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Anyone notice the Housing Assistance Act of 2008 that became law today contains this provision ?
LALASD4
Posts: 3,602 ✭✭✭
Tighter Tracking of Payments
In a blow to eBay merchants and others accepting credit cards, debit cards, or third-party payments, your merchant bank will now be required to send a report to IRS and to you with your total annual gross payment card receipts. In other words, IRS will get your total merchant credit card gross receipts for the year.
The good news:
For merchants who had always meant to catch up on bookkeeping, you will now get a report summarizing all the money you received.
This won't be effective until Jan. 1, 2011.
There will be an exemption for business with 200 or fewer transactions generating sales of $20,000 or less.
The bad news:
Like most bank reports that add up total deposits, it will be wrong. After all, there were credits you issued, and refunds that won't be reflected in the total gross receipts. Be sure to reduce the total income on that report by all the costs and fees you had too.
In the past, when IRS wanted to get information from banks and merchant accounts, it required going to a judge and getting a subpoena. With this new law in place, IRS can now step in and audit at any time -- with a little or no notice, depending on the urgency of the circumstances.
In a blow to eBay merchants and others accepting credit cards, debit cards, or third-party payments, your merchant bank will now be required to send a report to IRS and to you with your total annual gross payment card receipts. In other words, IRS will get your total merchant credit card gross receipts for the year.
The good news:
For merchants who had always meant to catch up on bookkeeping, you will now get a report summarizing all the money you received.
This won't be effective until Jan. 1, 2011.
There will be an exemption for business with 200 or fewer transactions generating sales of $20,000 or less.
The bad news:
Like most bank reports that add up total deposits, it will be wrong. After all, there were credits you issued, and refunds that won't be reflected in the total gross receipts. Be sure to reduce the total income on that report by all the costs and fees you had too.
In the past, when IRS wanted to get information from banks and merchant accounts, it required going to a judge and getting a subpoena. With this new law in place, IRS can now step in and audit at any time -- with a little or no notice, depending on the urgency of the circumstances.
Coin Collector, Chicken Owner, Licensed Tax Preparer & Insurance Broker/Agent.
San Diego, CA
San Diego, CA
0
Comments
This is going to be a logistical nightmare, especially if the IRS assumes that every incoming payment constitutes "income", e.g., I loan someone money and they pay me back via PayPal. Not income, but you can't tell that just by looking at a PayPal statement. If they're going to take that blanket approach, then any outgoing payments should automatically be considered "expenses." Bet that doesn't fly.
The 200 annual payments limit is laughably low.
1/2 Cents
U.S. Revenue Stamps
<< <i>Why would they assume that? Do they assume every stock sale is pure profit with a zero purchase price? >>
They do unless you provide cost basis information to them.
Random Collector
www.marksmedals.com
Re: 200 transactions per annum triggering reporting to the IRS: Is that 200 payments received, or 200 total transactions, i.e., if I received 10 payments but sent 190 payments, will that trigger IRS reporting?
Is only the sum of payments received being reported, or payments sent as well? On the face of it, if I received $20,000 of PayPal payments last year, that looks like a windfall... until you see that I made about $21,000 of outgoing PayPal payments. With only one side of that information, it looks like I should be sending about $7,000 to the IRS. As I read it, the IRS will only be receiving the incoming payments portion, leaving the taxpayer to have to justify to the IRS every single PayPal transaction that should not be interpreted as income; the "guilty until proven innocent" approach.
There's also some rumblings around the net (take that for what it's worth) regarding language in the bill incorporating withholding.
Ugh.
Then the state governments will want access to the information so they can collect state sales tax on all these transactions.
They sneaked one by in the guise of housing support... and it's a big one.
1/2 Cents
U.S. Revenue Stamps
<< <i>I bet many sellers will be dumping Paypal like a bad habit in 2010. >>
Ahh, but eBay makes PayPal mandatory... so many sellers will be dumping eBay as well (although that's already started).
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U.S. Revenue Stamps
People got greedy, now the tax man cometh. Big surprise!
No big deal - folks will find another way to avoid paying their bills that they owe. Just pays not to be so blatant about it.
#1 Sell everything possible in next two years.
