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  • #61
    Originally posted by JCHannum
    This is the first I have heard of eBay providing a 1099. It will be interesting to see how it plays out if it is indeed a fact.
    I doubt very much they'll go after small-time individuals.

    The bill is intended for PowerSellers like Reliable, who make their living on Ebay, but probably pay no income tax.
    "Twenty years from now you will be more disappointed by the things that you didn't do than by the ones you did."

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    • #62
      It doesn't have anything to do with sellers. The 1099 is a method to report miscellaneous income. If I have an article in HSM, VP will send me a 1099 to report the income.

      Whatever income I receive from my eBay sales comes from the seller, not eBay. There is no way that eBay can submit a 1099 as they have not made any sort of payment to me. They have no way of knowing if the sale was completed, or if the buyer and I negotiated a different price on the sale.
      Jim H.

      Comment


      • #63
        Originally posted by JCHannum
        It doesn't have anything to do with sellers. The 1099 is a method to report miscellaneous income. If I have an article in HSM, VP will send me a 1099 to report the income.
        Ebay and Taxes


        For some reason, the media has finally realized that people selling items on eBay may have tax implications.

        Under no circumstance will eBay be issuing a 1099, at least not at this point. eBay is only a faciliator and has NO part in the transaction (with the exception of PayPal, which is owned by eBay, being involved), other than as facilitator. One of the primary reasons that eBay should not have to issue 1099's is that they have NO way of knowing what if anything has actually been paid. They can only report on the auction itself and nothing more.

        PayPal actually collects and pays over funds to you so they may be required to report all payments made to the IRS. They have all the information in their files to do so. Remember, that you are required to report ALL of your taxable income. If you are selling used household products for less than what you purchased them for, there is no taxable event. If you are engaged in selling products at a profit, you must report every penny.
        "Twenty years from now you will be more disappointed by the things that you didn't do than by the ones you did."

        Comment


        • #64
          Jim, here's a better explanation, from Forbes:

          Coming Soon To eBay: The Taxman

          Are you a spare-bedroom merchant? Time to start reporting sales to the IRS.

          With the economy worsening, more and more people are likely trying to make ends meet by selling goods via eBay, Amazon.com, Google Checkout and other online services. The Internal Revenue Service is fixing to wield a big new weapon to get its cut.

          Desperate to generate revenues by narrowing the "tax gap" (and at the urging of the Bush administration), Congress last year passed legislation requiring processors of third-party payments and settlements--mainly payment card companies and services like Paypal--to report to the IRS individuals and business entities that receive at least $20,000 a year in credit- or debit-card charges from 200 or more transactions. The mandatory reporting, buried in the Housing Assistance Tax Act of 2008, would begin in 2011.
          "Twenty years from now you will be more disappointed by the things that you didn't do than by the ones you did."

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          • #65
            Ebay will be forced to declare all who trade on there forum. With billions of hard currency being traded the global collective cannot resist this slice of cake. And gentlemen it will be supervised by there trusty computer collectors that work diligently 24-7.

            Then every year at the G20 conference they will whittle away at there little schemes making sure there all linked together and on the same page to collect said taxes.

            Taxing the populous is 6000 years old, the only change through out the years is the method of collection.

            This was a post I wrote lately on another forum regarding a similar topic.

            “There is to my knowledge only one really wealthy country whose riches are shared and managed by all equally.

            The rest of the world is shafted by there governments to which they play a global game set up and designed to suppress the middle class.

            It works by empowering the rich to keep them well! rich, by feeding the poor from the middle classes pocket to gain there vote so they keep there jobs. It is all done by taxing the middle class, rigged living and working environments, markets and industry created by the system to keep in check the majority ( middle class ).

            Forget fines, levies, duties, stamps, mortgages, tolls, cost of living etc they are all rolled and summed up and expressed this way Taxes!!! And Taxes = diversion every one of you is caught up in it including me.

            I am a Pipe welder here in Maryland USA. I make around $120,000 a year my income taxes run around 25%, then they take 15% from gross for Federal social security (retirement Fund) Now I have to pay my State tax 6% on my gross income annually, then there is my state sales tax ( everything purchased inside this state ) which is 6%, then there is my property taxes at around 16% based on my property value which is set by the state not the market, then I pay around 20% of my gross income for a private health care program, capital gains income is 30% with no recourse to loss.

            Now compare that with what you make and pay and I guarantee you it works out the same, UK, Germany, OZ, USA, and Canada. It’s done by design. The dollar, pound, Frank, euro is all equally worth nothing. The UK is usually considered to be the world’s highest taxed nation of around 52% gross income with the 17% Vat. Now do your math, if you add up my tax obligations all accept the property tax it = 72% UK = 69% strange Uh!!!? Very close, an irony considering the British wholly perfected the tax system that started in 1066 then they exported it to the USA in 1570, which in turn got there asses kicked out in 1776 because of it, then the USA needed cash in 1917 the income tax was reintroduced based on the British system.

