special reporting rules for cars.... and pick any other personal asset to make this easier for you. Maybe a Hot tub, wedding ring... you pick. If for some unknown reason it has to be something that was previously mentioned, we can go with underwear. The scenario is still true. 

Ironically there has never been any argument on whether or not one must report when issued a 1099-k, why you made one is beyond me... but I agree with you on that.

[estate_echoes]

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@doc-holmes wrote:

I asked AI this question:

Do you need to report sales of personal items to the IRS if sold at a loss in the USA?

And here's the answer.

"In the USA, you generally do not need to report the sale of personal items to the IRS if you sell them at a loss.

​Here's a breakdown of the key IRS rules and considerations:

​Non-Deductible Losses: Losses from the sale of personal-use property are not deductible. This means you can't use the loss to offset other income or gains on your tax return.

​Defining "Personal-Use Property": This includes items like your car, furniture, household appliances, clothing, and other assets that are not used for business or investment purposes.

​Reporting Gains: The opposite is true if you sell a personal item for a profit (a "gain"). If you sell a personal item for more than you paid for it, that profit is considered a capital gain and is generally taxable. You would need to report this on your tax return.

​When a Form 1099-K is Issued: In some cases, if you sell items through an online marketplace or payment app, you might receive a Form 1099-K. This form reports the gross proceeds from your sales. If you sold items at a loss but received a 1099-K, you may need to report the transaction on your tax return to show that there was no taxable gain. The goal is to "zero out" the reported income so you don't end up paying taxes on a transaction where you didn't make a profit. The IRS and tax software companies have specific instructions on how to do this, often involving an offsetting entry on a form like Schedule 1."

To me, it certainly sounds like if you bought a coffee maker for $100, and sold it on eBay for $25, that doesn't need to be reported.

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With AI, use it more for the sources it provides, and verify what it says. In this case you may find Accountants and the IRS repeating the same information.

That said, I believe Bonanza may have fallen victim to the vast amount of misinfo spread in these forums such as that spread those calling themself a "mentor". Hopefully they come back and learn... far too often in these situations people run off to repeat false claims elsewhere. 

[roccotacodad54]

   She just translated it for us..........LOL.

[tools*]

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@pickapaper wrote:

@rosemary6525  wrote:  "'The new threshold saves someone bunch time of going thru tiny sales, of which, 90% of the sales resulted in losses."

If "someone" is selling and 90% of their sales resulted in losses, then something is wrong somewhere.  Why would anyone put the time and effort into selling if they are losing money on nine out of 10 of their sales?

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For some people, it's about recovering a chunk of the money they spent on things over the years. It's more about survival than a business plan.

[bonanza125]

"You are not considered a business doing business transactions by simply selling on ebay."

Actually yes you are. Ebay has all information needed for IRS including bank account.  Just because Ebay doesn't send a 1099 doesn't mean you don't have to report your income. You still do. 

"You cant deduct losses on sales if personal items."

Well you still need to report it. If not it's a transaction linked to your bank account. IRS can see that. If you can't prove the losses then it's considered a profit then.  

"Where are you getting this bad info from?"

My advice is not bad. It's facts coming from the IRS themselves and my accountant. You are an individual who chooses more than likely not report personal stuff on your taxes. Guess what the IRS can still see your income. Good luck with that.