#2 Sell Ebay short in Jan. 2011
This won't effect me as I have been very careful to report all sales and net income but I believe I am in the minority.
Problem will come when IRS receives those reports and you don't show any matching report on tax return.
It will close down some kitchen table dealers and simply scare some from using Eaby/Paypal.
Problems won't start til April 2012.
<< <i>What's the big deal? This should only concern those who cheat on their taxes. >>
Or those collectors who have purchased coins a long time ago and have no receipts for the coins, so in the eyes of the IRS, the total sale equals total profit.
San Diego, CA
Brian
I Love
A sale of a coin is viewed as a Capital Gain.
If the coin is sold under a $1,000.00 ( from anywhere between $0.01 to $999.99) then the COST of the coin is assumed to be $1,000.00 and there is NO Capital Gain to be claimed as the: Sale Price - the cost , will always = 0
However, for each and every sale of the coin that is greater than $1,000.00 then the cost must be proven by the seller, or the cost is assumed to be Zero, and the resulting Net profit must be claimed as a Capital Gain.
This also applies to any other asset: painting, furniture, collectibles, etc....
EX. $2500.00 sale and documantation of cost at $2100.00, then a Capital Gain of $400.00 is the taxable amount.
EX, (no cost documantation) if a private individual sells a coin for $2200.00 and they don't have documentation of their cost, then they must claim a Capital Gain of $2200.00 and pay the tax on this.
How does this scenario compare to the U.S. IRS laws?
"“Those who sacrifice liberty for security/safety deserve neither.“(Benjamin Franklin)
"I only golf on days that end in 'Y'" (DE59)
<< <i>
<< <i>What's the big deal? This should only concern those who cheat on their taxes. >>
Or those collectors who have purchased coins a long time ago and have no receipts for the coins, so in the eyes of the IRS, the total sale equals total profit. >>
Hogwash -- you can probably estimate the basis. At worst the IRS would make you assume the lowest FMV over the past few years if they got that picky.
<< <i>Hogwash -- you can probably estimate the basis. At worst the IRS would make you assume the lowest FMV over the past few years if they got that picky. >>
Maybe. But if you bought a $5000 coin in 1962 for $100, they may not be inclined to believe your acquisition date without proof.
<< <i>So sell on ebay and only take money orders or cash as payment. >>
Mentioning "cash" as an acceptable payment type is a quick ticket to getting the auction nuked.
I had heard the IRS was trying to get into bed with PayPal. A lot of money goes through them, so, of course the IRS wants to know what is going on. I pay my fair share of taxes, but I'll be darned if I'll pay taxes on items sold on ebaY that don't make a profit. I'll pay on my gains as I always would have, had I had any. Last time I made any profit was back a few years. I used to go to Goodwill and buy small items for under a dollar and then sell them for over a dollar on ebaY. ebaY has made that impossible with raising fees as well as Goodwill got new management and raised their prices.
At any rate, I will not be paying any taxes on items I do not make a profit. I will simply not sell items for which I do not have a cost basis and receipts to prove it.
Jonathan
<< <i>Hogwash -- you can probably estimate the basis. At worst the IRS would make you assume the lowest FMV over the past few years if they got that picky. >>
WRONG! Without documentation to prove purchase price, the entire sale amount is considered capital gain.
Better yet, let's add some complexity:
You traded for a coin lot/collection/estate in 1987, consisting of about 275 coins. Some pieces you put in your personal collection to keep. You traded some pieces with other collectors. Some of THOSE pieces were traded for others. Now after 21 years, you now have about 34 pieces left from that estate that you want to sell.
What's your basis and how do you document it to the IRS?
It's easy for the full-time dealers here who will inevitably say "You should have been keeping documentation for the last 21 years! Stop trying to cheat on your taxes, you crook!", but I'm talking about the collector selling off part of his collection or duplicates.
Many dealers start off as collectors, and in many cases by the time they make the decision to become a dealer, it's far too late to recreate the prerequisite records. This doesn't change the fact that 100% of sale price is not the actual capital gain... but not in the eyes of the IRS.
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U.S. Revenue Stamps
<< <i>I see cash mentioned all the time on ebay.It's unamerican not to accept cash as payment for anything. >>
Perhaps, but it IS against eBay's policies to accept cash for eBay sales, other than in-person sales.
