With the tax changes starting next year, will this impact your price cap for buying single items?

[Californication | 1,477]

44 minutes ago, goldenpp72 said:

I'd have less issue if there was a way to know like.. What your item was worth, the reality is most people don't keep a detailed record of what we pay for things because it isn't any kind of deduction (to my knowledge). So suddenly saying hey, if you sell your game for 500 bucks, we're going to tax you on 500 unless you can prove  you paid 300, just seems kind of ridiculous to me. They shouldn't be able to.. retroactively alter taxes as such for things that are impossible to prove, they won't just let you make up what you paid you know?

I myself don't sell much but in the event I needed to, this hurts a lot as I have 15 years of stuff not documented receipt wise (aside I suppose whatever the last 3 years eBay keeps)

They haven't changed the reporting law. All income unless explicity excluded is supposed to be reported to the irs. If you were reporting the income to the irs you would have been keeping records. The reason there is am issue is because a 1099 is more likely to raise a red flag if you don't report it and can trigger an audit. Also, proving a tax position is almost always on the tax payer.

Edited April 11, 2021 by Californication

[O.G. CIB | 415]

Some reading for those interested. 

https://www.investopedia.com/articles/personal-finance/061715/how-are-collectibles-taxed.asp

I've filed taxes on game purchases for years. I treat it like a business which works to my advantage. The issue will arise for some if their audited and the IRS pays games with disallowing your cost basis. Anyhow, if your a small time guy its not worth their time but some people move a significant amount of money and you have to consider your strategy. It's best to consult a tax professional to get a better understanding.

Edited April 11, 2021 by Mr. CIB

[tbone3969 | 304]

What if you only take friends and family payments?  Will that trigger a 1099?

[zeppelin03 | 314]

10 hours ago, Californication said:

They haven't changed the reporting law. All income unless explicity excluded is supposed to be reported to the irs. If you were reporting the income to the irs you would have been keeping records. The reason there is am issue is because a 1099 is more likely to raise a red flag if you don't report it and can trigger an audit. Also, proving a tax position is almost always on the tax payer.

Yep. It was income for all of us before. A lot of us just skipped self reporting. This is like when stores online started charging sales tax. We should have been reporting those purchases and paying tax but weren't. 

I get it's frustrating but it's just holding those sites accountable to report.  When I sent out 1099s for a few years it was anyone we sent a payment to for $600 or more.  Seems consistent with the IRS requirement that already existed.

[docile tapeworm | 4,198]

14 hours ago, LutherDestroysTheGond said:

What a shitload of fuck.  Hello, local cash sales!

until they take cash away from us too

[tbone3969 | 304]

Are we sure this starts in 2022?  Like aren't we reporting on 2021 income in 2022?

[LutherDestroysTheGond | 690]

I do sell online but more as a hobby and usually not enough to bother reporting.  Typically my cost basis is close to what I pay and any gains aren't material to my taxes.  Still not thrilled about this. I was on the fence and after researching this may tip me to just sell off before these new 1099 thresholds are in effect

[docile tapeworm | 4,198]

18 minutes ago, LutherDestroysTheGond said:

sell off before these new 1099 thresholds are in effect

i prob wont bother selling online anymore. ill ask since youve done the research, i have until next year to sell before it goes in effect? 

[goldenpp72 | 1,233]

23 minutes ago, docile tapeworm said:

i prob wont bother selling online anymore. ill ask since youve done the research, i have until next year to sell before it goes in effect? 

It would be the rest of this year, if you stay under 20k on any specific service, starting in 2022 it will be 600.

[LutherDestroysTheGond | 690]

2 hours ago, docile tapeworm said:

i prob wont bother selling online anymore. ill ask since youve done the research, i have until next year to sell before it goes in effect? 

Poorly worded on my end.  I still need to research it but after I do that will help make my decision and I can let you know.  iirc collectibles (I think it applies to games) fall under Capital Gains rates if held for over a year.  If held for under a year and sold, then the gain portion is taxed at your marginal rate.  The documentation for cost basis would be on the seller. 

I don't have receipts/documentation for damn near all of my items.  At least I can pull old ebay purchase history for a few years but I dont buy much there.  I'll see what I find out with these new changes

[Tanooki | 4,932]

Keep digging I’d love to get some rock solid facts to decide from

 

Really leaning on cash only to dump things locally, hoarding as I did with my pre-2005 original collection. Or just trading online or it in for rip-off level abuse as half price/GameStop and if that seems wrong there’s the dumpster.  Yeah I’m serious I’d last resort trash stuff before paying tax on garage sale goods. 
 

That may shock a few and sound like a vengeful dick move but I paid taxes to get the money to buy it, taxed again to buy it too, not going to get triple taxed to dump it. 

Edited April 12, 2021 by Tanooki

[nrslam | 474]

Collector's Alert! Free games in the dumpster nearest Tanooki's house.

[kell | 102]

This appears to be for the tax year 2022. Therefore, would impact selling in 2022 and reporting in 2023.

