Options
2011 tax changes for ebay sellers
derryb
Posts: 38,586 ✭✭✭✭✭
This is strictly about paypal's 2011 IRS reporting requirements and does not include discussion on the 2012 requirement for 1099's for purchases over $600. Some good information on reporting limits that ebay sellers need to be aware of. Just make sure your 2011 Schedule C sales equals or exceeds what your 2011 paypal 1099-K shows.
eBay Sellers and Tax Changes
Edited to add:
Draft copy of 2011 1099-K
Another concern for the ebay coin dealer is quarterly taxes. The new 1099-K provides the IRS a monthly breakdown of payments to the paypal account holder throughout the tax year. In discussions I have had with the IRS in the past it is the IRS's position that taxes are due on a quarterly basis, not an annual basis. This does not affect the person being payed wages because their estimated taxes are withheld everytime they get paid. But for a business (and those receiving IRS reported paypal funds) taxes are not being withheld at time of payment. The IRS expects quarterly tax payments and this explains the requirement for paypal to report monthly payments into the paypal account. Be aware that you may be penalized by the IRS if they determine, based on the 1099-K's monthly figures, that you should have been making quarterly tax payments. Unfortunately you won't see the 1099-K's monthly figures until the end of the year when you receive the form. It is your responsibility to track quarterly income during the year and pay estimated quarterly federal taxes on it. You will be credited your quarterly tax payments on your year end return just like the wage earner is credited with what was withheld from his paycheck throughout the year.
All of this is not that complicated for the ebay seller working from his home, it can all be researched and figured out at the IRS website. You do not have to run out and hire an accountant if you are capable of researching, understanding and compying with the requirements.
eBay Sellers and Tax Changes
Edited to add:
Draft copy of 2011 1099-K
Another concern for the ebay coin dealer is quarterly taxes. The new 1099-K provides the IRS a monthly breakdown of payments to the paypal account holder throughout the tax year. In discussions I have had with the IRS in the past it is the IRS's position that taxes are due on a quarterly basis, not an annual basis. This does not affect the person being payed wages because their estimated taxes are withheld everytime they get paid. But for a business (and those receiving IRS reported paypal funds) taxes are not being withheld at time of payment. The IRS expects quarterly tax payments and this explains the requirement for paypal to report monthly payments into the paypal account. Be aware that you may be penalized by the IRS if they determine, based on the 1099-K's monthly figures, that you should have been making quarterly tax payments. Unfortunately you won't see the 1099-K's monthly figures until the end of the year when you receive the form. It is your responsibility to track quarterly income during the year and pay estimated quarterly federal taxes on it. You will be credited your quarterly tax payments on your year end return just like the wage earner is credited with what was withheld from his paycheck throughout the year.
All of this is not that complicated for the ebay seller working from his home, it can all be researched and figured out at the IRS website. You do not have to run out and hire an accountant if you are capable of researching, understanding and compying with the requirements.
Government is the great fiction through which everybody endeavors to live at the expense of everybody else. - Bastiat
0
Comments
Government Crackdown on Trinket Sellers
Government is the great fiction through which everybody endeavors to live at the expense of everybody else. - Bastiat
Didn't wanna get me no trade
Never want to be like papa
Working for the boss every night and day
--"Happy", by the Rolling Stones (1972)
<< <i>Another headache brought to you by the US Government. >>
This particular one isn't a headache - unless, of course, one has not been reporting their eBay income.
The one following, with the 1099 requirement for everybody, will be a huge headache.
Russ, NCNE
Government is the great fiction through which everybody endeavors to live at the expense of everybody else. - Bastiat
<< <i>I wonder if this will create a logjam of new multiple accounts at paypal. >>
No. PayPal will be collecting SSN and EIN numbers, so trying to set up multiple accounts won't work to defeat the reporting requirement.
Russ, NCNE
<< <i>So, to recap... I'm going to have to report my income, just like I always do because it's always been the law? >>
What "law" exactly?
