Also, I don't believe that losses on sales of collectables can be used to offset gains. And the tax rate is higher.
They certainly can if reported on schedule C as business income.
But I am not a business.
Maybe we need two threads, one for businesses and one for us regular people.
Also, if you aren't set up as a business you can't deduct the sorts of expenses and costs that a business can deduct.
If you profited from sales, you're a business. You don't need to be an LLC or anything else. You're a "sole proprietorship"
What?!
If I sell one coin at a profit I'm a business?!
I don't think that's true at all. The IRS does not let you deduct losses on hobbies, and they don't let you deduct expenses on hobbies, other than the specific item's cost basis.
It is true. I'm not a registered business. You can use schedule C for any sale that is profitable
Schedule C (Form 1040) to report income or loss from a business you operated or a profession you practiced as a sole proprietor. An activity qualifies as a business if:
Your primary purpose for engaging in the activity is for income or profit.
You are involved in the activity with continuity and regularity.
Also, I don't believe that losses on sales of collectables can be used to offset gains. And the tax rate is higher.
They certainly can if reported on schedule C as business income.
But I am not a business.
Maybe we need two threads, one for businesses and one for us regular people.
Also, if you aren't set up as a business you can't deduct the sorts of expenses and costs that a business can deduct.
If you profited from sales, you're a business. You don't need to be an LLC or anything else. You're a "sole proprietorship"
What?!
If I sell one coin at a profit I'm a business?!
I don't think that's true at all. The IRS does not let you deduct losses on hobbies, and they don't let you deduct expenses on hobbies, other than the specific item's cost basis.
From turbo tax:
is a sole proprietorship?
A sole proprietorship is a business a sole person operates and controls that is not set up as another legal business entity separate from yourself, such as a corporation or partnership. Generally, there's no legal separation between you and your business. You own and run the business by yourself, are entitled to all of the profits, and are responsible for its losses and liabilities. Often, freelancers, gig workers, independent contractors and other small business owners operate as a sole proprietorship.
Even if you just use your lawn mower to cut your neighbors’ grass for $10 per yard on weekends, you’re likely a sole proprietor and need to report your business finances on Schedule C.
Also, I don't believe that losses on sales of collectables can be used to offset gains. And the tax rate is higher.
They certainly can if reported on schedule C as business income.
But I am not a business.
Maybe we need two threads, one for businesses and one for us regular people.
Also, if you aren't set up as a business you can't deduct the sorts of expenses and costs that a business can deduct.
If you profited from sales, you're a business. You don't need to be an LLC or anything else. You're a "sole proprietorship"
What?!
If I sell one coin at a profit I'm a business?!
I don't think that's true at all. The IRS does not let you deduct losses on hobbies, and they don't let you deduct expenses on hobbies, other than the specific item's cost basis.
Question
How do you distinguish between a business and a hobby?
Answer
In making the distinction between a hobby or business activity, take into account all facts and circumstances with respect to the activity. A hobby activity is an activity not done for profit. This includes activities done mainly for sport, recreation, or pleasure. No one factor alone is decisive. You must generally consider these factors in determining whether an activity is a business engaged in making a profit:
Whether you carry on the activity in a businesslike manner and maintain complete and accurate books and records.
Whether you have personal motives in carrying on the activity.
Whether the time and effort you put into the activity indicate you intend to make it profitable.
Whether you depend on income from the activity for your livelihood.
Whether your losses are due to circumstances beyond your control (or are normal in the startup phase of your type of business).
Whether you or your advisors have the knowledge needed to carry on the activity as a successful business.
Whether you were successful in making a profit in similar activities in the past.
Whether the activity makes a profit in some years and how much profit it makes.
Whether you can expect to make a future profit from the appreciation of the assets used in the activity.
Schedule C (Form 1040) to report income or loss from a business you operated or a profession you practiced as a sole proprietor. An activity qualifies as a business if:
Your primary purpose for engaging in the activity is for income or profit.
You are involved in the activity with continuity and regularity.
Interesting that there are people who don't think of themselves as businesses yet are unhappy when they don't make a profit on the coins they sell.
Schedule C (Form 1040) to report income or loss from a business you operated or a profession you practiced as a sole proprietor. An activity qualifies as a business if:
Your primary purpose for engaging in the activity is for income or profit.
You are involved in the activity with continuity and regularity.
Interesting that there are people who don't think of themselves as businesses yet are unhappy when they don't make a profit on the coins they sell.
And even more unhappy if their profit is recorded on a 1099.
We keep hearing "investment", those profits are also taxable.
