mam98031 • Volunteer Community Member • Buyer/Seller since 1999
@blingfling123 wrote:
A 1099 is not sent for payments made to friends or family. If they pay the rent using F&F on any of the online services (which is pretty much what everyone in this situation is doing because of fees), no 1099 is created.
***Side Note for anyone watching thinking of switching to F&F to avoid the 1099 - using F&F for payments from sales to multiple different people is being watched and dealt with by all the payment processors.
A 1099K is not sent for payments made to friends or family.
What about a 1099-Misc
https://www.irs.gov/instructions/i1099mec
@rabites-n-chocobos wrote:If I sell an $800 video game that I bought in the 90's. Should I pay taxes on it?
It is unlikely. But you will still need to represent the income on your Federal Tax Return as clearly you have been selling off quite of few of your items and it will add up to over $600 in sales, so you will get a 1099K for the year.
So make sure you read up on the rules and learn about this subject. You have lots of time to learn so just take your time. You might start with Post # 44 & 68 on this thread as it has several links to information that will help you.
@stainlessenginecovers wrote:@dbfolks166mt EBay's goal is to shed the paperwork, overhead and costs to their bottom line that is required because of the change
Although eBay isn't the one having to issue anything; Adyen is.
My thinking is the only reason eBay is fighting it is because there is a cost of 'mailing' those forms out.
It would be nothing for Adyen to simply 'change' the calc from $20,000 to $600; it's one change for all in the USA.
The 'shipping' portion would just be a cost that eBay will pass on to all sellers; as they did for the Sales Tax Collection (charging sellers 12+% on Tax Collected- to cover fees by the company they had to hire to do all the accounting required).
No, Adyen is a vendor of Ebay's. Ebay is responsible for the 1099Ks as can be seen from them issuing them for the past 5 years since MP has existed. Adyen literally processes the money, but Ebay manages all of it. And Ebay is a licensed Money Processor too.
It is no different that Amazon, Etsy and the rest of the sites that have their own money processing. The Marketplace is the one that issues the 1099Ks.
It is so much more important to Ebay than some amount of postage. Ebay is losing small and casual sellers because they are scared of having to pay taxes. Most are quitting without having accurate information on the subject and that is sad. They are depending on Gossip and Assumptions. So they are costing themselves this money they could have had in hand because of fear of taxation.
Educating these sellers should be a priority for Ebay, which I have suggested, but so far nothing.
@magicstormart wrote:I signed. People who are turning profit should be paying tax, but do you know how much stuff I sell on ebay at a loss? Ebay is more or less like my home garage sale. A good chunk of it I actually do have history of receipts. It's going to make SO MUCH paperwork for me and cost a lot of time and money probably to file now. The problem is, how many people actually have that stuff on hand? The IRS is going to be collecting millions if not billions of dollars that it is not entitled to because of people not knowing how to handle these new rules or not having receipts for the last several years to back up the profit loss. The government is getting enough out of people. It doesn't need to be taking money that doesn't belong to them by their own policy from people. This is going to be a logistical nightmare once they have to start processing all the paperwork involved in this. And I will do everything I can to have every receipt set aside so they realize how much this endeavor of theirs is not worth it. They need to raise the cap back to target those actually doing this as a business venture.
So you want to hold the government responsible for the people that don't, won't or didn't take a little time to LEARN how this new form impacts them. The IRS rules HAVE NOT changed. The ONLY thing that changed was the minimum threshold on a FORM.
ANYONE that buys stuff for resale are in business. They may not see it that way, but it is a fact. That is all it takes. That doesn't mean they have to have a formally set up business, that is completely different. Most anyone can operate as a Sole Proprietor without have a company formally set up.
@magicstormart wrote:Exactly. The IRS is literally proving the old saying "taxation is theft." I didn't agree with that statement entirely as obviously we need tax to make a country run, but they are literally going to be collecting money they are not entitled to from people, because how many people are going to have receipts to cover every purchase they've made in the last few years, especially as this happened with little advanced warning. It wasn't like well, statute of limitations on these things is going to be X, make sure you save your receipts when we start doing this in 6 years. 90% of my sales this year have been at a loss, because they were just things I had sitting around not using anymore.
You are ASSUMING that a seller has a serious problem if they don't have receipts. That is NOT true. Do your research.
What is happening with "little advanced warning"??? NOT this subject of the 1099K threshold. That was changed about TWO years ago. How much time do you feel you needed for this change?
Selling your personal stuff at a loss is often just an opinion without taking into consideration the time you got to use the item or depreciating it for age. It is NOT simply your original purchase prices verses what you sold it for. That would be silly. It isn't any longer in new condition it was used.