Go look into history of this country and how it began and read the Constitution. What most people think of the money system is totally backwards.
Secrets of Oz
<< <i>What "law" exactly? >>
Tax law that requires you to pay taxes on income. Correct, that hasn't been the law for all time, but find me someone on this board for whom Federal income tax hasn't always been the law. If you made money selling on eBay last year, you owe taxes on the profit, just as you do this year, and just as you will next year. The government making it harder to evade those taxes is not evil.
If you don't agree with the taxes, vote. But to say that it's evil to enforce a law already on the books is ludicrous. If nothing else, it levels the playing field for those who already pay by the rules. Why should others doing the same thing as me be able to avoid taxes? This isn't a political discussion, because sure, I'd love to owe fewer or no taxes. But, as it stands, the law says I owe taxes, so therefore I pay them, and so should everyone else. As my mother/CPA points out, you don't have to pay taxes if you don't make any money, so take your pick.
The only thing I am concerned about is personal sales. If I sell my son's clarinet or an old golf club on ebay, will I get a 1099 for that since I am a coin dealer? I hope I don't have to keep a receipt for everything I may one day want to sell on ebay.
--Jerry
<< <i>THis will make doing my taxes easier. I like it.
The only thing I am concerned about is personal sales. If I sell my son's clarinet or an old golf club on ebay, will I get a 1099 for that since I am a coin dealer? I hope I don't have to keep a receipt for everything I may one day want to sell on ebay.
--Jerry >>
Paypal will be reporting gross proceeds into the account. Might be a good idea to have a second ebaypaypal account with another family member's SSN for the "garage" sale of personal items. As long as it stays under 200 transactions and $20,000, paypal is not required to report it.
Government is the great fiction through which everybody endeavors to live at the expense of everybody else. - Bastiat
<< <i>
<< <i>I wonder if this will create a logjam of new multiple accounts at paypal. >>
No. PayPal will be collecting SSN and EIN numbers, so trying to set up multiple accounts won't work to defeat the reporting requirement. >>
But will they verify that the numbers provided are accurate?
60 years into this hobby and I'm still working on my Lincoln set!
<< <i>Looks like Ebay may be a good stock to short. I bet the majority of big sellers survive on the tax avoidance margins. With Ebay and paypal fees tacked on to the now accounting nightmare for selling 1,000 $2 items, its going to put the stop to quite a few sellers. This will impact earnings for Ebay, and Paypal (owned by Ebay). >>
Plenty of software can easily track inventory and fees, including eBay listing tools that a lot of high-volume sellers use. I download PayPal transactions into Quicken, and it comes split with the full payment and fee separated to give the net income per payment, and that's easy to track.
The only thing annoying for me with recording sales is breaking out the fees per item so I can create customer reports; this takes legwork, especially when I have to evenly divide PayPal fees when multiple items are paid for in one transaction. But if I sold tons of cheap widgets that I owned, all I'd need to know are gross income, net cost of the items, and net fees, which are all easily obtained.
<< <i>
<< <i>
<< <i>I wonder if this will create a logjam of new multiple accounts at paypal. >>
No. PayPal will be collecting SSN and EIN numbers, so trying to set up multiple accounts won't work to defeat the reporting requirement. >>
But will they verify that the numbers provided are accurate? >>
The likely answer is yes. PayPal already periodically runs credit reports on users who do enough volume to warrant it. I'd assume they will do so for anybody who meets the reporting threshhold, and the number provided will have to match the account holder name.
Russ, NCNE
<< <i>
<< <i>What "law" exactly? >>
Tax law that requires you to pay taxes on income. Correct, that hasn't been the law for all time, but find me someone on this board for whom Federal income tax hasn't always been the law. If you made money selling on eBay last year, you owe taxes on the profit, just as you do this year, and just as you will next year. The government making it harder to evade those taxes is not evil.
