New 1099k rules...and how it impacts gear junkies/golfers. Is this actually a good thing? CPAs feel free to chime in (merged)

[GooseHook]

Paypal users: if you go to the Tax Documents section in "Reports," you can download an Excel file of your monthly transactional info to support the 1099. I wasn't aware they were providing that but it's a good start if you need to set something up. 

 

 

[wobgon]

I know i am repeating myself, but one last check here....Will refunds that i receive thru paypal be on 1099k and also will refunds that i receive back on my credit card show up....Thanks to those who can help out.

[brew4eagle]

4 hours ago, wobgon said:

I know i am repeating myself, but one last check here....Will refunds that i receive thru paypal be on 1099k and also will refunds that i receive back on my credit card show up....Thanks to those who can help out.

Yes, refunds to PayPal were on my 1099k.  I just set the amount equal to 'cost of goods' so it then effectively equalled 0.

[coreyhr]

If this new tax law has taught me anything, it's just how much I'm really losing each year withy my club ho ways. Starting to look like it'll be a nice little write off for me in 2022. Haha.

[TwistedSister]

1 hour ago, coreyhr said:

If this new tax law has taught me anything, it's just how much I'm really losing each year withy my club ho ways. Starting to look like it'll be a nice little write off for me in 2022. Haha.

I hope your HA HA was indicating you were joking.  You can not claim this as a loss.

[pollock21]

1 hour ago, dhacker56 said:

I hope your HA HA was indicating you were joking.  You can not claim this as a loss.

 

I know this isn't how it works, but if they can tax your profits on used items, you should be able to claim the loss. At the end of the day, buying and selling of used goods shouldn't be taxable income IMO. Sales tax is paid on an item at the point of purchase and that should be the end of it. Just typical Gov greed trying to tax and tax and tax wherever they can.

[coreyhr]

2 hours ago, dhacker56 said:

I hope your HA HA was indicating you were joking.  You can not claim this as a loss.

I was half joking, I honestly haven't dedicated much time to researching it. So if I get a 1099 and use a Schedule C (like I currently do with misc income), why can't I offset the total income with cost of goods sold, shipping costs, etc? I've kept track of and have proof of how much I paid for every club I've sold in 2022, but I don't get to use that to offset the total that I've sold those items for? 

 

Are you saying that I can't claim the loss against my total taxable income, but I won't have to pay tax on these sales since I didn't profit on them? For example, I'm at a $154 total loss on the 4 clubs I've sold this year, including the shipping expense. Does that just mean that I don't have to pay tax on it since it's not a profit?

Edited March 17, 2022 by coreyhr

[TwistedSister]

2 hours ago, coreyhr said:

I was half joking, I honestly haven't dedicated much time to researching it. So if I get a 1099 and use a Schedule C (like I currently do with misc income), why can't I offset the total income with cost of goods sold, shipping costs, etc? I've kept track of and have proof of how much I paid for every club I've sold in 2022, but I don't get to use that to offset the total that I've sold those items for? 

 

Are you saying that I can't claim the loss against my total taxable income, but I won't have to pay tax on these sales since I didn't profit on them? For example, I'm at a $154 total loss on the 4 clubs I've sold this year, including the shipping expense. Does that just mean that I don't have to pay tax on it since it's not a profit?

You can offset total cost against what you sell for.  But you can not claim a loss on the item.

[coreyhr]

13 minutes ago, dhacker56 said:

You can offset total cost against what you sell for.  But you can not claim a loss on the item.

Got it, thanks for clarifying. I'm perfectly good with that, just as long as I'm not paying tax on clubs that I've clearly lost money on. 

[TwistedSister]

Just now, coreyhr said:

Got it, thanks for clarifying. I'm perfectly good with that, just as long as I'm not paying tax on clubs that I've clearly lost money on. 

You should from now on keep your receipts when you purchase in case you get a friendly letter from the IRS.  Just put the info on the proper form when you do your 1040.  You don't have to send the info but will need it in case of the letter.