You sell stuff that may be from your own stuff around your home, but you also sell new stuff which is not the treated the same as selling off your personal items.
FYI, your pre ordered item you are selling is AGAINST the Ebay rules as well as Federal Consumer Protections laws. You are welcome to sell Pre order stuff on Ebay, but you need to be delivering / shipping it within 30 days. Not 4-6 months or the other one that is 6-8 months.
https://www.ebay.com/help/policies/listing-policies/presale-listings-policy?id=4252
Curiosity question, how can something be "retired" and on preorder with a 6-8 month lead? If it is retired, why is it in production?
@magicstormart wrote:Because you have to prove profit loss if they ask for it. Even if it's declared as a hobby without the intent to make a profit, if there's not reported profit loss, you still may be taxed on it above a certain threshold.
If you are buying stuff for resale, your income is taxable. Don't confuse a minimum threshold on a FORM as the overall minimum threshold for IRS as that would be totally incorrect. The threshold of a FORM does not set the rule for ALL forms of income.
@varebelrose wrote:
@blingfling123 wrote:
A 1099 is not sent for payments made to friends or family. If they pay the rent using F&F on any of the online services (which is pretty much what everyone in this situation is doing because of fees), no 1099 is created.
And, how, exactly, would the originator of the 1099 know the nature of the transfer of funds? If I send $1000 for textbooks to my son away at college, all the payment processor sees is that he received a gross amount of $1000. I realize Paypal has a special no (or low) fee "friends and family" application, but I would have to see it in writing to believe that those transfers are exempt from the 1099 issuance threshold.
This is a non issue in Ebay's MP program since no one can even have money transferred into their account via some other source other than selling stuff on the site.
It is likely that money processors have some way of determining these types of transfers into the account because they would know, like PP knows, these types of funds to not belong on a 1099K. With that said it is a non issue on this site.
@glasser wrote:I believe I read somewhere that eBay is in fact trying to get this limit changed and increased in congress. While raising the amount that generates a 1099 does not change any tax obligations. I assume eBay sees it as friction to gaining new sellers and probably comes with admin overhead for eBay as well.
Personally, I think the rules hobbyist vs business are a bit confusing. I think all sales should be reported and then there should be a something like the first $3K (totally arbitrary) of all sales are not included in income for tax purposes no matter if you made a profit or took a loss. This would allow small sellers to operate with little hassle and might actually spur people to engage in commerce. Yes, the feds and states might lose income tax revenue, but the majority of states would collect sales tax. In some cases, the sales tax would be higher than income tax (depending on an individual's circumstances.
It would not apply if do a schedule C since you are already stating you are a business.
That is what this entire thread is about. Ebay's efforts in trying to get the minimum threshold on the 1099K changed.
It doesn't have to be confusing. If you purchase stuff for resale, you are in business, no matter what size you are. Don't confuse being in business to mean you need to have some formally set up business. That simply is not the case.
If you are selling personal items from around your home, while you may need to claim this on your federal tax report if you sold over $600 in stuff, you likely do not need to pay additional income taxes on that money. There are some exceptions, so do your homework. There are some good links in post #44 on this thread.
@magicstormart wrote:I'm not sure what the purpose of going through listings is, but as you do research, you're welcome to look it up through Bungie as well. The products must have an order placed by a specific date, and then there's production time after that window closes. It's a Bungie thing. Those listings were primarily requested by one person and since then, a couple others, and they're aware of how the production works for that company. They are not able to get those items on their own because they did not do the work to get the achievement to unlock being able to purchase those items, but they like to collect. Of course those items fall under purchase for resale, which are separate from items purchased for personal and sold at a loss. However it gets difficult when selling both those types of items and items that were purchased for personal, and then sold at a loss. Even a couple months old, they're not going to have massive depreciation for declared value. But then instead of a seller reporting these things as was intended, it becomes very difficult to prove what was intended for profit and what was not. Hence more paperwork and reciepts.
There are many reasons why there might be a need to look at someone's listings when chatting on the threads. In this particular case I was simply looking to see if you were a seller of preowned personal items or a seller of items you purchase for resale. I found that you might be doing both. However lots of seller purchase used items for resale on Ebay as part of their business model.
But that is why I looked at your listings and I just happen to notice your presale items.
The requirements of "Bungie" do not translate to over riding the Ebay rules or the Consumer Protection act. And it doesn't matter if buyers are willing to abide by your lead time. It is AGAINST Ebay rules and the Federal Law. If Ebay finds them, they will take your listings down for violation of policy.
You might try two separate selling accounts. Lots of sellers do that to split up what they sell for all kinds of reasons. While your 1099K will represent all your selling accounts on Ebay, you would be tracking your accounts separately which would likely make you bookkeeping much easier.
