that is what my accountant said as well. So you buy the hot new comic this year for $3.99 you deduct that this year, they make a movie of the character in a few years and sell it for $100, you do not deduct the $3.99 from the years taxes.
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Question: the $600 limit is it based on after eBay cost or pre-eBay Fees? Also if I sold my “grandma” china and I still have the receipt it can help reduces taxes, I think.
For instance, Grandma China was bought for 1200 and now sold for 800 that a -$400 loss, can I call for capital loss and write off as a tax deductible?
So in that case they still send you the tax documents for the $800 sale, then you have to prove the loss via receipts from Grandma’s china
So answer is yes then? As long as I can prove my deductible, I can get tax returns. This can turn out to be a double edge sword for FEDS. If sell my store variant cover (most of time these variant go down), so I’ll sell the unpopular and unwanted store variant cover for a loss lol. To get the write off. LOL.
The complicated part is if Grandma bought the China, and I sold china, can I use her tax receipt (on her credit card) to offset of my cost?
I asked these questions a while back. I believe the $600 threshold (and 1099k) is what eBay collects from the buyer, including shipping.
The 1099 will not have eBay fees or shipping deducted from it. You have to do that in your taxes as deductions.
The 1099 will not include the buyers sales tax, however Since your eBay fee totals are based on the “total sale”
including the buyers state sales tax, the 1099 will have a little extra…very small amount (I think I calculated it to be 1/2 of a percent added…so 50 cents for every $100 of 1099 income reported. Bastards).
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Grandma’s China is a bad example I am afraid. The main reason is she purchased it and gave it to you. You had no expense. So there is nothing to write off. But let’s say you stumbled upon China at the old lady’s yard sale. Recognizing the China pattern as having value. You buy the China for $100, full retail according to your copy of Overstreet The Guide to China prices out at $800 but you get $600. You did not take a loss by not selling at full profit but have a capital gain of $500. So ebay 1099’s you, you claim cost, minus shipping cost, and the box and bubble wrap you purchased to ship it out. The remaining amount is your taxable income. However, in the process you purchased an extra $500 worth of China to sell at the neighbors yard sales. You have that listed on eBay as well. You could write that expense off too as inventory. Now effectively bringing your taxable income down to $0. Problem is, January 1 2023, the China market suddenly becomes super fashionable to the hipster crowd, and your China sells for $1000, for 2023 you have no expenses to write off and now are facing a tax bill on that amount.
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Based on what you said, so my mom buys me a bike and I sold the bike. can I use my mom’s receipt as write off for my bike.
This concept effectively can be applied on all FLEA market and garage sale, so everyone who’s doing this have most likely avoided taxes. Also I know comics can be considered as collectible (TAXED at 28%), then again, I can say unwanted item. What makes me have to classify it as “collectible” after all I’m not selling AF15 or TEC 27. Can I get away by selling these as “unwanted item” instead classifying them “collectible” The argument can be made about cars. Can you call every car used car collectible? Acura NSX or Toyota Supra or Porsche? are they collectible?
To sell items that aren’t purchased by you you would claim your profit on the item. So if you were like an extinct eBay store or Mycomicshop or Heritage and you charge a set percent like 60% for selling the item, you would pay tax on only your percent you charged not the whole selling price.
It just sort of sucks that it is something to worry about. I understand if you do it as a real side Hussle and the income is substantial, but $600 bucks these days is nothing.
The entire thing has made me just not want to sell anything, anywhere and that’s just too bad. I’ve always enjoyed selling things here and there on eBay just to fund a trip, projects, whatever. I’ve been on ebay since it started. So many people make ends meet through sales like we’re discussing.
It just gets into the whole nonsense of the world these days. You want to gain income from the sales of my stuff for what? I’m tired of getting bent over from a tax perspective and getting zero return on it.
You artificially raise the value of my home on paper so you can tax the hell out of me and then still need to put every damned millage and the proposal there is because the massive property tax hikes aren’t enough.
Sorry…rant over…just returned from my Thanksgiving grocery trip and can’t believe the costs. I’m a big coupon and Ibotta user and it still hurts.
Greedy ass government has me irritated.
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The thing that gets me is the $600 threshold seems to have come out of nowhere… and it’s a HUGE change from the previous thresholds… don’t know what data they pulled to make such a drastic adjustment…
$600 is nothing….especially given whatever it was based on is likely obsolete given how long ago the decision was made and I highly doubt it’s accounted for inflation anywhere near what we’ve seen recently.
This will be national news in January once the 1099s hit and everyone is getting their credit card bills from holiday spendings and heating their homes in the coldest month.
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I could see it getting repealed and raised to something like $10,000 after everyone throws a fit.
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I think it was already set to $600 in some states, so they probably used that same amount to keep things somewhat simpler.
I could imagine that politicians from one of those states with the $600 threshold pitched the idea to their Fed partners as a way to get back some stimmy money.
Possibly, but more likely during an election cycle when it can be used as a campaign issue.
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They really should adjust it for the inflation the last two years that $600 from two years ago is now worth about half today.
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That’s just it. $600 casts a big net. Every penny they get helps fund a government that is currently running a $30+ trillion deficit, I don’t think people really understand how big $30trillion is. Congress needs to live lavish lives. everybody needs to pitch in. *=sarcasm
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It was 20,000 before they dumped it to $600, so yeah…
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Exactly. You drop it to 600 then raise it up to 10,000 and people are happy now as opposed to being mad if you had gone from 20k to 10k. It’s a mess either way.
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$20k to $600 is a free fall. And yes, they are trying to get the small businesses to pay up. I totally expect most to throw the 1099 in the trash and say “you can’t come after all of us.”
I know the IRS hired a lot this year. It’ll be interesting to see how they react and what formula they’ll use to determine who to audit, because this will likely be chaotic.
Although I could deduct expenses for travel and home office, I also know those are “triggers” for audits in the past. So I think many will take advantage of those and do their best to get back to a net of $0. And could win themselves an audit.
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I think this was their thinking from the beginning for an “easy” political win by whatever side controls these decisions at the time.
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Such great points by everyone.
I know it sunk in quite some time ago; but the actual reality of it is going to hit real soon.
And it really stinks what was done
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Yeah. Both Democrats and Republicans voted for it and now both are blaming each other that it’s getting so much heat. It’ll probably get adjusted and everyone will take credit and refute blame. So it goes.
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