If you don't agree with the taxes, vote. But to say that it's evil to enforce a law already on the books is ludicrous. If nothing else, it levels the playing field for those who already pay by the rules. Why should others doing the same thing as me be able to avoid taxes? This isn't a political discussion, because sure, I'd love to owe fewer or no taxes. But, as it stands, the law says I owe taxes, so therefore I pay them, and so should everyone else. As my mother/CPA points out, you don't have to pay taxes if you don't make any money, so take your pick. >>
The concern is having to give out your SNN every time you do more than $600/year of business with a coin dealer or other business. Ever hear of identity theft?
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>As a practical matter, if you're an eBay seller, this will effect you unless your gross sales are under $20,000 for the year or you receive fewer than 200 transactions. Reporting for small sellers at this level is not required. >>
I could slowly do my whole collection and not worry.
<< <i>The concern is having to give out your SNN every time you do more than $600/year of business with a coin dealer or other business. Ever hear of identity theft? >>
And that is completely irrelevant to the topic being discussed.
<< <i>
<< <i>What "law" exactly? >>
Tax law that requires you to pay taxes on income. Correct, that hasn't been the law for all time, but find me someone on this board for whom Federal income tax hasn't always been the law. If you made money selling on eBay last year, you owe taxes on the profit, just as you do this year, and just as you will next year. The government making it harder to evade those taxes is not evil.
If you don't agree with the taxes, vote. But to say that it's evil to enforce a law already on the books is ludicrous. If nothing else, it levels the playing field for those who already pay by the rules. Why should others doing the same thing as me be able to avoid taxes? This isn't a political discussion, because sure, I'd love to owe fewer or no taxes. But, as it stands, the law says I owe taxes, so therefore I pay them, and so should everyone else. As my mother/CPA points out, you don't have to pay taxes if you don't make any money, so take your pick. >>
WHAT LAW? Tell me where I can find this personal income law.
So... George Washington and Andrew Jackson paid personal income tax? Is this what they they're teaching kids in school today?
If you know anything about history of this country or read the US Constitution, you would know that there is no income tax law on US citizens. There never was and there still is not. It's all fraudulent and enforced by a private bank called the "Federal Reserve" and their thugs the IRS - all about as "Federal" as Federal Express.
Ask your Mom the CPA to watch this video and to tell you where the law is and you come tell me where I can find this law. I would really like to know.
Freedom to Fascism
And here's the Constitutional amendment that makes the above legal: "The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration."
With stocks, we can offset our profits with our loses, will we be able to do that for ebay ?
If gold went down to $600 and I paid $1500 for a AGE and I can only sell it for $1000, is that a capital loss ?
Of course this isn't only for coins, what if I don't have documents of what a bought a widget for 10 years ago?
Like if I sell my TV. I paid $1500 for it 10 years ago. I sell it for $100 on ebay. Is that $1400 off my profit?
What about PCGS fees, gas to the post office, boxes, scale, a safe to store my stuff, PO Box, Safe deposit box, my computer when used for ebay transactions, is that a business expense? What's the depreciation rate on my computer or anything else I use or anything I sell? What if I sell my computer on ebay for $100, one that I paid $1000.
I think we'll need a little more documentation than the paragraph provided.
You can't just say; you sold $22,000 on ebay, pay tax.
Gains on collectables, even long term are taxed at the marginal rate. Even ETF's on Gold and Silver have the same tax treatment.
Now if you run it as a business using Schdule C, then you can have losses on single or multiple items.
Ike Specialist
Finest Toned Ike I've Ever Seen, been looking since 1986
<< <i>No such thing as a capital loss on a collectable. You can't even use it to offset gains.
Gains on collectables, even long term are taxed at the marginal rate. Even ETF's on Gold and Silver have the same tax treatment.
Now if you run it as a business using Schdule C, then you can have losses on single or multiple items. >>
I didn't see where it said 'collectable'.
Why be upset? You'll still get thousands of tax free income. $20,000 isn't enough?
I'm a collector not a dealer. When I find an upgrade for my collection, I sell the other piece. Some of them I make a little on, and some of them I lose a little on. If I have to start filing extra forms, you can forget about me ever selling another thing on Ebay.
