IRS eyes ebayers, Vintage baseball cards!

RipublicaninMass

Often times, those individuals that sell items online - such as a rare baseball card worth five times what it was purchased for - may not realize that they are obligated to report those earnings, says Tom Ochsenschlager, vice president of taxation at the American Institute of CPAs


stinky linky

NewJerseyMeatHook

Hmmmmmm . . .

itzagoner

payin' taxes really sux

gettin' audited sux much worse

NewJerseyMeatHook

Been down that road, Goner.

I agree wholeheartedly.

gosteelers

Those bastages, how did they find us!

Stone193

<< <i>One remedy the IRS is considering is third-party reporting, or having an outside source, such as an online auction site, report information to the IRS. >>


Ebay must have a lobby mechanism the size of Texas!

I'm sure they don't want to get into the 1099 business unless under court order.

I would be surprised if one sees any moves by ebay unless there's a gun pointing at their collective heads.

mike

mercurynut

I have 3 words for this situation...more private sales.

bishop

Mike
I do not think ebay would need to issue 1099s. They are not paying interest, dividends or capital gains. Thery are just collecting fees for running a marketplace. But, they do have records that the IRS could get and use to check against the returns of people who do
make sales there. There would involve an expense to them in retaining , searching and turning over records. But, they can just raise fees to cover that. It is similar to the issue the airlines would face if the IRS started to actively try to collect taxes on the value of air miles

Archaninator

.

1420sports

I don't think that the guy who sells a card here and there has anything to worry about.

MoneyLA

This actually is not new. About a year ago, CPAs were notified about the IRS targeting eBay and other online businesses. In reality, the IRS started to look at eBay about five years, and studied eBay. Now they are ready to take action.

Under the tax law, you must declare all profits-- and they are taxable. your losses, however, are not tax deductible unless you have established a "business" -- otherwise your losses are considered part of a "hobby" and hobby losses are not tax deductible events.

Gamblers have a similar problem.

A strict interpretation of the tax law says that you must keep records of all of your gambling wins and then you can use your losses to offset your wins. If your losses are greater than your wins then you have a "net loss" and no income tax liability. BUT -- and this is VERY important -- your wins (even though you have a net loss) can raise your adjusted gross income. And when your AGI goes up, it can wipe out the value of your schedule A deductions.

The same thing will happen now with buying and selling collectibles. Your gains on certain collectibles (even if you do not have a "net profit") can raise your adjusted gross income and destroy your other deductions.

Gotta love the tax law.

itzagoner

the key to the puzzle is the deductions....if you run an ebay biz, there are MANY various ways to legally declare expenses as they relate to daily operations....my tax preparer has kept me informed and helped quite a bit to save me some coin

bishop

There is a humorous tax law case in which the IRS pursued a guy who won a lot of money on a race ( the tracks report big winners) and he was trying to pove up offsetting losses with claims tickets on non winners. His offsets were disallowed when it was noted that many of his losing tickets showed signs of shoe prints on them

Courvoisier

The Gub-Mint are pimps and pushers. Now, how would they know how much a playa purchased a card for? If you buy from a dealer and sell on Ebay, how can they prove anything? I don't know of anyone who save their receipts from card shops. Now, what if we lose money on cards like most do? Maybe we all need to get business licenses, buy cards, sell the ones we don't want and claim a loss for the next 5 years. Set it up like a S-corp and count those loses against your personal paycheck. I bet they wouldn't like those apples.

Ok, Pimp is ok.... just had to rant a little.

Play On....

NewJerseyMeatHook

One, two, three, four...
Hrmm!
One, two, (one, two, three, four!)

Let me tell you how it will be;
There's one for you, nineteen for me.
'Cause I’m the taxman,
Yeah, I’m the taxman.

Should five per cent appear too small,
Be thankful I don't take it all.
'Cause I’m the taxman,
Yeah, I’m the taxman.

(if you drive a car, car - I’ll tax the street;
(if you try to sit, sit - I’ll tax your seat;
(if you get too cold, cold - I’ll tax the heat;
(if you take a walk, walk - I'll tax your feet.

Taxman!

'Cause I’m the taxman,
Yeah, I’m the taxman.

Don't ask me what I want it for, (ah-ah, mister Wilson)
If you don't want to pay some more. (ah-ah, mister heath)
'Cause I’m the taxman,
Yeah, I’m the taxman.

Now my advice for those who die, (taxman)
Declare the pennies on your eyes. (taxman)
'Cause I’m the taxman,
Yeah, I’m the taxman.

And you're working for no one but me.

Taxman!

itzagoner

i bow to thee, o taxman....i am your indentured slave.....as long as there's enuff left for a

kadokakid

Really shouldn't come as any surprise to anyone. These items have always been required to be reported.
Responsibility of taxpayer to keep track of basis of the cards sold.

I hope IRS comes down hard on EBAY sellers myself. Lots of unreported income their.


