I have to start at least one Ebay thread today-- the tax man is coming

Longacre · August 23, 2006 6:28AM

Did anyone see this report? As I get more information on the program, I will pass it along.

Ebay

Russ · August 23, 2006 6:32AM

<< Under current tax law, an individual who sells an item online and collects more money than its purchased value is expected to report that money as income on their tax return. >>

Duh.

Russ, NCNE

RYK · August 23, 2006 6:35AM

It sounds to me like the IRS is much further from actually being able to detect these taxable gains than I imagined. It would appear that if you keep all your sales in a PayPal account, they would have no way of recognizing them as such.

Coxe · August 23, 2006 6:42AM

I could not care less. People say I am crazy for my meticulous record keeping and payment of my taxes even on pure cash deals. I can sleep though without worries and know I am not cheating my fellow citizenry. That said, there are some loopholes they sure could fill to narrow this tax gap but that would step on the toes of bigtime campaign contributors; so we know that ain't happening. Ma and Pa Kettle selling the heirloom pitchform once owned by Jebediah Kettle 150 years ago is just a convenient target.

Longacre · August 23, 2006 6:49AM

If everyone just paid their fair share, there would be more than enough money to go around.

Russ · August 23, 2006 6:54AM

<< If everyone just paid their fair share, there would be more than enough money to go around, and even enough to fund that quagmire on the other side of the world. >>

The politicians would just spend it and more.

Russ, NCNE

HonoluluDude · August 23, 2006 6:58AM

<< and even enough to fund that quagmire on the other side of the world. >>

Now, why would we wanna do that?

ziggy29 · August 23, 2006 6:59AM

<< 

<< and even enough to fund that quagmire on the other side of the world. >>

Now, why would we wanna do that? >>

Uh-oh. Looks like this thread may be destined to be moved to the OF.

Longacre · August 23, 2006 7:05AM

I don't want the thread to go off track. Let me edit it right now.

coyotelittle · August 23, 2006 7:07AM

<< If everyone just paid their fair share, there would be more than enough money to go around, and even enough to fund that quagmire on the other side of the world. >>

If we americans would get off of our glutious, show our disgust with the politicians and stop giving aid to nations that use our aid to bomb and destroy their enemies and then turn those weapons on us, we wouldn't need such taxes

RichieURich · August 23, 2006 7:11AM

<< 

<< If everyone just paid their fair share, there would be more than enough money to go around, and even enough to fund that quagmire on the other side of the world. >>

The politicians would just spend it and more.

Russ, NCNE >>

I agree with Russ.

RVDavis · August 23, 2006 7:12AM

<< I don't want the thread to go off track. Let me edit it right now. >>

I'm sorry you edited it out but I will respect the intent and not comment. I pay all of my taxes, and often feel like an idiot because I don't dodge or avoid. Sure, I don't have to worry about the IRS knocking at my door but they make it so tempting to cheat or simply fail to file or pay.

BlindedByEgo · August 23, 2006 7:15AM

Ma and Pa Kettle have been treating Ebay sales like a big garage sale since the beginning. Sadly, so have a lot of Power Screwers™.

I don't know if the revenue shortfall is carried as an asset on the government books, but I assume that the money is already spent, even if not collected. So the IRS making an effort to collect the shortfall would in a perfect world prevent raising additional taxes to cover the shortage.

It's not shocking to me that the IRS wants everyone to pay their liabilities; it's just that you know that compliance will be enforced with a heavy hand. Examples must be made to scare the majority into voluntary compliance. No doubt it will be ugly.

Russ · August 23, 2006 7:18AM

<< Sure, I don't have to worry about the IRS knocking at my door but they make it so tempting to cheat or simply fail to file or pay. >>

Just because you cross all the t's and dot all the i's doesn't mean the IRS won't come knocking at your door. I've been audited three times, starting with the very first year I went in to business.

Russ, NCNE

RVDavis · August 23, 2006 7:20AM

<< 

<< Sure, I don't have to worry about the IRS knocking at my door but they make it so tempting to cheat or simply fail to file or pay. >>

Just because you cross all the t's and dot all the i's doesn't mean the IRS won't come knocking at your door. I've been audited three times, starting with the very first year I went in to business.

Russ, NCNE >>

Excellent point Russ I have been through the same deal. At least I know that I don't have to worry about drowning in flop sweat while the auditor questions what business reason I had to spend $ 50,000 at the Mustang Ranch. Or whatever. Every time I have gone through an audit (3 times) the IRS owed me money back.

