I see @nonoise you don't have any answers for my questions or postulations other than ad hominin attacks. If you read through the entire thread on Prima Luna v Raven you will see this played out by yourself repeatedly as well as others on the left that you are unable to see anyone who disagrees with you as anything but a racist. The difference between liberals and conservatives is that conservatives believe liberals are people with bad ideas while libs believe that conservatives are just bad people. You see a racist around every corner. Someone went so far as to claim that there's no way Raven could make a good amp because it's located in a small town in Texas and everyone there is basically a troglodyte. I am a Constitutional Conservative. I am NOT a racist. I don't care what color your skin is. I would hire anyone who can come in and do the job required, they'd get the same pay as anyone else and more if they proved to be a good employee. The majority of conservatives are in my camp. We even like it when people from all over the world come here, as long as they come here legally according to the laws on the books written by congress. What we don't like is politicians who circumvent the laws they themselves have written. The majority of nation's do not allow the unregulated influx of foreigners so we are not unique in that regard.

@thyname no I don't and that's the point. Why does the government feel they are entitled to be involved in the minutia of everybody's every day life? My solution would be the Flat Tax where everyone paid the same 10% rate. Ten percent is the same amount for rich or poor. I think if half the nation who don't pay income tax had some skin in the game they might reconsider and think more about governments reckless spending habits. It's a lot easier to overlook it when it's someone else's money.

 

The Four Different Ways To Spend Money

 

1) You can spend your own money on yourself.

If you spend your own money on yourself, you’re very careful on what you spend it on. You make sure you get the most for your dollar.

2) You can spend your own money on someone else.

When you spend your own money on someone else, you’re careful on not spending too much. You don’t worry as much about the gifts you buy for other people as the things you buy for yourself.

3) You can spend somebody else’s money on yourself.

You’re careful to get good things for the money. But you’re not very worried about getting the best bang for your buck. You’re happier to spend more of somebody else’s money within reason.

4) You can spend somebody else’s money on somebody else.

You become a “distributor of welfare funds.” You’re interested in making your own life as good as you can. But you’re not going to be anywhere near as careful as spending this money on other people.

Meanwhile back at the ranch, if you make a profit when you sell something, you will owe income tax. In the event you don’t make a profit when you sell something, you won’t. Hardly the downfall of western civilization.

 

By the way, that was the case last year…and the year before….and so on. In the event someone is ticked off that their hobby was actually a side hustle…then they havent been paying their fair share.

I live in Massachusetts and I've been getting 1099 for years from PayPal. I sell a 17HMR Bore Guide and do about $3000 a year. I itemize and deduct any expense I can with regard to this little side business.

@dadork :

no I don't and that's the point. Why does the government feel they are entitled to be involved in the minutia of everybody's every day life? My solution would be the Flat Tax 

The progressive tax system is not new. Look up 16th Amendment from over a century ago, circa 1913. 

I did not create the US tax system, and frankly I don't understand why is so bloated to the point of an entire industry of CPAs, tax advisors, tax attorneys, financial advisors, etc. etc. get paid a lot of money to "help" people with their taxes. But it is what it is. Good luck undoing it. Republican and Democrat governments have come and gone over that century, and nobody has done anything about it, other than making it worse. 

 

 

@rbertalotto : and that's great, as this is a side business for you. However, the vast majority of audio enthusiasts selling gear here or in other places using PayPal, do this for pleasure, not a business (i.e. selling something to upgrade to a better / newer unit). THAT is the problem.

Its not hard to keep records. Its not hard to figure out if you made a profit. If you make a profit, you owe income tax. What is it about this concept that is so earth shattering? Is it that some believe they should be exempt from certain income taxes? Are you angry that taxes may be owed or that it has become more difficult to hide profits?

I want to sell my old amplifier  I bought it years ago for 5k and I sold it for 2500 I have no receipt so now I'm taxed on 2500 as profit this is the issue most people do not have receipts for old gear or any other old item. It is just a way to make people buy new a way to kill used item sales and knock out small-time businesses since now you have to treat even the smallest venture like a garage sale or lemon aid stand like a normal business. This will just criminalize 1000s many will not be aware till they get the tax forms in 2023. The sh.t will hit the fan then. Ebay will start to collapse Facebook marketplace will be all ads from big business audiogon and others will have greatly reduced listings. And you with your old gear will have to price in tax you now have to unjustly pay.

@ghasley :

Are you angry that taxes may be owed or that it has become more difficult to hide profits?