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U.S. Revenue Stamps
I got some fresh cucumbers from a lady out on a farm yesterday.
Will I have to pay taxes on this or will the taxes I paid on my gas to get me to her house be sufficient ?
I don't know how to claim cucumbers but they probably cost ten bucks at the store.
What should I do ?
Signed,
Scared in Iowa about transportation of produce across state lines without a permit.
``https://ebay.us/m/KxolR5
1/2 Cents
U.S. Revenue Stamps
#1 Sell everything possible in next two years.
#2 Sell Ebay short in Jan. 2011
This won't effect me as I have been very careful to report all sales and net income but I believe I am in the minority.
Problem will come when IRS receives those reports and you don't show any matching report on tax return.
It will close down some kitchen table dealers and simply scare some from using Eaby/Paypal.
Problems won't start til April 2012.
lol, 2sides.......
But, is the best time to short ebay in Jan. 2011 or in Nov-Dec. 2011? Or maybe in March 2012.
An excellent concept, imo.
I knew it would happen.
<< <i>Dear coin forum,
I got some fresh cucumbers from a lady out on a farm yesterday.
Will I have to pay taxes on this or will the taxes I paid on my gas to get me to her house be sufficient ?
I don't know how to claim cucumbers but they probably cost ten bucks at the store.
What should I do ?
Signed,
Scared in Iowa about transportation of produce across state lines without a permit. >>
Don't forget that you owe State sales tax on those.
San Diego, CA
a coin has been dipped , ATd , puttied or gassed! Is nothing
sacred?
Camelot
<< <i>What's the big deal? This should only concern those who cheat on their taxes. >>
60 years into this hobby and I'm still working on my Lincoln set!
Haven't used one since 2006
Jim
Menomonee Falls Wisconsin USA
http://www.pcgs.com/SetRegistr...dset.aspx?s=68269&ac=1">Musky 1861 Mint Set
History of the US Constitution Coin Set
<< <i>In the past, when IRS wanted to get information from banks and merchant accounts, it required going to a judge and getting a subpoena. With this new law in place, IRS can now step in and audit at any time -- with a little or no notice, depending on the urgency of the circumstances. >>
This is not true. I know from personal experience the IRS has always had to power to issue "Administrative Summons" to require information from a bank, other business, or individual. This only has to be approved at the bottom (they call it middle) management level, and is virtually automatic if an agent says it is needed.
From my observations at coin shows and flea markets, most coin related transactions are part of the "underground economy", and are safe from government scrutiny. I have only seen checks issued for coins by some individuals and checks issued by dealers making significant purchases.
As far as an individual's basis in a coin, the IRS would very likely have to accept "contemporaneous notes" as a basis for tax purposes. An individual might have to prove that a certain amount of cash was available for a purchase. This could be documented by reported cash sales, ATM withdrawals, cashed checks, W2G's paid in cash, etc.
I don't think the IRS worries that much about collectors' making a profit on coin sales, in the same sense they don't worry about casino gamblers making a profit over the long run.
Dealers might be a different story, but again the contemporaneous records rule would apply since often their business is largely cash.
There go a few more of our rights.....
When will the erosion of our rights end?
<< <i>When will the erosion of our rights end? >>
When they are all gone.
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
<< <i>*POOF*
There go a few more of our rights.....
When will the erosion of our rights end? >>
What rights? The right to evade taxes?
What is it that you think it's wrong to shun your taxes.???You should be ashamed of yourselves.....!!!!!!
<< <i>*POOF*
There go a few more of our rights.....
When will the erosion of our rights end? >>
Sorry for the off-topic reply...
No kidding... What a joke the whole idea of an IRS is anyway. It costs a ton to operate, and criminals and people hiding money off shore don't have to pay. Ninety-nine percent of the people don't understand the tax code anyway, and the paperwork is a nightmare. I like that "Fair" tax idea, or at least a flat tax. I'd gladly pay 10% more in taxes if they would just tell me what I owe at the beginning of the year, regardless of how hard I decide to work that year, and be done with it.
Again, sorry for the rant, guys.
NGC registry V-Nickel proof #6!!!!
working on proof shield nickels # 8 with a bullet!!!!
RIP "BEAR"