2. misc-audio
  3. 192898-4331

got my PayPal 1099 /// what now?

I assume I owe income tax on any profit I made selling an item, which is probably a loss on most things. Which means I have to show what I paid for the item.

Anybody have any idea on how to go about this. Some things I sold in 2024 I bought over 20 years ago so no way I have proof of purchase. Example.. I sold my 20+ year old Avantgarde Duos for $7K that I paid $10K for.

PLEASE don’t turn this into a PayPal bashing fest or start preaching about the IRS or tell me how stupid I was to use PayPal.

 I am only interested in ideas on dealing with the tax implications

 

thanks

herman
ozzy's avatar
ozzy
7,554 posts
 

I agree. I'm trying to figure out how to do that with Turbo Tax.

ozzy

carlsbad2's avatar
carlsbad2
1,958 posts
 

I found the IRS guidance on how to file this 1099-K.  Looks like there is a spot for it on form 1040.  And if you took a loss, you don't get to write it off.  As we thought. 

https://www.irs.gov/businesses/what-to-do-with-form-1099-k#:~:text=On%20Schedule%201%20(Form%201040)%3A,Sold%20at%20a%20Loss%20%2421%2C000%22

 

cyackulic's avatar
cyackulic
8 posts
 

You got to love how this works. This is like triple dipping for the IRS. 

 

So I buy something with my after tax money. 

The item I buy, has tax on it that I have to pay. 

So I've already paid a lot of tax on this purchase technically. Now when I go to sell it, I'm getting taxed again if it's over a certain threshold. Even if I am selling it at a loss, the government still wants to tax me for the item that was already mine that I paid taxes on that I paid with money that had been taxed already. 

That whole lot of taxes. 

Then I will buy something else that I will have to pay taxes on also. 

The IRS is a government-funded program that is paid for by my taxes. To make sure I pay my fair share of taxes. ....

robperry123
2 posts
 

there's a Wall Street Journal article about this.  

Etsy, eBay or StubHub Sellers: Expect a 1099-K From the IRS This Tax Season - WSJ

If you don't subscribe, here's a relevant paragraph.

The tax rules for selling personal stuff online are different. If you get a 1099-K for something you sold for less than you originally paid, you wouldn’t owe tax, but you would need to disclose it to the IRS.

eBay doesn’t know if the stuff you’re selling is your personal property, if you’re selling at a loss or reselling items at a profit. The IRS gives examples of how to account for these sales in the instructions to Schedule 1. There is a new line item on the top of Schedule 1 where you can list any amount received in error or for personal items sold at a loss.

herman OP
2,273 posts
 

Even if I am selling it at a loss, the government still wants to tax me for the item 

That is incorrect, You only owe taxes if you had a profit. They want you to show you sold at a loss. If you did , you owe no tax.

It has always worked that way for a business. Second hand stores have always owed taxes on things they are reselling.

Nothing has changed except for enforcement of laws and rules that have existed for many years

 

More to discover