Schedule C (Form 1040) to report income or loss from a business you operated or a profession you practiced as a sole proprietor. An activity qualifies as a business if:
Your primary purpose for engaging in the activity is for income or profit.
You are involved in the activity with continuity and regularity.
Interesting that there are people who don't think of themselves as businesses yet are unhappy when they don't make a profit on the coins they sell.
And even more unhappy if their profit is recorded on a 1099.
We keep hearing "investment", those profits are also taxable.
I think the point being argued is that it's not really a very big investment, so everybody should just pretend it didn't happen.
Schedule C (Form 1040) to report income or loss from a business you operated or a profession you practiced as a sole proprietor. An activity qualifies as a business if:
Your primary purpose for engaging in the activity is for income or profit.
You are involved in the activity with continuity and regularity.
The "activity" is coin collecting as a hobby. Selling one or two coins does not make it a business. The more extensive IRS snippet you posted expands on the criteria to explain that.
There's a lot of bad advice being dispensed on this thread, or at least advice which does not apply to everyone who is reading it. That's the way these tax threads always turn out.
Schedule C (Form 1040) to report income or loss from a business you operated or a profession you practiced as a sole proprietor. An activity qualifies as a business if:
Your primary purpose for engaging in the activity is for income or profit.
You are involved in the activity with continuity and regularity.
The "activity" is coin collecting as a hobby. Selling one or two coins does not make it a business. The more extensive IRS snippet you posted expands on the criteria to explain that.
There's a lot of bad advice being dispensed on this thread, or at least advice which does not apply to everyone who is reading it. That's the way these tax threads always turn out.
A hobby that generates a net profit still requires inclusion in one's tax return; it doesn't have to be a "business" to generate taxable income. It does have to be a business to allow one the deduct net losses.
Schedule C (Form 1040) to report income or loss from a business you operated or a profession you practiced as a sole proprietor. An activity qualifies as a business if:
Your primary purpose for engaging in the activity is for income or profit.
You are involved in the activity with continuity and regularity.
The "activity" is coin collecting as a hobby. Selling one or two coins does not make it a business. The more extensive IRS snippet you posted expands on the criteria to explain that.
There's a lot of bad advice being dispensed on this thread, or at least advice which does not apply to everyone who is reading it. That's the way these tax threads always turn out.
Your question was what to do with the losses relative to the gains. That argued for multiple sales.
You can report it as a capital gain if you want. That's another option. But if you are selling coins intending to make a profit you are a business.
It's not bad advice just because you don't understand it. All of the people in this thread have done what we said and have been vetted by the IRS.
Schedule C (Form 1040) to report income or loss from a business you operated or a profession you practiced as a sole proprietor. An activity qualifies as a business if:
Your primary purpose for engaging in the activity is for income or profit.
You are involved in the activity with continuity and regularity.
The "activity" is coin collecting as a hobby. Selling one or two coins does not make it a business. The more extensive IRS snippet you posted expands on the criteria to explain that.
There's a lot of bad advice being dispensed on this thread, or at least advice which does not apply to everyone who is reading it. That's the way these tax threads always turn out.
A hobby that generates a net profit still requires inclusion in one's tax return; it doesn't have to be a "business" to generate taxable income. It does have to be a business to allow one the deduct net losses.
Schedule C (Form 1040) to report income or loss from a business you operated or a profession you practiced as a sole proprietor. An activity qualifies as a business if:
Your primary purpose for engaging in the activity is for income or profit.
You are involved in the activity with continuity and regularity.
The "activity" is coin collecting as a hobby. Selling one or two coins does not make it a business. The more extensive IRS snippet you posted expands on the criteria to explain that.
There's a lot of bad advice being dispensed on this thread, or at least advice which does not apply to everyone who is reading it. That's the way these tax threads always turn out.
Your question was what to do with the losses relative to the gains. That argued for multiple sales.
You can report it as a capital gain if you want. That's another option. But if you are selling coins intending to make a profit you are a business.
It's not bad advice just because you don't understand it. All of the people in this thread have done what we said and have been vetted by the IRS.
Your own post above from the IRS site stipulates that there are certain criteria used to determine hobby vs business. Did you read it before you posted it? It's not just a matter of personal preference if the criteria are met or not.
In any case, I guess I'm just too stupid to continue to post here. But I will be sure to provide your name and address to the IRS on my 1040 when I evercise the tax and legal advice you have been so aggressively dispensing here.
