Paypal Changes for 2022

@8th-note : very informative! Question: what schedule would you file this under?

Also, I believe for hobby transactions, losses are disregarded, but gains are recognized. They cannot be offset with each other. I may be wrong

 Correct on gains and losses.

This wont be much different than what we now do when we donate goods to a certified charity. You can guesstimate with some backup, receipts are best but guesstimates with backup work and passed the smell test with a recent audit. It also depends a great deal on materiality of the aggregate tax return...$50,000 on a paypal 1099 on a return showing $1million of AGI isn’t a thing. $50,000 on a $50,000 AGI is a side business unless its a one off year.

By the way, everyone is aware that this isn't a new thing, its just that some of the vendors like Paypal must report the transactions. Technically, you must be able to determine basis for every transaction to determine if there was income or not.

Makes sense Ghasley. Very rarely do we make money on an audio sale or selling our used furniture. Keeping records of all these purchases going back 3,5,10 or 15 years is another matter.

Fines are a penalty for doing wrong.

Taxes are a penalty for doing right.