Change you can believe in.
E-Bay is just the tip of the iceberg
Ike Specialist
Finest Toned Ike I've Ever Seen, been looking since 1986
<< <i>What about PCGS fees, gas to the post office, boxes, scale, a safe to store my stuff, PO Box, Safe deposit box, my computer when used for ebay transactions, is that a business expense? What's the depreciation rate on my computer or anything else I use or anything I sell? What if I sell my computer on ebay for $100, one that I paid $1000. >>
If you use them primarily for a business purpose.
If you have $100 into a coin and spend $30 to grade it, your cost is $130. Profit is anything above $130.
I write off my PO Box because it's my business address. My camera was purchased for my photography business. If you want to, you can even write off the mileage to and from the Post Office. If you keep records, yes, you can write off business expenses as such.
"No such thing as a capital loss on a collectible"?
So I go to New York for the weekend to catch a show
and dinner . During the day , I wander into an art gallery ,
and get talked into purchasing a painting for $ 2850 .
About a year after , I dont quite like it so much , and
decide to sell . A gallery offers me $ 2200 . I should be
able to show a $650 loss on my schedule D .
<< <i>OK > What am I missing? "No such thing as a capital loss on a collectible"? So I go to New York for the weekend to catch a show and dinner . During the day , I wander into an art gallery , and get talked into purchasing a painting for $ 2850 . About a year after , I dont quite like it so much , and decide to sell . A gallery offers me $ 2200 . I should be able to show a $650 loss on my schedule D . >>
The answer is......NO!
You did not buy it as an investment. So the answer per the Code is NO.
If you can demonstrate that you buy collectibles as an investment or intended to purchase this painting strictly as an investment then the answer is yes.
This is my opinion as a CPA in New York, PA and Ohio in which I have now practiced for about 30 years. It is backed up my my repeated research into this area as a coin collector and a collector of many collectibles.
<< <i>
<< <i>OK > What am I missing? "No such thing as a capital loss on a collectible"? So I go to New York for the weekend to catch a show and dinner . During the day , I wander into an art gallery , and get talked into purchasing a painting for $ 2850 . About a year after , I dont quite like it so much , and decide to sell . A gallery offers me $ 2200 . I should be able to show a $650 loss on my schedule D . >>
The answer is......NO!
You did not buy it as an investment. So the answer per the Code is NO.
If you can demonstrate that you buy collectibles as an investment or intended to purchase this painting strictly as an investment then the answer is yes.
This is my opinion as a CPA in New York, PA and Ohio in which I have now practiced for about 30 years. It is backed up my my repeated research into this area as a coin collector and a collector of many collectibles. >>
How do you demonstrate/prove you bought something with the intent to make money on it rather than you just liked it. Is it just a matter of saying it was an investment and you lost money on it when you sold it?
<< <i>
<< <i>OK > What am I missing? "No such thing as a capital loss on a collectible"? So I go to New York for the weekend to catch a show and dinner . During the day , I wander into an art gallery , and get talked into purchasing a painting for $ 2850 . About a year after , I dont quite like it so much , and decide to sell . A gallery offers me $ 2200 . I should be able to show a $650 loss on my schedule D . >>
The answer is......NO!
You did not buy it as an investment. So the answer per the Code is NO.
If you can demonstrate that you buy collectibles as an investment or intended to purchase this painting strictly as an investment then the answer is yes.
This is my opinion as a CPA in New York, PA and Ohio in which I have now practiced for about 30 years. It is backed up my my repeated research into this area as a coin collector and a collector of many collectibles. >>
You must report all capital gains (personal and investment), however you may deduct capital losses only on investment property, not on property held for personal use. The fact that you have the receipt for your art purchase and the receipt for its sale in your tax records should establish it as investment property. The fact that you stored it on the wall of your den while in your possession is irrelevant.
This may be the only investment you ever made in your life so "demonstrating that you buy collectibles as an investment" is not feasable. Your maintaining records of purchase and sale, as well as any associated expenses, demonstrate your intent to invest.