Schedule C (Form 1040) to report income or loss from a business you operated or a profession you practiced as a sole proprietor. An activity qualifies as a business if:
Your primary purpose for engaging in the activity is for income or profit.
You are involved in the activity with continuity and regularity.
The "activity" is coin collecting as a hobby. Selling one or two coins does not make it a business. The more extensive IRS snippet you posted expands on the criteria to explain that.
There's a lot of bad advice being dispensed on this thread, or at least advice which does not apply to everyone who is reading it. That's the way these tax threads always turn out.
A hobby that generates a net profit still requires inclusion in one's tax return; it doesn't have to be a "business" to generate taxable income. It does have to be a business to allow one the deduct net losses.
Schedule C (Form 1040) to report income or loss from a business you operated or a profession you practiced as a sole proprietor. An activity qualifies as a business if:
Your primary purpose for engaging in the activity is for income or profit.
You are involved in the activity with continuity and regularity.
The "activity" is coin collecting as a hobby. Selling one or two coins does not make it a business. The more extensive IRS snippet you posted expands on the criteria to explain that.
There's a lot of bad advice being dispensed on this thread, or at least advice which does not apply to everyone who is reading it. That's the way these tax threads always turn out.
Your question was what to do with the losses relative to the gains. That argued for multiple sales.
You can report it as a capital gain if you want. That's another option. But if you are selling coins intending to make a profit you are a business.
It's not bad advice just because you don't understand it. All of the people in this thread have done what we said and have been vetted by the IRS.
Your own post above from the IRS site stipulates that there are certain criteria used to determine hobby vs business. Did you read it before you posted it? It's not just a matter of personal preference if the criteria are met or not.
In any case, I guess I'm just too stupid to continue to post here. But I will be sure to provide your name and address to the IRS on my 1040 when I evercise the tax and legal advice you have been so aggressively dispensing here.
We've told you there are two options for where to record sales. Where you put them is really fairly flexible. This all started when you asked what to do with losses relative to profits. I pointed to schedule C. You said you aren't a business. I said you very well could be and posted the links from the IRS. Hire a professional, if you wish. But all you need to be a business is more than one sale and intent to profit. That makes it largely a matter of choice.
@BAJJERFAN said:
Depends upon the loss. IIRC hobby losses are not deductible. Search irs.gov to verify.
"Hobby losses" is a term of art in tax law; essentially, one cannot deduct losses incurred in carrying on a hobby from other income.
But one can deduct losses incurred in that hobby from gains achieved in that hobby, to reduce the tax consequences of those gains. If the net gain/loss is a net loss, you cannot deduct that net loss from other income; but if you have a net gain in a tax year, there is a tax liability generated.
Business? Hobby? Who cares? I have an accountant (he used to work for the IRS) to do my taxes. I told him I was selling stuff on eBay and asked him what the best way would be to deal with this. He tells me what info he needs, I get it for him and he prepares my tax returns for me. Turbotax seems to run about $100, I pay around $300 to the accountant. I'm more than willing to spend that extra $200 in order to avoid having to deal with making sure I've got the latest software updates and I have a real, live person instead of an online customer service "agent" to answer questions for me. The last time I did my own taxes, I spent the better part of a weekend on it and I still wondered if I got it right or not. Don't want to do that anymore.
Did we ever get a definitive answer to the OP? My take is that a 1099 would not be issued based on Zelle transactions?
How you choose to deal with your taxes is up to you...
I read the whole tread and decided, based on the posts, it's possible to justify almost any tax position you want. I'm a lifetime coin collector and truly enjoy reading this forum. I also pracice in federal tax court. Alot of what's on this thread is correct but alot is not. As to the original question my understanding is zelle is not issuing 1099k s but that could change. 1099k or not, hobby or business income(profit) is taxable. Best to talk to your CPA.
@ricko said:
I do not have a coin business. My job pays me and withholds taxes on my income. I do not anticipate starting a business. If I do, I will comply with applicable tax laws. Cheers, RickO
From what I gather here you don't have to be a business to meet the reporting of profit threshold.
Successful transactions:Tookybandit. "Everyone is equal, some are more equal than others".
I went to a coin show and a comic show this weekend. I always bring my resale certificates with me to give to dealers when I buy. This time, like every other time. They looked at me like I was crazy. Most didn't want it or know what to do with it. One humored me by taking a photo of it and handing it back.
At the risk of being flamed, I wish they would crack down on shows and all the other cheats. I would like a level playing field.
Regarding a "level playing field". Seems like the others have leveled the playing field, among themselves.
Successful transactions:Tookybandit. "Everyone is equal, some are more equal than others".