[brew4eagle]

1 hour ago, coreyhr said:

Got it, thanks for clarifying. I'm perfectly good with that, just as long as I'm not paying tax on clubs that I've clearly lost money on. 

You could claim the losses if you consider the buying/selling as a self-employment endeavor.  As you indicated, if they're going to charge you on the profits why not flip the script?

[TwistedSister]

1 hour ago, brew4eagle said:

You could claim the losses if you consider the buying/selling as a self-employment endeavor.  As you indicated, if they're going to charge you on the profits why not flip the script?

That will only work for a short period of time. If a profit is not shown eventually it will be declared a hobby. 

[coreyhr]

4 hours ago, dhacker56 said:

You should from now on keep your receipts when you purchase in case you get a friendly letter from the IRS.  Just put the info on the proper form when you do your 1040.  You don't have to send the info but will need it in case of the letter.

I have been. I’ve got everything saved along with a spreadsheet tracking net proceeds after fees and shipping. 

[TwistedSister]

10 minutes ago, coreyhr said:

I have been. I’ve got everything saved along with a spreadsheet tracking net proceeds after fees and shipping. 

Good man..   I have found trading to be a better way to go.  FOR A LONG TIME

[cflo2382]

Figured I'd spark this thread back up as we are more than halfway through 2022. What's everyone's game plan here for their 2022 club buying/sales for tax season next year? I have a spreadsheet of all of my buying and selling. So far, overall, I'm at a minor loss. It seems that there are a few different approaches to this - submitting a Schedule C, declaring this as a hobby?, and people that are simply just ignoring it. I certainly don't want to get hit with an audit so I plan on making sure my ducks are in a row. My tax guy has retired so I don't currently have a CPA to help advise. Any CPA's on the forum that want to chime in?

Edited August 23, 2022 by cflo2382

[Krt22]

1 hour ago, cflo2382 said:

Figured I'd spark this thread back up as we are more than halfway through 2022. What's everyone's game plan here for their 2022 club buying/sales for tax season next year? I have a spreadsheet of all of my buying and selling. So far, overall, I'm at a minor loss. It seems that there are a few different approaches to this - submitting a Schedule C, declaring this as a hobby?, and people that are simply just ignoring it. I certainly don't want to get hit with an audit so I plan on making sure my ducks are in a row. My tax guy has retired so I don't currently have a CPA to help advise. Any CPA's on the forum that want to chime in?

I have been selling much less stuff, but keeping track of cost basis of everything I have sold. If I get a 1099, I will submit the proper form to show no profit was made. To the average club ho with a good CPA, this really isn't a big deal, just an annoyance. To the jordan/scotty/yeezer flippers, prepare the lube lol

[third-times-a-charm]

3 hours ago, cflo2382 said:

Figured I'd spark this thread back up as we are more than halfway through 2022. What's everyone's game plan here for their 2022 club buying/sales for tax season next year? I have a spreadsheet of all of my buying and selling. So far, overall, I'm at a minor loss. It seems that there are a few different approaches to this - submitting a Schedule C, declaring this as a hobby?, and people that are simply just ignoring it. I certainly don't want to get hit with an audit so I plan on making sure my ducks are in a row. My tax guy has retired so I don't currently have a CPA to help advise. Any CPA's on the forum that want to chime in?

No one even knows who will or wont receive something.

 

Better to not take any action until you receive notice of a form from your transaction platform of choice.

 

No forms? No action.

 

Edit to add: This is advice from a CPA

Edited August 23, 2022 by third-times-a-charm

[cardia10]

40 minutes ago, third-times-a-charm said:

No one even knows who will or wont receive something.

 

Better to not take any action until you receive notice of a form from your transaction platform of choice.

 

No forms? No action.

 

Edit to add: This is advice from a CPA

Based on the new law, anyone with over $600 cumulative should receive a form as that is now reportable. With our latest "stimulus" you can bet those 87,000 new IRS agents are going to try to nickel and dime us to death on these things. 