Conder101 · August 23, 2006 7:30AM

<< So the IRS making an effort to collect the shortfall would in a perfect world prevent raising additional taxes to cover the shortage. >>

Unfortunately this isn't a perfect world so if they are able to come up with the extra money to cover the shortfall, they will just spend it too and go ahead with the tax increase.

BlindedByEgo · August 23, 2006 7:37AM

<< 

<< So the IRS making an effort to collect the shortfall would in a perfect world prevent raising additional taxes to cover the shortage. >>

Unfortunately this isn't a perfect world so if they are able to come up with the extra money to cover the shortfall, they will just spend it too and go ahead with the tax increase. >>

I only disagree in that it's already spent. Deficit financing, remember?

The US Government is so far in a hole, a "$345 billion tax gap" seems like a drop in the bucket. And that's not meant as a political statement, just a statement of reality.

Russ · August 23, 2006 7:42AM

<< At least I know that I don't have to worry about drowning in flop sweat >>

I sure was the first time.

The audit was triggered because I had significant tax-loss carrybacks in to previous year's W-2 income. I was pretty sure I had my ducks in a row, but it still scared the crap out of me. No changes, though, and the next two times didn't even raise my pulse rate.

Russ, NCNE

291fifth · August 23, 2006 7:45AM

The IRS will also find another problem...the people who are selling their own personal property are doing nothing more than recovering some of their original cost. They are making nothing and, in fact, are probably losing significant amounts.

An example: Last year I sold a large portion of my art and photo book library on eBay. I did very well compared with what I would have gotten from a used book dealer. Regardless, I still lost a lot of money on the books.

Coxe · August 23, 2006 7:49AM

<< The IRS will also find another problem...the people who are selling their own personal property are doing nothing more than recovering some of their original cost. They are making nothing and, in fact, are probably losing significant amounts.

An example: Last year I sold a large portion of my art and photo book library on eBay. I did very well compared with what I would have gotten from a used book dealer. Regardless, I still lost a lot of money on the books. >>

Good point. Not sure how anal they will be on proving the cost basis though on those things. Most people don't keep many receipts or records and sure can't find them in time for an audit.

Russ · August 23, 2006 7:54AM

No receipts = zero cost basis.

Russ, NCNE

PerryHall · August 23, 2006 7:56AM

<< No receipts = zero cost basis.

Russ, NCNE >>

What about face value?

Coxe · August 23, 2006 8:02AM

I am aware of one person having their cost bases reduced to face value on coins by the IRS. They will accept records if they are complete and overwhelmingly supported by documentation/receipts. A missing receipt out of hundreds isn't always a huge issue if you can cite from whom you bought it, when and for how much. In fact, you cannot always get a receipt from some sellers. Another issue can be individual cost basis of a coin purchased in a multiple coin deal.

Bryan1315 · August 23, 2006 8:11AM

wonder if we lose money on a sale if we can write that off as a loss?

Coxe · August 23, 2006 8:15AM

<< wonder if we lose money on a sale if we can write that off as a loss? >>

Of course you can and should.

PerryHall · August 23, 2006 8:17AM

<< 

<< wonder if we lose money on a sale if we can write that off as a loss? >>

Of course you can and should. >>

You can write off loses up to the profits you are declaring.

ibzman350 · August 23, 2006 8:19AM

<<business reason I had to spend $ 50,000 at the Mustang Ranch. >>

Hey, I've been to the Mustang Ranch, back in 1972, didn't spent 50 large though.

I think the whole (did I used the proper word here) ride including cab fare was under 100 bucks.

to keep it coin related..................no I did not find this coin at the ranch.

Herb

Bryan1315 · August 23, 2006 8:19AM

since I am on disability I do not file taxes I was just wondering if that would work both ways

Russ · August 23, 2006 8:26AM

<< You can write off loses up to the profits you are declaring. >>

Unless you're a business with no personal w-2 income. Then you can write off losses, whether you have a profit or not.

Russ, NCNE

BlindedByEgo · August 23, 2006 8:45AM

This thread triggered an interesting discussion with my CFO.

Oy. Now my head is spinning. More than I ever wanted to know

His bottom line is that, for the average Joe selling personal property on Ebay, that the IRS realizes that all personal property has some basis - they won't automatically assume zero if you don't have receipts.