Peace

gemint

If the government wants to go to war with eBayers, we can fight back. If they start taxing my hobby, I'll write off half my income. I'll clear out one of my rooms and make it an eBay card room only (write off), I'll designate one of my cars for only eBay (running to the post office and back), I'll write off all the supplies I buy for my cards and I'll certainly track all the money I sink into the hobby which is more than I sell. The IRS my end up owing me more money in the end!

itzagoner

<< <i>If the government wants to go to war with eBayers, we can fight back. If they start taxing my hobby, I'll write off half my income. I'll clear out one of my rooms and make it an eBay card room only (write off), I'll designate one of my cars for only eBay (running to the post office and back), I'll write off all the supplies I buy for my cards and I'll certainly track all the money I sink into the hobby which is more than I sell. The IRS my end up owing me more money in the end! >>



attakid

kadokakid

The money you plow in to the hobby is called inventory, not expense.

I hear ya, pretty easy to avoid paying taxes at this time, but if you get audited and
they start snooping around, they'll convert it from a hobby to a business if you buy and
sell a lot of cards.

If you're purely a collector you shouldn't have a problem, if you're a speculator, then you'll have
a problem.


Peace

alnavman

ok, so if I have a card that I bought for $5, had it slabbed for $5 and sold it for $15 and I'm not running a business what would the amount be on taxes? If I'm reading this thread right so far it sounds like the taxable income is $15.......

goose3

well you have a gain of 5.00 before you take into account your mileage, expenses, etc.....

so in reality, you lost 15.00

alnavman

I hear ya Goose, but I don't think you can deduct any of the items unless you are running a business.....in which case my taxes should reflect $15 more in taxable income.....which then brings up the question of cards sold at a loss.....same situation I described, what if the card only sold for $2? Any we've all had that happen to us....would appear that if you are not running a business you would have to report $2. Guess I should ask an accountant....

kadokakid

Alva

You could track them all on schedule D, capital gains and losses similar to selling stock. Could include purchase price plus grading costs in basis of card sold, you're example would be $5 cap gain, actually less, cause you could allocate portion of shipping etc to basis of card.


The gain portion would be more beneficial that way, preferable treatment of capital gains over ordinary or business income.

Plus if you are in business of cards, profit subject to self employment tax as well.


Peace

JW

This whole thing could be pretty interesting and messy from a tax perspective. Up until this point, I have really only viewed the whole thing as a hobby and expected small losses and gains. I have bought cards over time and have sold a few at a profit, but I usually only sell to buy an upgrade of the same card. It is easier to keep track of my gains and losses now that the cards are graded. What is interesting are my sets that are over ten years old and worth less than I paid or my extra singles from opened wax. Do I need to sell or donate all of my worthless singles at a loss (easy to do), so that they will offset the small gains in my PSA graded cards for tax purposes? I don't really collect modern cards, but I still love to open modern wax. I hardly ever make any money off of the few wax packs/boxes that I open. For example, I think I bought three of the small $20 wax boxes of Heritage baseball last year. I did not really get anything great and I still have them all lying around. Do I need to sell all of the cards for $5 and take a $55 loss on my income taxes? What a pain. This is where the hobby would get complicated and messy to offset my graded card gains. Does anybody else currently do this?

joestalin

There are so many more problems in this world than ma and pa selling a few cards on ebay. This very notion sickens me! What we
can't pay for our overspending so now we have to hit people trying to make a living online?? How many millions of dollars are
we sending across the world to feed countires who can't take care of themselves? How many American lives are sending across
the world, that won't come back, in order to make people's suffering less..only to have them spit in our faces? Why does it cost
50 dollars to fuel my car now, when it was only 20 a few years ago? Why are the only people in this world who are allowed to make
billions of dollars unchecked are oil companies?

The government is ticked because it has no answers to why its found itself so much in the hole. Lets tax the working man some
more, he can spare it right?????

Garbage. it would be nice to fix some real problems first, rather than this stupid issues!

JS

brumbach

It all sounds like a lot of work and time. If this comes to fruition does anyone else see less selling and more trading and holding? How many people sell for the sake of selling or flip some items on ebay to pay for up for Mastro auctions? Would you be less inclined to make these kinds of sales if they had to go through these tax hoops? I know that I would be more inclined to find a trading group and less inclined to sell off some of the higher priced items that I sell if this were the case. Not that I would even be paying taxes per se since I take a loss on many of the items that I sell, but I am a lousy record keeper and barely have the time to inventory my collection much less keep track of capital gains and declarable losses. I tend to overpay when I buy and dump stuff when I sell, definitely not the smartest thing but then again I'm not trying to run a business or turn a profit on this stuff. I'm just trying to keep it a fun hobby on my own terms.

gemint

I find it very difficult to track my hobby "income". I like to see if I'm paying for my hobby through sales of cards (mostly duplicates) but it's hard sometimes. If I pay $4500 for a 1971 set in a Mastro auction and that set books for $2500 using high Beckett, then I grade a single card from the set and sell it, how do I determine what I paid for that card??? I think the IRS or private outsource firm would spend 10x what they'd take in trying to track down these microtransactions for tens of thousands of eBayers.