Edited April 12, 2021 by kell

[snes_collector | 56]

This started in Virginia in 2020, so I had to file this on my taxes this year. My best advice is just to keep records of everything the best you can from now on. Also the 1009-K you get from Paypal includes shipping, taxes, and fees so make sure and deduct that and also business expenses such as shipping supplies and gas to the post office.

The hardest part for me was calculating all of that stuff, so I'd recommend starting an excel file or list now in preparation of 2022.

I ended up making a little over $900 on online sales last year after expenses, so it basically was I made an extra $1,000 on top of what a make from my work. I was really nervous about it but I didn't really pay much more than usual.

[portabello | 99]

Yeah, this isn’t a new concept. Any miscellaneous income over $600 has always been required to have taxes paid on it to the IRS. I’ve been self-employed for the last 6yrs so I’m more aware of these things. That being said, it’s up to the individual to pay those taxes and if they don’t, they just assume the risk if audited and caught. Many don’t report some of their MISC income and get away with it, I don’t mess with that kind of risk when it comes to the risk of owing back taxes.

What IS new is simply the system by which income is documented. If you receive a 1099 from the entity you make income with (eBay, employer, etc), you have to assume that the IRS gets a copy too, thus blowing your cover if you try and hide the fact you brought in miscellaneous income.

[Jfreakofkorn | 282]

So cash is king from the looks of it 

[Bonanza125 | 55]

Just report the amount of sales you made and how much the items cost. It's not that big of a deal unless you're profiting big dollars for years and haven't been reporting or you don't file taxes at all. You can deduct Ebay/Paypal fees and shipping cost. If you don't want to bother with taxes then like what Tanooki said sell everything locally. Unfortunately the not paying tax gravy train is about to end for some.

[LeatherRebel5150 | 1,056]

On 4/16/2021 at 7:30 PM, Bonanza125 said:

Just report the amount of sales you made and how much the items cost. It's not that big of a deal unless you're profiting big dollars for years and haven't been reporting or you don't file taxes at all. You can deduct Ebay/Paypal fees and shipping cost. If you don't want to bother with taxes then like what Tanooki said sell everything locally. Unfortunately the not paying tax gravy train is about to end for some.

That’s fine and all. But what do you do for stuff you have no idea what you paid for it or have any paperwork to prove what you did pay for it? You’re kinda screwed then no?

[O.G. CIB | 415]

3 minutes ago, LeatherRebel5150 said:

That’s fine and all. But what do you do for stuff you have no idea what you paid for it or have any paperwork to prove what you did pay for it? You’re kinda screwed then no?

Yes, you would be screwed because you have no proof of a cost basis “if” you are audited. They would disallow the amount you stated as cost and tell you to prove it. 

[Bonanza125 | 55]

1 hour ago, LeatherRebel5150 said:

That’s fine and all. But what do you do for stuff you have no idea what you paid for it or have any paperwork to prove what you did pay for it? You’re kinda screwed then no?

Yes you would be screwed then like what Mr. CIB said. So I would say start preparing and save receipts or have a record through your Paypal, credit card statements or other accounts you make payments. 

[LeatherRebel5150 | 1,056]

1 hour ago, Bonanza125 said:

Yes you would be screwed then like what Mr. CIB said. So I would say start preparing and save receipts or have a record through your Paypal, credit card statements or other accounts you make payments. 

Problem for me is most of the stuff I bought is going on 10yrs ago now. Theres been account changes and cash deals and who knows if I could find any records of the stuff I would want to sell. Im just going to have to move to local only. 

Does this also affect straight money transfers like through Google wallet? That might be a work around for certain transactions/people.

[Bonanza125 | 55]

1 hour ago, LeatherRebel5150 said:

Problem for me is most of the stuff I bought is going on 10yrs ago now. Theres been account changes and cash deals and who knows if I could find any records of the stuff I would want to sell. Im just going to have to move to local only. 

Does this also affect straight money transfers like through Google wallet? That might be a work around for certain transactions/people.

Here is the thing. When you start reporting income they can come back with an audit. At this point all that can be advised to you is to start saving receipts. If there is no audit then you don't have to worry about the past 10 years. It's only something if they audit you. Doing stuff locally cash only will work but keep in mind people locally are looking for bargains and want things lower than market value. Yes the IRS knows your income from Google Wallet if over a certain amount of money & transactions. That number will turn into $600 soon. 

[Tanooki | 4,932]

Maybe the local values will shift higher then, because as people figure it out and don't want to let the turds in power who passed this gem get away with it, there will be quite a bit more flooded locally into the area.  It'll have many of them competing to get your money, but they'll also want to try and retain the values they got off ebay minus the evaded fees.  Of course the seller will pop back saying, you're not paying the IRS either, so who knows.  20% drop?

[docile tapeworm | 4,198]

go back to money orders instead of paypal? loophole?

[DefaultGen | 5,401]

1 hour ago, docile tapeworm said:

go back to money orders instead of paypal? loophole?

I only send and accept concealed cash in white envelopes.