Consignment and Tax Question

PNWcollector

Question for the board- looking to send some stuff into a consignor to sell, since their fees are similar (or potentially less, depending on how much they for) than eBay fees. Plus I don’t have to deal with the hassle of shipping.
One consignor offers to send payment via check. I don’t expect the check to be more than $10K. Seems like this is a way to sell some stuff without the government getting involved… is there something I’m missing?

GreenSneakers

You should expect a 1099

PaulMaul

Is there a minimum amount below which the consignor won’t send a 1099? Because I sold some stuff through PWCC four or five years ago (less than $1000) and never got one.

GreenSneakers

$600 minimum currently for this type of income. It’s lower for other types (that’s why you might get a 1099 for $12 from your bank)

PNWcollector

So the consignor is responsible for sending a 1099 to the consignee?

GreenSneakers

Yes the consignor is responsible to send 1099 to you and 1096 to IRS. If you don’t receive it you’re still responsible for claiming income (as you would if amount was less than $600) though I concede many people likely do not.

Can I get a lol if this helps. I’m on this board for my comedy chops, the tax and legal advice is more of a hobby.

daltex

@PaulMaul said:
Is there a minimum amount below which the consignor won’t send a 1099? Because I sold some stuff through PWCC four or five years ago (less than $1000) and never got one.

Things have changed since four or five years ago.

GoDodgersFan

Just consigned with 4SC again this year and I will get a 1099 from them.

sjjs28

I thought the $600 limit was rescinded (which was a relatively new requirement) and the actual amount is significantly higher?
Am I mistaken or Maybe that's what I wanted to hear!

jay0791

Does anyone know about the big auction houses like REA?
How about PWCC

daltex

@sjjs28 said:
I thought the $600 limit was rescinded (which was a relatively new requirement) and the actual amount is significantly higher?
Am I mistaken or Maybe that's what I wanted to hear!

I thought it was deferred a year at the federal level, but some states have their limit set this low. YMMV.

daltex

@jay0791 said:
Does anyone know about the big auction houses like REA?
How about PWCC

There is likely a level at which a business is too small to be required to send 1099s, similar to there being a level at which a seller isn't required to collect "foreign" sales tax. I'm sure REA and PWCC are far above that level.

GreenSneakers

There is likely a level at which a business is too small to be required to send 1099s, similar to there being a level at which a seller isn't required to collect "foreign" sales tax. I'm sure REA and PWCC are far above that level.

That is not correct, unfortunately

GreenSneakers

You are likely thinking of this notice

https://www.irs.gov/pub/irs-drop/n-2023-10.pdf

sjjs28

So...
After skimming thru a lot of legal-ese -
I thought I saw that the new threshold for 2023 is $20,000 with no more than 200 transactions (avg of $100 per transaction)

Am I seeing correctly?

RonSportscards

@sjjs28 said:
So...
After skimming thru a lot of legal-ese -
I thought I saw that the new threshold for 2023 is $20,000 with no more than 200 transactions (avg of $100 per transaction)

Am I seeing correctly?

I'm not sure, but I don't think that is new. I think that was the standard all along.
The proposed $600 was such huge drop. I hadn't realized it was postponed. That's good news.

Cakes

I need to sell some stuff before they make it even lower.

daltex

@GreenSneakers said:

There is likely a level at which a business is too small to be required to send 1099s, similar to there being a level at which a seller isn't required to collect "foreign" sales tax. I'm sure REA and PWCC are far above that level.

That is not correct, unfortunately

That surprises me. I'll bet it's often honored in the breach.

totallyradd

The way PWCC is cutting staff, they might not be around in January to send a 1099

thedutymon11

Morning,

I am more confused. My understanding was the $20,000 & 200 transactions was to go into effect for the first time in 2022. Then sometime in Oct/Dec of 2022 they said that they didn't have their (IRS) ducks in a row to move forward and that they were postponing implemetation of the new guidelines until 2023.

Now this comes out:

A participating payee, in the case of a third party network transaction, is any person who accepts payment from a TPSO in settlement of such transaction. Section 6050W(d)(1)(A)(ii).
As originally enacted, section 6050W(e) provided that a TPSO is not required to report third party network transactions with respect to a participating payee unless the gross amount that would otherwise be reported exceeds $20,000 and the number of such transactions with that participating payee exceeds 200.

???

YeeHaw!

Neil

nam812

@thedutymon11 said:
............unless the gross amount that would otherwise be reported exceeds $20,000 and the number of such transactions with that participating payee exceeds 200............

Is it and or is it or? I always thought it was or.

craig44

Wait, does that mean we are back where we started from? $20k or 200 transactions?

confused

daltex

@GreenSneakers said:

There is likely a level at which a business is too small to be required to send 1099s, similar to there being a level at which a seller isn't required to collect "foreign" sales tax. I'm sure REA and PWCC are far above that level.

That is not correct, unfortunately

I guess I was thinking of a situation where a guy owns a barbershop and he displays a friend's artwork, One day a customer comes in and convinces the barber to sell him the painting, and the barber gives the painter the money (with or without taking a commission). I'd be very surprised if the barber would 1099 his friend.

gemint

The safest bet is to pay the taxes you owe.

secretstash

@gemint said:
The safest bet is to pay the taxes you owe.

Define, "owe"...

~1776 Absolutist~

thedutymon11

@craig44 said:
Wait, does that mean we are back where we started from? $20k or 200 transactions?

confused

Same here...Still Confused!

Thanks

YeeHaw!

Neil

oilers99

I thought the current reporting threshold was lowered to $600 but delayed until 2023. I'm hoping they bring back the $20,000 threshold or even a $10,000 threshold if we can get the Wash DC folks to act.