Are you asking me? If you did, there is no profit, so I have nothing to be angry about hiding anything. And I keep all my receipts, including shipping receipts, PayPal receipts, etc. etc. I know there is no tax as I did not make a profit. I was just inquiring on how to report that 1099-K in the tax return, as I am not a business. What do you suggest?

So let's go back to my earlier example:

Say for example, I sold something for $1,000, that I bought a few years back for $2,000. Clearly a loss. It’s reported in that 1099-K form that also gets sent to IRS. What do I do with the form? Do I ignore it? Or do I have to report it in my return, and if so, how? Which schedule? Again, not a business, just an audio enthusiast upgrading.

 

@johnk : That's exactly right! you nailed it. What you described IS the problem.

and that’s great, as this is a side business for you. However, the vast majority of audio enthusiasts selling gear here or in other places using PayPal, do this for pleasure, not a business (i.e. selling something to upgrade to a better / newer unit). THAT is the problem.

BTW, Here’s one for you. You do know if you buy something, even used, and you ultimately sell it for more than you paid, the difference is a taxable event. Art, antiques, exotic cars are usually hit hard on this. Let's say you bought a sports car for $16,000...Had it for 13 years. Sold it for $40,000,  My accountant told me the difference, minus and expenses you incurred directly related to the car, was a taxable event. Forty years ago you bought a McIntosch XYZ for $1000 and you sell it today $5000....$4000 is taxable...(Not sure if you can deduct the electricity used to run it...Talk to your accountant.....) ....BTW, depending on the accountant, you might hear the term.."Casual Sale"....Be careful with this one. Talk to your lawyer or accountant to be sure.

This thread is political garbage.

Joke!

 

Relax, you will simply certify that you paid $5,000, that you didnt save the receipt and that you didnt know years ago that you would need it. This isn’t the Spanish Inquisition. Much ado about nothing…unless someone has been running a side business without paying income taxes. Nothing will collapse, the earth will still spin and the sun will rise. I don’t have a great deal of heartburn about a system attempting to encourage compliance. Im a “everyone should follow the rules and if they dont they should pay the consequences” kind of person.

See the attached Everyone calm down.

 

This is an excerpt from the CNBC Make It newsletter. Subscribe here.

A few days ago, I received a text from an acquaintance asking why the IRS was starting to track individual users’ Venmo transactions. As someone fairly tuned into the financial world, I was confused that I had heard nothing about this.

Searches on Google and Twitter quickly yielded a flurry of panicked and angry responses to a change in tax law put into effect by the American Rescue Plan last year that lowers the reporting threshold for business transactions on mobile payment apps. But users were largely mistaken to believe the change applied to them. The IRS is not requiring individuals to report or pay taxes on individual Venmo, Cash App, PayPal or Zelle transactions over $600. 

Rather, small business owners, independent contractors and those with a side hustle who use third-party payment apps for commercial payments will have their total transaction value over that threshold reported to the agency by the apps. Previously, it was $20,000 and 200 transactions. This also applies to those who run an eBay shop, for example, or any other online store that accepts payment cards, according to the IRS.

“There’s been a lot of misunderstanding about the tax reporting changes,” says Garrett Watson, senior policy analyst at the Tax Foundation. “It doesn’t change anything about if any transactions are taxed or not.” In other words, the IRS is not starting to tax individual transactions between family and friends. 

Splitting dinner with your friend, sending your roommate money for rent or gifting your cousin a round of birthday drinks? Don’t sweat it. “It’s not taxable,” Watson says.

That has been miscommunicated to many people, who seem to believe the IRS will be tracking every user’s account. Ambiguous headlines could be partly to blame. But the agency will receive aggregate transaction amounts from the payments apps about commercial transactions, Watson says, not information on specific payments.

Small business owners, those with a side hustle and others who receive commercial payments for goods or services through the apps will receive a 1099-K form from the payment apps, which will give the IRS more information about the business transactions being made on the platforms that often go unreported, Watson says. The change took effect Jan. 1, 2022, so filers don’t need to worry about it this tax filing season.

If your transaction is flagged by the IRS, Watson says you may receive correspondence from the agency that you can clear up with a receipt, bank statement or explanation. The only time you might really need to worry about being audited, he says, is if you move an “unusual” amount of money on the platform. But that’s always been the case.

“If we’re talking about a significant figure, into the five or six figures, of course you would want documentation,” he says. “But normal folks using it day to day, I wouldn’t worry about it too much. It shouldn’t dissuade you from using [the apps].”

