Happy 2022! And Happy $600 Federal Threshold for 1099 Reporting!
As a collector I rarely sell, but this caught my eye in the news:
A search seems you guys rehashed this in another thread.
The discussion brought up issues of fairness, but the tax code isn't fair as others point out in the thread. It even made the news yesterday: https://www.cnbc.com/2021/12/29/the-rich-benefit-as-democrats-forgo-tax-on-unrealized-capital-gains.html
I had planned on liquidating my $10K sportscard collection soon, but with this new requirement maybe I'll forget it and let my kids inherit it instead.
1099s are automatic. Make the threshold and the IRS will be notified. Fail to report it, and you will receive a bill from the IRS because the amount is missing. You don't need to be subject to a full audit for the matching to occur. It's a simple algorithm: Is the sum of 1099s received greater than the threshold? If yes, is the sum equal to the amount reported by the taxpayer? If yes, nothing happens. If no, a bill or credit (if overpaid) is issued to the taxpayer.
I've taught my kids two iron-clad rules because breaking them guarantees a short, miserable life:
1. Don't mess with the mob.
2. Don't mess with the IRS.
Looks like many collectors are going to learn the importance of rule #2 next year.