[Bigjim1022]

19 hours ago, cardia10 said:

Based on the new law, anyone with over $600 cumulative should receive a form as that is now reportable. With our latest "stimulus" you can bet those 87,000 new IRS agents are going to try to nickel and dime us to death on these things. 

That’s what I understood too, recent law changes affecting electronic payment means anybody who receives $600 or more via PayPal, Venmo etc should get one.  I’m in VT so have been getting these for a few years now.  
 

And yeah, I’d imagine in the next few years we’ll see some nickel and dining but realistically how fast can the IRS hire and train 87k workers, could be a decade or more given the governmental red tape. 

[TwistedSister]

All you need to do is fill the proper form out.  Nothing will need to be sent.  The only reason that ones needs to have the proof of cost on the items sold is if there is a question sent by the IRS.  I would think one would have more issues from ones state dept of revenue(depending on your state).

[cflo2382]

50 minutes ago, TwistedSister said:

All you need to do is fill the proper form out.  Nothing will need to be sent.  The only reason that ones needs to have the proof of cost on the items sold is if there is a question sent by the IRS.  I would think one would have more issues from ones state dept of revenue(depending on your state).

What are you referring to by proper form? Schedule C or something else?

[endy]

51 minutes ago, TwistedSister said:

All you need to do is fill the proper form out.  Nothing will need to be sent.  The only reason that ones needs to have the proof of cost on the items sold is if there is a question sent by the IRS.  I would think one would have more issues from ones state dept of revenue(depending on your state).

Is there a form other than keeping my own spreadsheet that I should be filling out or transferring information to? 

[Jace_bkr]

22 hours ago, Krt22 said:

To the jordan/scotty/yeezer flippers, prepare the lube lol

 

This is Pure gold right here.... 🤣

[TwistedSister]

23 minutes ago, cflo2382 said:

What are you referring to by proper form? Schedule C or something else?

The one that deals with other income and expenses. Business form.

[TwistedSister]

23 minutes ago, endy said:

Is there a form other than keeping my own spreadsheet that I should be filling out or transferring information to? 

Yes.  it is in the 1040 packet.  I used to raise steers for sale and the form has places for all expenses. 

[brew4eagle]

1 hour ago, cflo2382 said:

What are you referring to by proper form? Schedule C or something else?

Schedule C is what I submitted last year for this, iirc

[BirdieBob]

At the bottom of the 1099-K form there is a line item for "adjustments".  Just enter your transactions or attach your spreadsheet that shows all sales to be offset and no profits were realized.

[Krt22]

On 8/23/2022 at 9:38 AM, third-times-a-charm said:

No one even knows who will or wont receive something.

 

Better to not take any action until you receive notice of a form from your transaction platform of choice.

 

No forms? No action.

 

Edit to add: This is advice from a CPA

We all know who will receive the form, anyone with more than $600 in goods and services payments through a single payment processor. If you think you are in this group, you should be tracking your sales and cost basis in preparation to respond to the 1099

[TreeHugger73]

For those wondering what form to put these transactions on, the vast majority of people should be putting these transactions on Schedule D.

Unless you are running an actual business with an actual profit motive, do not file Schedule C. Its only for businesses, and DIY tax prep software providers charge a ton for it. 

 

Ebay partnered with TaxAct to put together an FAQ on the topic. Most people posting here will probably fall under their "virtual garage sale" category and will report zero income. 

https://blog.taxact.com/ebay-seller-faqs-and-unique-scenarios/

 

(Source: Recovering CPA who still has a small tax practice.)

[Ezekial]

Has anyone gone through a tax situation where you purchased a full set (driver through putter) on eBay as a single purchase, and sold parts of it off that passes the $600 mark, but still have the rest and still below what you paid for the whole set. Is still a loss? It’s odd to me because you won’t have an itemized receipt of your original purchase because it was all bought off 1 listing but then you sold it in multiple.