It kills me that the guys screaming about the deficit are the same guys who think they shouldn't pay taxes.

Press button on fire extinguisher, point at hair on fire, continue doing so until no more fire, keep fire extinguisher conveniently located as hair tends to spontaneously combust from time to time.

Someone needs to post that fire extinguisher at dadork. 
Sounds like his hair has been burning for some time now.

All the best,
Nonoise

@thyname This is getting even more confusing. The simple fact that you received a 1099 when you don't have a business throws a monkey wrench into the whole tax filing process. There are good links above that indicate that getting a 1099 from Paypal should not happen if you don't have a business. But you got one and now you've got to figure out what to do with it.

It is my understanding that you can't just ignore a 1099. If your return doesn't account for it somewhere then you will get a notice from the IRS that you have a problem with your return. Schedule C is the only place I know of to account for a 1099. I do consulting and I've received many 1099s. Schedule C is where you account for your expenses against the 1099 income. It is not set up to account for the sale of personal items if you have no business. The problem is that I don't know of any other form that deals with 1099s.

I searched using multiple criteria and I found several articles saying that the Paypal 1099 is not intended for the casual sale of household goods but I could not find anything that described how to account for it on your return if it only includes the sale of household items.

Too bad we don't have a CPA in the group who would generously provide us free advice. In the absence of that I think you'll have to go to a CPA for an answer. When you get this figured out please let us know.

Everyone receiving a PayPal payment that is NOT family & friends will get a 1099-k tax form, if above the dollar limit. Business or not.

 

I do my own taxes using TurboTax. Including last year when I had the 1099-K from PayPal. I reported the PayPal form on Schedule D of form 1040, accompanied by a detailed Form 8949 that I mailed over, which I reported on form 8453 of my electronic tax return. That's the best I could do based on the information I had gathered. I printed all the receipts (buy and sell, shipping, etc. etc.) and I am keeping them just in case of an audit. 

 

I did contact a few CPAs I knew, but they had no answer. They were looking things up in the Internet, no different than me. Not all CPAs know what to do. I guess I am just unlucky to not know a good CPA.

 

That's all I have to offer. I will stop it right here. If anyone has a better idea I am all ears. I will keep an eye in the subject matter, needless to say. But I have nothing left to contribute. Good luck everyone 

Yes this a confusing topic.  Question to the CPA's.  If I sell an item at a loss over the threshold, do I need to even file the 1099-K.  If I don't need to file the 1099-K, do I need to keep documentation and in what form would that documentation take.

If you go into your Audiogon account, click on the BUYING link, then click on the BOUGHT tab you will find the equipment you bought on Audiogon, the price you paid and the date you purchased it.

You can do the same thing for items you sell.

It will take a while to sort out exactly what this new 1099 means for individuals. In the meantime, stay cool and save documentation for purchases and sales.

I pay $450,000 tax on my boat few year ago. Some guy get away with less because they take guy out and call it charter business. I no skirt tax. If people make money here and it business pay tax or don’t sell or be like liberal and make excuse that category no fit way you like and pay people argue. I proponent flat sale tax but I no political leader. I know how tax work just system efficiency like thiel and complicate as system that make Bad recording sound good. Kdl system.

Even if I sell something for more than I paid for it... it will be a loss..

I had to store it in a house I have to pay for... an expense..

I had to pay insurance to protect it... an expense

I had to up keep it, my time is expensive... an expense

I had to spend energy on it with electricity, heating and cooling... an expense

I had to transfer it, car loan, gas, vehicle insurance... an expense

 

I am sure there are more deductible expenses I am forgetting.

God bless the Black Market. Bureaucrats are stupid. They just increase everyone's paperwork and most of us find work arounds. What this will do is hurt companies like eBay and Audiogon as we will find ways to work around them. Do I really care? 

This is why I save all receipts from every audio related thing that I buy. So I have records. I put them all in a drawer and save them. But like I said. This should make all audiophiles who turn over gear a business with business expenses and deductions. 

I have no problem what so ever paying tax.....I have a HUGE problem on what the government uses my tax money for!!!

@nonoise I'm a guy who makes less than a 100k a year. I was homeless 20 years ago. I knew then as I do now the government is a glutton with billions of wasteful and fraudulent spending. I knew then as I do now that it is not right to take from one who earned or produced something to someone who didn't. I knew then as I know now that until waste and fraud is stopped or extremely curtailed, we shouldn't raise taxes on anyone. My hair is just fine.