Government is the great fiction through which everybody endeavors to live at the expense of everybody else. - Bastiat
<< <i>Plenty of software can easily track inventory and fees, including eBay listing tools that a lot of high-volume sellers use. I download PayPal transactions into Quicken, and it comes split with the full payment and fee separated to give the net income per payment, and that's easy to track.
The only thing annoying for me with recording sales is breaking out the fees per item so I can create customer reports; this takes legwork, especially when I have to evenly divide PayPal fees when multiple items are paid for in one transaction. But if I sold tons of cheap widgets that I owned, all I'd need to know are gross income, net cost of the items, and net fees, which are all easily obtained. >>
I use a customized Excel Spreadsheet and only itemize cost, sale price, paypal fees and postage for each item to get a good idea of profit/loss per item. My Ebay fees and grading fees are reported as seperate "group" expenses based on totals paid for the year. Too much of a nightmare to break down per item ebay fees, especially when items were listed at a cost and didn't sell. Since I am not that concerned about profit and loss figures "to the penny" on each item, this works best for me. You could get carried away trying to figure true profit on each item by including how much shipping tape was used, how many pages of paper in hard copies and how much ink on each page. Gotta draw the line somewhere on line items and record the rest as a "group" expense. I still get the "to the penny" bottom line total for the year on my Schedule C when I include all of my "group" expenses.
Government is the great fiction through which everybody endeavors to live at the expense of everybody else. - Bastiat
<< <i>As a long time tax evader and money launderer, I'm not happy about this. Ebay will be of little use. Hello Craiglist. >>
A good friend met his wife on Craiglist. Says she makes more money than he does!
Government is the great fiction through which everybody endeavors to live at the expense of everybody else. - Bastiat
YOU CAN NOT WRITE OFF LOSSES.
I lokked into this question very deeply when i was considering putting a coin fund together. It can't be done.
Call you stock broker and ask about ETF silver funds and ask them what the long term tax rate is. Clearly that is an investment, and I think you'll find that the long term tax rate is your marginal tax rate.
Ike Specialist
Finest Toned Ike I've Ever Seen, been looking since 1986
<< <i>I would triple check the art or other collectables purchased as an investment????
YOU CAN NOT WRITE OFF LOSSES.
I lokked into this question very deeply when i was considering putting a coin fund together. It can't be done.
Call you stock broker and ask about ETF silver funds and ask them what the long term tax rate is. Clearly that is an investment, and I think you'll find that the long term tax rate is your marginal tax rate. >>
Stocks held less than a year, are taxed at your marginal tax rate. I"m not sure what you are trying to correlate here.
1. In finance, the purchase of a financial product or other item of value with an expectation of favorable future returns. In general terms, investment means the use money in the hope of making more money.
2. In business, the purchase by a producer of a physical good, such as durable equipment or inventory, in the hope of improving future business.
If I buy a Van Gogh, my expectation is that I will have a favorable future return. Thus if I sell it for less on ebay, I can write it off.
You can not take a loss on collectables, and gains are always taxed at the marginal tax rate, no matter how long they ave been held.
This gain in bullion and EFT's is just like all other collectables.
Take cars as another example of a collectable. You buy a classic corvette and sell it 3 years later for a loss. Try taking a write off for that!!!
Ike Specialist
Finest Toned Ike I've Ever Seen, been looking since 1986
<< <i>I would triple check the art or other collectables purchased as an investment????
YOU CAN NOT WRITE OFF LOSSES.
I lokked into this question very deeply when i was considering putting a coin fund together. It can't be done. >>
From the IRS website, Publication 550: "Gold, silver, stamps, coins, gems, etc. These are capital assets except when they are held for sale by a dealer. Any gain or loss from their sale or trade generally is a capital gain or loss." My comment: When held for sale by a dealer they are inventory and profit or loss from their sale is reported on Schedule C.
