rmeints wrote in Best Way to Sell a Collection:
The $600 threshold is what every standard US employer has to deal with, as per IRS requirements. My company is required to send a 1099 to every individual who worked for us if they have earned $600 or more in income, provided that they are a US Tax payer. By that, I mean we don't send 1099s to non-US individuals, such as a freelancer who is a French national. We can face some pretty steeps fines and penalties if an audit proves we weren't sending out the required 1099s. I would be surprised if eBay tried to fight having to comply with this standard. They may have tried to stop it early on, but if they did they must have conceded defeat.

There is a big difference between a 1099-Misc and a 1099-K.   1099-Misc is used for tracking payments to contractors while the 1099-K is for the gross amount of all reportable payment transactions.  A Misc form is pretty smilar to a W2 in that regard without taxes and other deductions removed.  The amount on the 1099-K may represent transactions that could be in the hundreds/thousands depending on frequency.  The onus is completely on the individual getting the "K'' form to track said transactions for loss/gain determination if the tax man comes knocking.  The current administration wants to add 87,000 IRS people.  I think a 50 gallon drum of K-Y may be a good purchase this year   .  I am assuming PayPal will also send you a 1099-K as well if you receive money into your account > $600?  If this is true, bypassing Ebay and using paypal for private sales may not be an escape from the 1099-K.  Back in the day we paid by snail mail with bank checks or money orders.  Putting the cart way before the horse here, but that will really suck if sellers start to opt for that type of payment again.

-SKA

mbassoc2003 wrote in Best Way to Sell a Collection:If for example you buy a 200K home and it increases in value next year to 230K and the IRS find a way of sending you a bill for their share on the 30K unrealised gain

Well, we already have that (you do, too)... property taxes.  It goes to local governments, not federal, but there it is.  The federal government would love to charge us property taxes, too, but the chances of an additional tax passing Congress are exactly zero.  You can increase taxes we already have, to a point, but it'd be political suicide to introduce a new tax.

Foul

aia wrote in Best Way to Sell a Collection:revenues among privates on used goods

Where to even begin?

aia wrote in Best Way to Sell a Collection:My 2 cents and then i swear i will not post anymore: ebay is not a sale platform "pure"... If i have a used pair of shoes, i put them over there and for unknown reasons that auction ends at 10.000 usd, i do not think you are asked to pay VAT, taxes and so forth on that revenue... This is why i intend not a pure ecommerce platform... This is the main reason ebay took so long to get to this point... Or, at least IMHO!

Now, it seems that ebay had to give up and allow taxes from revenues among privates on used goods... I foresee a huge loss of customers from now onwards... On both sides: both sellers (who will post their goods on other not taxed platforms...)and buyers (who will look for their goods on other websites...)

In EU some good alternatives in this sense are already available: wallapop and vinted... Probably in the US it will be the same!

Ciaooo

In the UK, and I believe the US, taxes have always been required to be paid if you sold a pair of shoes for 10K. It was required in the UK that you declare that sale in your tax return and allow the HMRC (our IRS) to determine the tax owed on the profits. About a decade or so ago eBay began reporting all eBay income over a nominal threshold to HRMC to ensure that HMRC had a heads up of all significant incomes happening on eBay, and to catch out those who did not declare their eBay incomes on their tax returns.

This is merely the same reporting to the IRS at a much lower threshold in the US, and one would assume the sending of a notice to the account holder via an official IRS form of the information they have passed to the IRS. What the seller has to do in declaring his taxes does not change, albeit there are now million of small sellers who would annually 'forget' that they sold $1000 worth of household cr@p on eBay that now have the added burden of doing what they always should have been doing, who will likely now not sell sh!t so as not to have to go through the ball-ache of having to explain and catalog it all for their tax returns.

FoulFoot wrote in Best Way to Sell a Collection:Property taxes are based on assessed value, not what you paid for the property, so it's definitely taxing your unrealized gains.

Foul

... as it is in the UK. But surely it is not the 'unrealised gain' that is being taxed? With property taxes (Poll Tax in the UK) surely you're not being taxed on the profit you are making by investing in your property, but rather you are being hit with a levy for the right to reside in your chosen neighborhood? Yes, they use the value of the property as a means of establishing which are the wealthy neighborhoods and which are the poorer 'hoods. But even with the current system in both our countries, we pay for the right to live in our houses (regardless of whether we own them or not in the UK), and we still will have to pay tax on the profit you make when you sell your property, over and above having paid your property tax levy. You have to pay both. It is the latter that they are trying to find ways of taxing you now for, without having to wait for you to sell your property to get the money.

