the new 1099

[anvilring]

What are we to do w/the new 1099 if we're selling/disposing of an estate whereas the items are inherited and thus marked to market?, i.e. not to be subject to income tax? My Mother died in 2021 and I have a slew of collectables to sell that were hers; how will this look on the new 1099 we are supposed to be receiving?

[newlifeforoldstuff2]

This  is not the place to ask. The 1099 will not tell you that information. If the 1099 has your tax ID number on it, you will be the one responsible for the income and taxes. All income can be subject to taxes. Does not matter that you inherited it. Have you or will you sell items in her estate's name or yours?  What does her will say?  If no will, that can be even more headaches. Talk to a tax accountant. Estates and taxes can be very complicated.  Expensive stuff may require appraisal. If her estate was already settled, then items may be considered your property and you are responsible for the income and the taxes.  

[anvilring]

No, I'm the sole heir; so the entire inheritance is not subject to income tax as it's under 5 mil. I'm quite familiar w/1099s but I'm just wondering how/what I'll need to provide other than a death cert. to prove I don't owe taxes on these ebay sales associated w/my mom's estate.

[dryophelia]

@anvilring 

Not much has changed. Income is still required to be reported, just like my other year. 
The ONLY factor that has changed, is the amount that triggers a 1099K to be issued. 
Now, even low volume sellers are issued that all important document (1099K) for quick reference against the sellers own bookkeeping records. 

The only people not happy with “the new 1099”, are people who haven’t been claiming online sales as income. 

Not all income is profit. Deduct all your expenses. 

When dealing with estate stuff, it’s a good idea to talk to a tax professional in your jurisdiction. 
Don’t take tax advise from an online forum, such as this. 

[vietcoinscollection]

You need to ask a CPA or tax attorney.  Don't let someone here guess what needs to be done.😊

[newlifeforoldstuff2]

Not having to pay an inheritance tax is a very different thing than income tax. You need to speak with a tax expert.  

[luckythewinner]

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@anvilring wrote:

What are we to do w/the new 1099 if we're selling/disposing of an estate whereas the items are inherited and thus marked to market?, i.e. not to be subject to income tax? My Mother died in 2021 and I have a slew of collectables to sell that were hers; how will this look on the new 1099 we are supposed to be receiving?

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How will it look on the 1099-K you will be receiving?

The 1099-K will be issued to the SSN that is on the eBay account, and it will report the total amount of the payment processed for the account (excluding any sales tax that was collected and remitted by eBay).

But I think your real question is how are you supposed to account for income that appears on a 1099-K that is nontaxable. I have scoured the IRS for guidance on how to do that and not found anything.

[m60driver]

The basic rule of thumb is that the cost, the value of an inheritance, is the value on the date of inheritance.  Unless the items value has changed significantly since 2021, your cost is what the item sells for on Ebay.  But yes, you might want to discuss this with a CPA, especially if you have other matters that justify the cost of hiring a CPA.  Otherwise, just use the sold value of your inherited items as the cost and, in the unlikely event that you get audited, you can then hire the CPA.

[luckythewinner]

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@dryophelia wrote:

The only people not happy with “the new 1099”, are people who haven’t been claiming online sales as income.  

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I do not think that is an accurate statement.

There are people like the OP who will be receiving a 1099-K that includes income that is not taxable. They are not tax cheats, and they have legitimate concerns about how to properly account for that 1099-K on their tax return. 

[stainlessenginecovers · Accepted solution]

The 1099 received will look no different, but as you stated, under $5M is fully deductible (reporting IS required, but it is deductible) 

1.) On the 1040 under 'other income', you put the amount shown on the 1099.

2.) Using "Schedule A", line 16 (other deductions) that same amount goes there under 1 of the reasons allowed to be used for Line 16 (Federal Estate Tax on Income in Respect of a Decedent).

But as stated by others- always check with your tax preparer. 

[the_fancy_fox]

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@anvilring wrote:

What are we to do w/the new 1099 if we're selling/disposing of an estate whereas the items are inherited and thus marked to market?, i.e. not to be subject to income tax? My Mother died in 2021 and I have a slew of collectables to sell that were hers; how will this look on the new 1099 we are supposed to be receiving?

it’s no different than if your selling your personal items. 

I inherited two large estates. The items become yours at market value. 

sell them for more money than market value and you will owe taxes on the difference. If you sell them for less you will not. 

you need to keep detailed records and account for all the money on the 1099.  

probably best to get a tax accountant the first year so you see how it’s done. It’s not hard, just have to know what goes where. 

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[the_fancy_fox]

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@newlifeforoldstuff2 wrote:

This  is not the place to ask. The 1099 will not tell you that information. If the 1099 has your tax ID number on it, you will be the one responsible for the income and taxes. All income can be subject to taxes. Does not matter that you inherited it. Have you or will you sell items in her estate's name or yours?  What does her will say?  If no will, that can be even more headaches. Talk to a tax accountant. Estates and taxes can be very complicated.  Expensive stuff may require appraisal. If her estate was already settled, then items may be considered your property and you are responsible for the income and the taxes.  

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It does matter if you have inherited it. Stepped up value. My mom had over 2000 MIMB Barbies from the 1960’s. If she had sold them she would have had a gain to pay taxes on. 

when I inherited them they were all inherited with stepped up value. I got them at market value the day she passed away. 

Since I sold them for less than market value, I paid no tax on those items.

but I agree with if you have high dollar items an appraisal would be wise. (I would never sell high dollar items here, too much risk).

[the_fancy_fox]

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@anvilring wrote:

No, I'm the sole heir; so the entire inheritance is not subject to income tax as it's under 5 mil. I'm quite familiar w/1099s but I'm just wondering how/what I'll need to provide other than a death cert. to prove I don't owe taxes on these ebay sales associated w/my mom's estate.

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Get a tax preparer to do your taxes the first year so you see how it’s done. 

you need to account for all the money on the 1099. Shipping costs, ebay fees, etc. 

[m60driver]

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@dryophelia wrote:

The only people not happy with “the new 1099”, are people who haven’t been claiming online sales as income. 

 The new requirement has a preposterously low limit to issue a 1099-K which requires someone with really minimum income from online sales to incur the expenses of filing the otherwise alien Schedule-C or hiring a CPA.  It is outlandish, and a cause for righteous indignation and anger, for someone to have to file and pay those expenses for such a small amount of income.  For some very small sellers, the cost of filing will be close to their profit from the sales.  Meanwhile, unearned income, you know the main source of income for the 1%, remains taxed at a lower rate then earned income.  It is all part of the class war against the workers.

[monica-sells]

"...

It does matter if you have inherited it. Stepped up value. My mom had over 2000 MIMB Barbies from the 1960’s. If she had sold them she would have had a gain to pay taxes on. 

when I inherited them they were all inherited with stepped up value. I got them at market value the day she passed away. 

Since I sold them for less than market value, I paid no tax on those items.

..."

This is exactly why you need a good accountant....to get great advice/direction like this......this is the way you can save a lot of money, and only a good accountant can decipher the inheritance debacle.