I went to a coin show and a comic show this weekend. I always bring my resale certificates with me to give to dealers when I buy. This time, like every other time. They looked at me like I was crazy. Most didn't want it or know what to do with it. One humored me by taking a photo of it and handing it back.
At the risk of being flamed, I wish they would crack down on shows and all the other cheats. I would like a level playing field.
Regarding a "level playing field". Seems like the others have leveled the playing field, among themselves.
Yes, that's mostly true. There were a couple dealers that appeared to be charging sales tax appropriately. Of course, I can't know what they are reporting to the state.
Can’t tell if your answer is buried in the self righteous “I pay my taxes” comments”, but Zelle is not required to provide a 1099k. Zelle like Venmo is not to be used for business purposes and therefore the transactions do not pertain to commerce activities.
Just like Friends and Family designated P2P on Paypal is not included on a 1099k
Can’t tell if your answer is buried in the self righteous “I pay my taxes” comments”, but Zelle is not required to provide a 1099k. Zelle like Venmo is not to be used for business purposes and therefore the transactions do not pertain to commerce activities.
At least until one of those 87,000 new IRS agents is smart enough to realize Zelle is being used to pay for goods and services.
Repetition of ignorance is ignorance raised to the power two.
Can’t tell if your answer is buried in the self righteous “I pay my taxes” comments”, but Zelle is not required to provide a 1099k. Zelle like Venmo is not to be used for business purposes and therefore the transactions do not pertain to commerce activities.
Just like Friends and Family designated P2P on Paypal is not included on a 1099k
Nothing self righteous about it. It's a complaint about fairness.
I went to a coin show and a comic show this weekend. I always bring my resale certificates with me to give to dealers when I buy. This time, like every other time. They looked at me like I was crazy. Most didn't want it or know what to do with it. One humored me by taking a photo of it and handing it back.
At the risk of being flamed, I wish they would crack down on shows and all the other cheats. I would like a level playing field.
Regarding a "level playing field". Seems like the others have leveled the playing field, among themselves.
Yes, that's mostly true. There were a couple dealers that appeared to be charging sales tax appropriately. Of course, I can't know what they are reporting to the state.
Do the dealers in your realm post signs that say tax is included in the purchase price?
Successful transactions:Tookybandit. "Everyone is equal, some are more equal than others".
I went to a coin show and a comic show this weekend. I always bring my resale certificates with me to give to dealers when I buy. This time, like every other time. They looked at me like I was crazy. Most didn't want it or know what to do with it. One humored me by taking a photo of it and handing it back.
At the risk of being flamed, I wish they would crack down on shows and all the other cheats. I would like a level playing field.
Regarding a "level playing field". Seems like the others have leveled the playing field, among themselves.
Yes, that's mostly true. There were a couple dealers that appeared to be charging sales tax appropriately. Of course, I can't know what they are reporting to the state.
Do the dealers in your realm post signs that say tax is included in the purchase price?
No, they do not. That is also a technical violation.
Comments
It is true. I'm not a registered business. You can use schedule C for any sale that is profitable
From the IRS:
Schedule C (Form 1040) to report income or loss from a business you operated or a profession you practiced as a sole proprietor. An activity qualifies as a business if:
Your primary purpose for engaging in the activity is for income or profit.
You are involved in the activity with continuity and regularity.
From turbo tax:
is a sole proprietorship?
A sole proprietorship is a business a sole person operates and controls that is not set up as another legal business entity separate from yourself, such as a corporation or partnership. Generally, there's no legal separation between you and your business. You own and run the business by yourself, are entitled to all of the profits, and are responsible for its losses and liabilities. Often, freelancers, gig workers, independent contractors and other small business owners operate as a sole proprietorship.
Even if you just use your lawn mower to cut your neighbors’ grass for $10 per yard on weekends, you’re likely a sole proprietor and need to report your business finances on Schedule C.
Also from the IRS:
https://www.irs.gov/newsroom/tips-for-taxpayers-who-make-money-from-a-hobby
Question
How do you distinguish between a business and a hobby?
Answer
In making the distinction between a hobby or business activity, take into account all facts and circumstances with respect to the activity. A hobby activity is an activity not done for profit. This includes activities done mainly for sport, recreation, or pleasure. No one factor alone is decisive. You must generally consider these factors in determining whether an activity is a business engaged in making a profit:
Whether you carry on the activity in a businesslike manner and maintain complete and accurate books and records.
Whether you have personal motives in carrying on the activity.
Whether the time and effort you put into the activity indicate you intend to make it profitable.