@dadork , Hey, good for you. Your sob story is really touching. If you really want to go after waste and abuse, then follow the money and where it really goes. Tell companies to pay a living wage so we taxpayers at the bottom won't have to subsidize their profits by paying for food and housing programs, for a start. Until, stop pontificating as it's rather boring.

All the best,
Nonoise

Lmfao @nonoise . The answer isn't in giving things to people. The answer is in people working and gaining dignity and pride in what they are able to accomplish. The government has been giving people all of those things since FDR and LBJ and those people are exactly where they were then and in long look worse off. They don't take care of anything because nothing belongs to them. They don't learn self-accomplishment and pride and they certainly never step on the ladder of prosperity. It's become generational. In a capitalist society in which you seem to frown upon the employee has leverage as well. People that decided to learn in school rather than goof off have better opportunities. People that work have better opportunities and people that give a rip advance and if they can't advance where they are are free to go somewhere their abilities are compensated. I don't know why nobody ever told you but three things are antithetical to your ideal Utopia. Life is not fair. People don't have equal abilities. Actions have consequences; good and bad.

My story was not a sob story. I'm proud of myself. The me of 20 years ago would have thought the me now was rich. I own two houses now, one I rent out and use the rent to pay for this one. I own a business painting houses of people who I would consider rich. I employ between 2-8 people depending on what time of year it is. Rich is always relative. I guarantee one thing though friend, if I had blamed my condition on everyone else or even at just one group of people I would have never moved from where I was. People today are being conditioned to blame groups, told that they are incapable of making anything of their lives because someone else is stopping them and that they should just be happy with what the government gives them. People are being told that they should instantaneously achieve what they see other people have who have worked all their lives for. 

Could you imagine how many people could go to work, gain some dignity, advance in life if government weren't such a glutton? Where companies could pay people more if they didn't have to pay so much in taxes? Where companies didn't have to spend sometimes millions annually to keep abreast of current tax law? 

 

 

 

@dadork , you're not going to get any affirmation from me so why do you keep alerting me to your silly rants? Are you using this as a way to vent your frustrations on a forum dedicated to audio? Don't you have farcebook or 8kun or parlor to post on?

While you have my attention, just who are these people you keep referring to?

All the best,
Nonoise

For some time now I’ve bought and sold 100k easily every 6 months  
I pay in cash  and accept cash only.  . You can’t afford to do this find another hobby. I pay cash to individual to drive anywhere and cash is king.. 

I do the same on autos I collect. That’s tricky due to title work. Can’t recall getting a title on a 30k amp.

I suspect one would have to be careful doing so, but the possibility might exist to receive multiple payments in lieu of one larger lump sum (e.g., three $500 transactions in lieu of a single $1,500 transaction). Of course, you would incur additional fees in doing so and the IRS might view this is some sort of "structuring". Hard to believe they would target hobbyists, but in this day and age, nothing would surprise me.

 

Such a bummer, glad I sold most of my old gear last year. I have a few more items to sell and will probably require cash in person, multiple payments, or BTC. 

I bought a Fender Stratocaster for $1600 in 2019 and sold it for $1400 two weeks go.  Will I get to deduct that $200 loss?

@audioelevations If you're buying/selling $200K in audio gear a year, hats off to you btw, I think you've jumped from hobbyist to being a small dealer. Good for you doing all cash transactions otherwise you would already be paying tax.

@dadork Stop the nonsense rants nothing that you're saying is anything but rhetoric devoid of fact. Try reading up on some real statistics regarding poverty sometime the truth minus any myths is pretty harsh,

Yes the truth about poverty is complex with many factors. @dadork I do like your story and find it both inspiring and humbling. Well done sir.  

For most of us selling used gear, there likely should be a loss, so keep your receipts of purchases which again for most of us are in our outlook, or other online service.  If you are fortunate to sell something at a gain, I’m pretty certain you can’t net against other losses unless you have a business and file schedule C, etc. 

@dadork I agree with @grannyring and congratulate you on your success. There are many like you, proud to get out of poverty and we need more like you, not government dependency.

If you are mailed to 1099k form you can claim zero profit and be done with it.

 

What is interesting is that this new rule also has a requirement for the payment app to collect the users EIN or SS#.

This part is still being flushed out but expect this sometime. 

I would also expect that this recording and collecting will be used for state sales tax collation as some sites do not include this. 

 

If you buy on Ebay or Amazon you automatically are charged your local state sales tax.

 

 

If the privately owned Fed can generate trillions out of nothing and every dollar created as an IOU. All to be repaid by following generations, why pay taxes?