            We are paying $2.63 a gallon of gas here right now, oh!! I hear you say “that’s cheap“, well yes it is but I have been financially raped before I filled up my tank, the tax was collected elsewhere and not put on gas.

            Now saying all that, there exists a special guild where if you take the time and surround yourself with the right people and with a little help from the tax laws, you will end up in the exempt club.

            We own a 10 acre horse boarding stables which my wife works, also I work my machine and weld shop on the side which we put through our farm services business, all my machines, shops, vehicles, land, fuel, computers, clothing is written as write off’s, 30% off the top. Capital equipment is amortized over 5 years giving me a tax credit every year for 5 years. I get low mortgage rates as I am agricultural.

            I will give you a classic example, diesel is $2.95 a gallon which everyone has to pay, but! Since I own a business I can claim on my taxes this, I have a farm truck, work truck both diesel, welder is diesel, and our 50hp tractor is diesel and the farm generator. Now tax law allows me 30% off the top $2.95 = $2.07 then for every gallon purchased I get $0.60 cents Federal credit bringing it down to $1.47. All legal and written in the tax code.

            The only snag is capital gains and profit margins, but there are ways around it, as in the law allows for capital drainage.

            So remember when you purchase your next little boring bar from either your own country or abroad you are all paying the same, the tax cake maybe sliced into different thick nesses but it all tastes the same.

            Wealthy men don’t pay taxes, its designed that way.

            As too the country I stated in my first paragraph, its Norway, they own 75% of the natural gas all supplied to the European Union with a collective population of 670 million people and there reserves head into 2080. They are a socialistic nation with all needs provided for by the state funded by its wealth, with very little corruption in the government the people live well. Not bad for doing a 35 hour mandatory work week uh!.

            Money is the root of all evil and he lives in a Dollar bill, pound, Yen and Euro”

            God bless. Anthony.

            Comment


            • #66
              It does not concern me, as I have always reported my eBay and PayPal income. My main reason for posting is to point out that eBay cannot and will not be issuing 1099s. It seems that TMT and squirrel have bad information.
              Jim H.

              Comment


              • #67
                What happens if the sale on eBay results in a net loss? For example, you purchase an Atlas lathe from a commercial auction for $500 and when you get it home, you discover that the motor is burnt out and there is a crack across the bed in the rear.

                You promptly list it on eBay disclosing the problems and stating that it does not run and is sold only for parts. The sale closes at $250 and the buyer picks it up locally. You lose $250 on the sale.

                There is no income on that transaction. If you receive a 1099 from someone showing that you received $250, it's still not income, it's a loss.

                This is an accounting nightmare for the government but they could care less. They will just hire more worker bees.

                .

                Comment


                • #68
                  Originally posted by JCHannum
                  It does not concern me, as I have always reported my eBay and PayPal income. My main reason for posting is to point out that eBay cannot and will not be issuing 1099s. It seems that TMT and squirrel have bad information.
                  Bad choice of wording on my part, eBay owns paypal and with out paypal you cannot sell on eBay unless you have a merchant acount.

                  Comment


                  • #69
                    Taxing issues

                    Originally posted by gnm109
                    What happens if the sale on eBay results in a net loss? For example, you purchase an Atlas lathe from a commercial auction for $500 and when you get it home, you discover that the motor is burnt out and there is a crack across the bed in the rear.

                    You promptly list it on eBay disclosing the problems and stating that it does not run and is sold only for parts. The sale closes at $250 and the buyer picks it up locally. You lose $250 on the sale.

                    There is no income on that transaction. If you receive a 1099 from someone showing that you received $250, it's still not income, it's a loss.

                    This is an accounting nightmare for the government but they could care less. They will just hire more worker bees.

                    .
                    Not so sure about that.

                    The income and outgoings sides of the ledger are separate and can be or are reconciled later to determine whether there is a net loss or gain.

                    Whether the net gain is reportable and/or taxable is another matter as is whether it is a "hobby" or "personal" or a "business(-like)" deal.

                    A net taxable loss can be "carried over" from successive year to year - but only if you are a "business".

                    The big worry for some may be that if the Tax Office (IRS) "makes inquiries" it may well occur that your local planning or regulatory authorities may be "asked questions" as well which may in turn have them "inquiring" about or to you as (another) "interested party" so that a "snow-ball" or "cascading" series of events may not be to your advantage.

                    It doesn't take long before the "word gets around" if you are being "inquired about" - and all too often, you may be among the last to know.

                    If I have a concern about an item, I will either get an "opinion" from the Tax Office before I lodge my Tax Return/Report or just include it anyway and send a letter attached to the Return. The Tax Office have been excellent in that regard.

                    As my shop etc. is/are "personal" ie "non-business" and as I get no income from it I have no tax to pay on it nor can I claim any taxable deductions either, nor do I do any work (paid for or not) for others. As I never sell anything, I have no gains at all - taxable or otherwise.

                    My shop is within all the local planning and regulatory requirements as well - ie it is not a "non-conforming use".