Also from the same IRS Publication: "Collectibles gain or loss. This is gain or loss from the sale or trade of a work of art, rug, antique, metal (such as gold, silver, and platinum bullion), gem, stamp, coin, or alcoholic beverage held more than 1 year."
Appears the IRS DOES allow the write off of losses on collectibles but remember there is a $3000 limit per year on investment capital losses with the remainder rolled over to following years. The dealer has the advantage on this (using Schedule C instead of Schedule D) because he is not limited to $3000 annual losses on his inventory.
Government is the great fiction through which everybody endeavors to live at the expense of everybody else. - Bastiat
I knew it would happen.
<< <i>Take cars as another example of a collectable. You buy a classic corvette and sell it 3 years later for a loss. Try taking a write off for that!!! >>
My buddy restores and sells cars. Gave him a call about this and he says he has taken capital losses on come cars and the losses subtract from his capital gains for the year.
Government is the great fiction through which everybody endeavors to live at the expense of everybody else. - Bastiat
Your buddy has a business. You can write off losses that way. All my comments refer to individuals.
So then what makes a car a collectable??? How about my brand new corvette. I buy it as an investment hoping it will go up in value. I sell it a few years later at a loss. There is no way you can write that off period. If you think that is the case, then help me define investment when it comes to collectables? if it's jsut a matter of you saying it;s an investment, that what stops everyone from saying everything they buy is an investment???
You collect coins, it's a hobby, just like beanie babies or anything else. These are not considered investments.
Where is a tax CPA when we need one that can cut thru all the bull???
Ike Specialist
Finest Toned Ike I've Ever Seen, been looking since 1986
Schedule D, Capital Gains and Losses, is used for individuals reporting a gain on a capital assets, both investment and personal use, and for for reporting captial losses on capital assets not held for personal use. The fact that you drive your car makes it a captial asset held for personal use and therefore not eligible for a capital loss. However, the IRS would expect you to report any gain on the sell of the car and would hold you liable for taxes on that gain.
If you held your new corvette in storage and did not use if for personal use, then you could treat it as an personal investment (just likes stocks and bonds)and write of any future loss as well as storage, insurance and maintenance expenses, on Schedule D. What makes it an investment is: (1) it is not for personal use and (2) you maintain financial records on it from time of purchase until time of sale. No different if were a work of art, stocks and bonds, a baseball card collection or a bar of gold.
Individuals not in business use Schedule D to report personal gains and losses.
Individuals running a business and other forms of businesses show their profit and loss on Schedule C. If you buy and sell coins (or cars) as an individual you are much better off treating yourself as a business to take advantage of tax rules that don't limit you to $3000 per yer in capital losses, let you write off expenses, and allow you to contribute to your retirement future via self employment tax.
A CPA did chime in above and stated that losses were not allowed on collectibles unless they were held as an investment. The IRS does not define investment in it's glossary of terms. The American Heritage Dictionary defines it as "Property or another possession acquired for future financial return or benefit." As I stated earlier, maintanance of financial records on it from time of purchase until time of sale and not holding it for personal use (IRS requirement) make it an investment.
Government is the great fiction through which everybody endeavors to live at the expense of everybody else. - Bastiat
So, as coins are concerned, this piece was struck one hundred years before my high school graduation..., by the U.S. Mint in Philadelphia (the city of brotherly love ) , Pennsylvania. I learned how to type then, too
https://acoinshop.com/ —-> https://ebay.us/m/KxolR5
<< <i>
<< <i>
<< <i>I wonder if this will create a logjam of new multiple accounts at paypal. >>
No. PayPal will be collecting SSN and EIN numbers, so trying to set up multiple accounts won't work to defeat the reporting requirement. >>
But will they verify that the numbers provided are accurate? >>
The IRS will notify Paypal of the inaccurate SSN and EIN Numbers. After some verification Paypal will then be required to withold taxes on all payments to accountholders with bad SSN and EIN numbers.
These are the same procedures currently in place for 1099s, it is called backup witholding.