Unfortunately this thread has degrade into political commentary.  If you want to do that, go to your favorite social media outlet and vent your spleen. 

I stopped selling my electronics a while back because I always regretted it. If I buy online I try to avoid any tax by buying from dealers who have businesses in states who don't require I pay sales tax, although little by little they are becoming  scarce. Nice to know that PayPal will be reporting transaction  info to the government so that if I do sell something with a high price tag I won't be using PayPal except perhaps family and friends. 

I used to love Let go....meet in a safe location and you get payed in Cash....no shipping, big chance of damage, I worked for the old PO and saw guys ,drop or throw packages that were lable ,please be careful....its a joke ,years later I work for UPS in the claims department and saw,first hand damaged packages and was rated by the number of claims you denied. It's a joke....and I worked for a wholesale electronics company, and package Dual and Panasonic plus other audio equipment. It's a joke for the guy who after spending thousands for audio equipment to now sell it and have to pay taxes on it....when he orginally paid taxes on it when he bought the stuff....Please.....

Sounds like a very Vat idea to me!

I have been scrambling to find some documentation of the price I paid for my equipment purchased on Agon as I was planning to sell some of my gear.One in question that I would like to sell was purchased just before 2012 in late 2011.Agon told me they delete everything before 2012 and cannot retrieve it.Anyone with the same problem? Another question I have is would a Agon receipt from Agon Deshboard be sufficient for the IRS?

abc

I do not like paypal. They have no loyalty to their customers. If they made any changes for 2022 it is not for your benefit. I don't know how they tax items twice. Once when the item was sold brand new and again when is sold used, it sounds illegal and unethical.

This is a great thread and thank you as I got a - '' Notice '' from Pay-Pal that I had to give them my SS# and also my individual tax status. I thought it was actually a SCAM - which in all ways Pay-Pal is. They are corporate thives…...I have been on Audiogon for almost 22 years and between the Pay-Pal fees an Audiogon's fees along with shipping it is making it nearly impossible to do business here or on line for any stereo purchases. Politics aside which there are some good points here but usual we have the '' ideas'' that everything is a conspiracy and also let's keep giving more money to the people who don't want to work - not the ones who who can't work - but the ones who don't want to work …...so far left and far right. We need to get in the middle and work together otherwise we will be leaning either Chinese or Russian and no offense to the people of that country but more as usual to the leaders. We need to get some B****S here in the US an stop in the fighting between us. The government is looking for more revenue and taxing transactions on the Internet is where they are going. But to ALL of the individuals who noted that '' if ''we do report the above $600 transactions to the IRS - then I too want to be able to write off the depreciation as well. Fair is fair IRS.....but I is unnerving when the Bezeo's . Gates and Musks along with what 55 other US corporations do NOT pay the same proportion of taxes that I do . Now that is wrong but nobody that is Republican, Democrat or Independent or voted for Alice Cooper wants to take that on make it fair …...that's what we should all be ticked at . I understand that I have to pay taxes but let me just pay my fare share. This is still the best country in the world......but we need to look over our shoulders. I have not responded to Pay-Pal and I probably won't. Stay safe everyone.

To those of you who understand basis in property, I say (with an ode to AC/DC) I SALUTE YOU !!!

Example: I buy an amplifier for $5,000.00 and I pay 6% sales tax, My basis in the amp is $5,300.00. I sell it 2 years later for $3,300.00--I am selling it for a loss. The buyer has to pay tax depending on his/her jurisdiction, but I have no tax liability.

The 1099-K you may receive is only an indicia of what you received/transacted, not a precursor that automatically invokes a taxable event.

Technically, this has always been the law, it’s just the government lagged behind in updating existing laws to reflect online commerce. So I bid you all adieu, into the wild blue........

Highly recommend anyone making a true PROFIT from this business talk to a good tax lawyer in your own state. I used to write off expenses in a high-end horse breeding project in which the difference between a hobby and a taxable business was determined by whether you could declare a PROFIT in 2 out of 7 years.

So by all means, you must document your expenses (Roon, Qobuz, postage, Absolute Sound, packaging, internet fees, cable fees, any car use for the business, travel to shows, meals at shows, etc., etc. It's pretty easy to show a loss so you can write off stuff but your sphincter can get a workout around year 6 if you haven't declared a profit yet.

If you sell a pair of old JBL's for $200 more than you paid for them, nobody's going to know or care, but if you're making a living, it's taxable like any other job.

zelle site says they do NOT report to IRS nor do they issue 1099's