On coins with no receipts, you assert a basis based upon reason (price lists of the coin from about the time you bought it, other market documentation).

On multiple coin lot buys, prorate values on the entire inventory.

Reasonableness seems to be the watchword... He says the fact that you even report a profit puts you way ahead of most. This really only goes for hobby level sellers - the garage sale type.

I may go back to drinking now.

keets · August 23, 2006 8:53AM

Facing a $345 billion tax gap, the Internal Revenue Service has set its sights on a new target - the rapidly expanding world of online business.

that's right, what a good approach. let's get nickels and dimes from all the average Joes out there cause everyone knows if they stop giving all the gazillionaires a free ride the economy will crash., just like everyone knows that Democracy will die if we leave Iraq.

quick, someone do the math and tell me how fast we could make up the difference of that tax shortage by taking an Iraq attack break. in days please!!!!

tjkillian · August 23, 2006 9:13AM

We are currenly wasting $1.5Billion a week, therefore it would take 1614 days.

Imagine the collection you'd have if you spent just 10% of what the government is spending in Iraq.

Tom

keets · August 23, 2006 9:34AM

so it would seem that the tax gap is a result of the Iraq expenditure. funny how these things work out, ain't it??

LEAP269 · September 11, 2006 1:51PM

keets
you said

that's right, what a good approach. let's get nickels and dimes from all the average Joes out there cause everyone knows if they stop giving all the gazillionaires a free ride the economy will crash

you need to work on your facts. apparently you think the avg joe is the one paying all the taxes. that is just what the drive-by media wants you to believe. here is the truth: the last calendar year for which data are available(2003) shows the top 50% of wage earners pay 97% of all federal tax receipts. so for you, that means the bottom half of all wage earners pay just 3% of all taxes to the federal govt. now does that sound like you have a clue to what you are referring? the very lowest wage earners actually get more money back(a larger refund) then they pay in taxes. so who is getting the free ride here? it is not the people in the higher tax brackets.

before you start spewing forth the liberal template, use your common sense and think for yourself.

respectfully submittted by a thinker- not a feeler
leap269

ABC123 · September 11, 2006 9:17PM

Everything, is just a Matter of Time !--A.Einstein

Derek2100 · September 11, 2006 9:38PM

The rare coin business for me is a schedule C filing which permits me to deduct the overhead expenses of the business as well as inventory cost. I keep detailed records of all transactions. In addition I have W2 and 1099 filing from other income sources.

I think whatever you do electronically whether paypal, ebay, or your bank account has the potential to be accessed by an auditor. Consequently I would urge you to keep detailed records. I would suggest a file of all purchase invoices in one place so that you have the necessary documentation to substantiate inventory and cost of sales. Schedule C uses the peridic inventory method - Beginning Inventory + Purchases - Ending Inventory = Cost of Sales. I would also suggest you keep track of sales and their cost using the perpetual method also to guage gross margin and monthly P&L.

Barndog · September 11, 2006 9:50PM

<< 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. >>

BS, individuals realize fully their obligations to pay taxes on these sales...they often choose not to do so!

pendragon1998 · September 12, 2006 12:10AM

Americans for Fair Taxation

LEAP269 · September 12, 2006 1:37AM

it is about time for some common sense fair flat tax steve forbesesqe discussions

keets · September 12, 2006 3:20AM

..........if they stop giving all the gazillionaires..........

..........the top 50% of wage earners..........

so what's the point?? you seem to have missed part of what i said unless it's your impression that 50% of the wage earners are "gazillionaires" by definition. are you actually so full of yourself that you need to indict me for something you misread or didn't understand, place a label on me that's totally incorrect and then draw my attention to it via PM so you can flatter yourself?? what a freakin' troll!!!

i find it ironic that you've posted in such proximity to an alt troll like Derek2100. what's your real ID??

aside from the fact that you seem to be a total idiot, what can you can contribute in the way of anything having to do with coins?? post a picture, start a thread, open your profile or do something of substance. better yet, PM yourself with some sage advice since you tend to like what you have to say.

also, next time try to read and comprehend, it's very simple:

ga-zillionaire is a hybrid i chose to use but that i can't take credit for coining.
Ga----–a Kwa language of Ghana, spoken in Accra and vicinity.

zil-lion-aire----a person of incalculably great wealth.

clear things up any for you??

I have to start at least one Ebay thread today-- the tax man is coming

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