Do you not pay property tax in the US if you do not own property? As in, if you rent a property, do you still pay property tax even though you do not own it? If so, then surely that is a levy tax that is being extracted in exchange for your right to live, and not anything to do with any profits you are making? Because a renter is always losing money on the deal and can only compensate by offsetting against a profitable investment elsewhere (which I'd imagine most do not.)

I rent. I pay property taxes for the right to live where I live. I make no profit whatsoever, and will never realise any gain.

As an example... You could live in a tent, and you still have to pay levy for the right to live in it if you own the land your tent is sat on. Only they call it land tax, and not property tax (or at least they do in the UK). If you build a house you live more comfortably and they have reason to believe you have greater means to play, so they increase your levy each year. If you build an even bigger house and dig a pool, they increase your levy further. You are paying for the right to live. You are not paying taxation on the profits you might make by investing in your property. At the moment, if you start in a tent and end up in a 1M mansion, and you can prove that it invested 400K over 10 years, you pay tax on the balance of 600K when you sell the property. The IRS gets a single payment when you sell the house and they have to wait for you to sell to get their payment. If you don't sell, they get nothing, but you do still have to pay them rent/tax/levy whatever for the right to exist in their jurisdiction.

The same applies to stocks and shares. You only pay tax on your profits when you sell, if you buy shared in Eggs.Y.Zee and never sell them, you never pay tax on your profits. You do pay tax on any dividends you receive, but if your 10K investment becomes 100K you pay nothing on the other 90K until you sell and then the IRS gets one single hit of money at the time you sell.

This is what they want to change. They want to tax you each year on what your profits might be if you sell your house or your stocks in that year. So they still get the same tax on the same 600K on your property and the same 90K on your Eggs.Y.Zee stock, but instead of getting big tax payment if you sell, at an unknown time over the next 50 years, they get tax from you every year in little tiny bits, which gives them a constant and predictable income stream year in year out based on the invested equity in the US, rather than a fluctuating market driven income stream based on the buying and selling in the market in any one year.

An added benefit is they do not have to acknowledge losses in the value of stuff in the market when they tax people. They can say your house has not dropped in value, or indeed has raised in value, regardless of whether or not is has or hasn't because you have no way of proving otherwise, and are unlikely to have the financial means to challenge the IRS valuation data. The only thing they will have to do is give people rebates when they sell below their declared values, and, as with any government organization, the money is better in their pocket than yours in the first instance. And the scheme has legs too. If you don't pay they could place a lien on your house to make sure the debt is pinned to the property and the owner does not release equity and squirrel it away without first paying off the IRS.

Apologies for kicking the dead horse one more time but this guy explains it nicely in less than 6 minutes.

www.youtube.com/watch?app=desktop&v=X6PniwHEj-c

Not to be political but JB and his cohorts have pile driven the economy faster than a WWF wrestler... Yeah I know its WWE, but it will always be WWF to me.

superfly snuka foreva

-SKA

I was not aware of this, though it does explain some of California's continual budget problems.  :/  Though the "assessed" value does increase by 2% a year, this of course does not keep pace with some of the highest real estate appreciation in the country.

Foul

*sigh*

I really should have cleared out all my extra stuff last year. This is a nightmare for collectors or just people trying to sell off some extra stuff to make ends meet. Very few have records of what they paid for a thing years ago.

But sure, make life harder for lots of people over a few thousand dollars each instead of billions that large companies dodge.

Sir Kill Alot wrote in Best Way to Sell a Collection:I think when the time comes, I'll show a loss for everything.  How does the IRS prove otherwise?  Banks are only required by law to keep transactional records 5 years for checking and savings accounts.

Think about what a terrible investment collectibles often are. People spend way too much on stuff, & get less by selling it years later. They might use the money earned by investing it on a fun, indulgent trip to the comics shop for more overpriced junk.

If I were to consider my spendthrift ways as a business for the purposes of my tax returns, I could show an authentic, honest-to-gosh loss every year. I could apply that loss to my overall income, lowering my taxes. So it might not even be in the IRS's best interest if taxpayers always do this.