                    Comment


                    • #70
                      Originally posted by squirrel
                      Bad choice of wording on my part, eBay owns paypal and with out paypal you cannot sell on eBay unless you have a merchant acount.
                      As I understand it, PayPal will issue what will be called 1099k's to vendors who have more than $20,000 in sales and 200 sales per year. This will go into effect in 2011. The first 1099k you will see will be Jan 2012. This will not have much effect on the casual seller, and will merely provide additional documentation to the seller who has been reporting his sales properly. It will get the guy who has been dodging his taxes and rightly so.
                      Jim H.

                      Comment


                      • #71
                        Originally posted by gnm109
                        What happens if the sale on eBay results in a net loss? For example, you purchase an Atlas lathe from a commercial auction for $500 and when you get it home, you discover that the motor is burnt out and there is a crack across the bed in the rear.

                        .
                        Assuming you meet the $20,000/200 sales rule, then you just file a Schedule C declaring your ebay income as well as your "expenses", in this case the original cost of the lathe.

                        What I don't understand is how they handle sales of items that were not purchased in the same year. There will probably have to be a modification to the Schedule C form to accommodate that. You *might* even be able to take the loss as a deduction, depending on your other circumstances and how the IRS handles the new 1099k

                        What I do know for sure is that if you sell a bunch of stuff on ebay for a loss, e.g. cleaning out your garage, you do not owe taxes on those amounts.

                        What I find interesting about the new 1099k is that it breaks down your income by month, so the IRS can be sure you are paying your quarterly taxes on time.
                        Lee

                        Comment


                        • #72
                          Taxing times

                          Originally posted by JCHannum
                          As I understand it, PayPal will issue what will be called 1099k's to vendors who have more than $20,000 in sales and 200 sales per year. This will go into effect in 2011. The first 1099k you will see will be Jan 2012. This will not have much effect on the casual seller, and will merely provide additional documentation to the seller who has been reporting his sales properly. It will get the guy who has been dodging his taxes and rightly so.
                          Thanks Jim.

                          I had rather hoped that a post similar to that would come up.

                          While I agree with you that that is on the basis of "transactions" on or by or with a single provider of those services and that if you have multiple providers none of which exceed those limits, that, on the face of it, you or your transactions will not be reported.

                          That does not prevent the Tax Office or IRS "trawling" those types of providers to see how often you appear and what your aggregate or grossed-up over-all figures are for any period.

                          It could be triggered by the tax returns and documents that your sellers are required to submit.

                          There are all sorts of "red flags" that may cause the TO/IRS to at least "have a look" at you and your affairs.

                          Jealous or vindictive or vexatious competitors, "friends" or neighbours can trigger such an outcome - and you would never know.

                          Its not hard to rack up the numbers and cash value on an aggregated basis.

                          Sometimes, for no real or apparent reason, the TO/IRS will just take a "shot in the dark" anyway and if you come up in the lottery you will "get a call". If the resultant cursory checks come up with nothing of concern, they wish you good day and get on with other inquiries. But if they DO find "something of interest" or have a question that you cannot answer satisfactorily, they may well elect to pursue the matter (and you?) further.

                          I don't think I'd want to be on a Government pension or benefit if I "got caught" as those departments - amongst others - "talk to each other".

                          I buy a lot of tools and computer stuff and I am quite sure that if any of those suppliers were investigated as regards tax or bankruptcy etc. that there is a good chance that my name on their records will come up as they issue me a receipt for everything I buy from them whether paid for in cash or by direct debit or EFT from my account via my credit card. It just so happens that here in OZ, the bankruptcy people are in the Tax Office and that the TO is almost always a creditor (unpaid taxes etc.) and may have even initiated the bankruptcy.

                          I have no concerns, nor am I the least paranoid about any of this as I am convinced that its easier and cheaper to pay "up front" than not.
                          http://en.wikipedia.org/wiki/Paranoia

                          Comment


                          • #73
                            Originally posted by JCHannum
                            It does not concern me, as I have always reported my eBay and PayPal income. My main reason for posting is to point out that eBay cannot and will not be issuing 1099s. It seems that TMT and squirrel have bad information.
                            Read my thread. They won’t issue the 1099 they don’t have too; all they will be required to do is report. Once it’s in the system you’re done.

                            If you’re a business man you would see this.

                            Anthony.

                            Comment


                            • #74
                              Originally posted by ieezitin
                              Read my thread. They won’t issue the 1099 they don’t have too; all they will be required to do is report. Once it’s in the system you’re done.

                              If you’re a business man you would see this.

                              Anthony.
                              Um, that is what I said. eBay will not issue a 1099, or be required to report anything. They are nothing but agents. PayPal will issue a 1099k in the instances I have described in the later post.
                              Jim H.

                              Comment


                              • #75
                                The one good thing is eBay prices will drop! You would be shocked at the number of people buying at the auctions to specifically sell on eBay, I have seen the same people for many years working on the "cash economy". They have also driven the live auction prices up an average of 200% over the last 6 years.

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