<< <i>So, to recap... I'm going to have to report my income, just like I always do because it's always been the law? I suppose this would be a problem if I'd been enjoying tax evasion, but since I keep meticulous records, as any business should, there's nothing new here, except for PayPal having to mail me another piece of paper. The worst thing that could come from this is PayPal deciding to raise their fees because the cost of mailing the 1099s is too great for them to bear. >>
I agree with your take on this situation.
<< <i>Then you'll love Mish's take on the matter:
Government Crackdown on Trinket Sellers >>
The blog was written by an idiot.
The new requirement has NOTHING to do with eBay or "200 items" sold in a year.
Whether or not reporting is REQUIRED by payment processors is a 2-pronged test and you have to meet BOTH requirements for the processor to report your data to the IRS:
1. 200 transactions per year.
2. $20,000 in payments received in the same year.
Examples:
1. 5 transactions totalling $35,000 - not required to be reported.
2. 872 transactions totalling $17,000 - not required to be reported.
3. 257 transactions totalling $21,000 - required to be reported.
Note that the letter of the law only REQUIRES reporting above the above threshholds. A payment processor could conceivably voluntarily report any payee at any threshold, e.g., 3 transactions totalling $9.87 for the year.
Once the reporting mechanism is in place and the kinks worked out, it would not surprise me to see the threshholds lowered in an attempt to generate more income.
As posted by many people above, the $600 1099 generation requirement is far more onerous. There have been attempts to repeal that portion of the Healthcare legislation, but the current majority party voted it down. Hopefully the repeal will be initiated after the November elections.
1/2 Cents
U.S. Revenue Stamps
<< <i>The blog was written by an idiot. >>
name calling really not necessary, just say you disagree with the blogger. I can disagree with you without calling you an idiot.
<< <i>The new requirement has NOTHING to do with eBay or "200 items" sold in a year >>
The new requirement DEFINITELY affects sellers on ebay who receive payments via paypal and the OP was made to make forum members who sell coins on ebay aware that they will be caught if they are not reporting their income.
<< <i>Whether or not reporting is REQUIRED by payment processors is a 2-pronged test and you have to meet BOTH requirements for the processor to report your data to the IRS >>
Wrong. Per the Federal Register, 26 CFR (Code of Federal Regualtions) Vol. 75, No. 157, page 49827, "Further, section 6050W(e) provides a de minimis exception that exempts third party settlement organizations from reporting transactions with respect to a payee if the aggregate amount of such transactions does not exceed $20,000 or the aggregate number of such transactions does not exceed 200." The key word here is OR, notice that they did not say AND.
29 CFR, Final Ruling
<< <i>As posted by many people above, the $600 1099 generation requirement is far more onerous. There have been attempts to repeal that portion of the Healthcare legislation, but the current majority party voted it down. Hopefully the repeal will be initiated after the November elections. >>
As pointed out in the OP this thread deals with next year's tax change only and it's affect on forum members who sell coins on ebay. This was intentional to avoid confusing the issue with two different 1099 requirements.
Government is the great fiction through which everybody endeavors to live at the expense of everybody else. - Bastiat
<< <i>
<< <i>Whether or not reporting is REQUIRED by payment processors is a 2-pronged test and you have to meet BOTH requirements for the processor to report your data to the IRS >>
Wrong. Per the Federal Register, 26 CFR (Code of Federal Regualtions) Vol. 75, No. 157, page 49827, "Further, section 6050W(e) provides a de minimis exception that exempts third party settlement organizations from reporting transactions with respect to a payee if the aggregate amount of such transactions does not exceed $20,000 or the aggregate number of such transactions does not exceed 200." The key word here is OR, notice that they did not say AND. >>
Exactly. You're proving my point. Read it again.
A party is *EXEMPT* from reporting if the sum is under $20,000 *OR* the number of transactions is under 200.
The means that in order to be reported the party has to have over $20,000 *AND* more than 200 transactions, which is exactly what I said above.
1/2 Cents
U.S. Revenue Stamps