Whether you depend on income from the activity for your livelihood.
Whether your losses are due to circumstances beyond your control (or are normal in the startup phase of your type of business).
Whether you or your advisors have the knowledge needed to carry on the activity as a successful business.
Whether you were successful in making a profit in similar activities in the past.
Whether the activity makes a profit in some years and how much profit it makes.
Whether you can expect to make a future profit from the appreciation of the assets used in the activity.
Interesting that there are people who don't think of themselves as businesses yet are unhappy when they don't make a profit on the coins they sell.
And even more unhappy if their profit is recorded on a 1099.
We keep hearing "investment", those profits are also taxable.
I think the point being argued is that it's not really a very big investment, so everybody should just pretend it didn't happen.
The "activity" is coin collecting as a hobby. Selling one or two coins does not make it a business. The more extensive IRS snippet you posted expands on the criteria to explain that.
There's a lot of bad advice being dispensed on this thread, or at least advice which does not apply to everyone who is reading it. That's the way these tax threads always turn out.
A hobby that generates a net profit still requires inclusion in one's tax return; it doesn't have to be a "business" to generate taxable income. It does have to be a business to allow one the deduct net losses.
Your question was what to do with the losses relative to the gains. That argued for multiple sales.
You can report it as a capital gain if you want. That's another option. But if you are selling coins intending to make a profit you are a business.
It's not bad advice just because you don't understand it. All of the people in this thread have done what we said and have been vetted by the IRS.
No one said it didn't.
Your own post above from the IRS site stipulates that there are certain criteria used to determine hobby vs business. Did you read it before you posted it? It's not just a matter of personal preference if the criteria are met or not.
In any case, I guess I'm just too stupid to continue to post here. But I will be sure to provide your name and address to the IRS on my 1040 when I evercise the tax and legal advice you have been so aggressively dispensing here.
I felt it needed clarifying.
We've told you there are two options for where to record sales. Where you put them is really fairly flexible. This all started when you asked what to do with losses relative to profits. I pointed to schedule C. You said you aren't a business. I said you very well could be and posted the links from the IRS. Hire a professional, if you wish. But all you need to be a business is more than one sale and intent to profit. That makes it largely a matter of choice.
Exactly and I agree 100%.
Business? Hobby? Who cares? I have an accountant (he used to work for the IRS) to do my taxes. I told him I was selling stuff on eBay and asked him what the best way would be to deal with this. He tells me what info he needs, I get it for him and he prepares my tax returns for me. Turbotax seems to run about $100, I pay around $300 to the accountant. I'm more than willing to spend that extra $200 in order to avoid having to deal with making sure I've got the latest software updates and I have a real, live person instead of an online customer service "agent" to answer questions for me. The last time I did my own taxes, I spent the better part of a weekend on it and I still wondered if I got it right or not. Don't want to do that anymore.
YMMV
Did we ever get a definitive answer to the OP? My take is that a 1099 would not be issued based on Zelle transactions?
How you choose to deal with your taxes is up to you...
Successful BST Transactions: erwindoc, VTchaser, moursund, robkool, RelicKING, Herb_T, Meltdown, ElmerFusterpuck, airplanenut
I read the whole tread and decided, based on the posts, it's possible to justify almost any tax position you want. I'm a lifetime coin collector and truly enjoy reading this forum. I also pracice in federal tax court. Alot of what's on this thread is correct but alot is not. As to the original question my understanding is zelle is not issuing 1099k s but that could change. 1099k or not, hobby or business income(profit) is taxable. Best to talk to your CPA.
From what I gather here you don't have to be a business to meet the reporting of profit threshold.
Regarding a "level playing field". Seems like the others have leveled the playing field, among themselves.
Yes, that's mostly true. There were a couple dealers that appeared to be charging sales tax appropriately. Of course, I can't know what they are reporting to the state.
Can’t tell if your answer is buried in the self righteous “I pay my taxes” comments”, but Zelle is not required to provide a 1099k. Zelle like Venmo is not to be used for business purposes and therefore the transactions do not pertain to commerce activities.
Just like Friends and Family designated P2P on Paypal is not included on a 1099k
At least until one of those 87,000 new IRS agents is smart enough to realize Zelle is being used to pay for goods and services.
Repetition of ignorance is ignorance raised to the power two.
Nothing self righteous about it. It's a complaint about fairness.
Do the dealers in your realm post signs that say tax is included in the purchase price?
No, they do not. That is also a technical violation.
Get to work. Pay your taxes. Post a coin. Restore the faith.