New Tax Law for selling.

WTF! So you pay tax for a used item you sell, that you already paid tax on when you bought it?

strobe monkey wrote in post #19469400
WTF! So you pay tax for a used item you sell, that you already paid tax on when you bought it?

No you only pay tax on the profit you make when you sell it. Myself I would be happy to pay the tax but I never sold anything for more than what I paid for it. Before all is said and done I think the $600
they originally will rise substantially. I sure they put it off this year because they realized they would be buried in 1099 forms.

strobe monkey wrote in post #19469400
WTF! So you pay tax for a used item you sell, that you already paid tax on when you bought it?

Wow...finally somebody gets why I brought up the change in reducing the limit to $600 (originally intended to take effect in 2022)! Nobody 'got it' before you, that I can recall in threads on this topic.

I sold a Beseler 45V-XL enlarger with Universal head and three enlarging lenses, and I no longer have purchase receipts to prove it was my personal property purchased new about 30 years ago. If the buyer had paid via Zelle or Paypal, I would have the problem of proving my purchase price was three times what I sold it for and NOT 'all profit'...and taxed for a second time for the recovery of my already-taxed money by selling my personal property.

Furlan wrote in post #19469419
No you only pay tax on the profit you make when you sell it.

And how do I prove what I paid for a new Beseler 45V-XL and new enlarging lenses 30 years ago, and sold it for a small fraction of my original purchase price?!

for now anyway, the $600 thing has been shelved, probably after tons of pushback. https://www.irs.gov …nt-platforms-forms-1099-k

goalerjones wrote in post #19469949
for now anyway, the $600 thing has been shelved, probably after tons of pushback. https://www.irs.gov …nt-platforms-forms-1099-k

Not shelved, just delayed a year. It’s in effect for this year’s transactions.

Thanks for everyone's comments. I've sold quite a bit of old equipment this year. This info will come in handy!

Wilt wrote in post #19469582
Wow...finally somebody gets why I brought up the change in reducing the limit to $600 (originally intended to take effect in 2022)! Nobody 'got it' before you, that I can recall in threads on this topic.

I sold a Beseler 45V-XL enlarger with Universal head and three enlarging lenses, and I no longer have purchase receipts to prove it was my personal property purchased new about 30 years ago. If the buyer had paid via Zelle or Paypal, I would have the problem of proving my purchase price was three times what I sold it for and NOT 'all profit'...and taxed for a second time for the recovery of my already-taxed money by selling my personal property.

This isn't tax advice. If you get audited, you're on your own.

Still, just put down a good-faith number for the original purchase price. The IRS knows that if you sold something for money, you probably paid more than $0 to acquire it in the first place. If the number you put down is based in reality, in the unlikely event you're ever asked to defend that number, with or without receipts, the IRS will probably accept your explanation. This is especially true if you don't have enough transactions to demonstrate a pattern of overvaluing costs.

We've been warned, though. My whole life, selling old stuff to fund new stuff has been part of my game, and you know I'm in the hole. I keep pretty good records already, but now it's official.

drsilver wrote in post #19487902
This isn't tax advice. If you get audited, you're on your own.

Still, just put down a good-faith number for the original purchase price. The IRS knows that if you sold something for money, you probably paid more than $0 to acquire it in the first place. If the number you put down is based in reality, in the unlikely event you're ever asked to defend that number, with or without receipts, the IRS will probably accept your explanation. This is especially true if you don't have enough transactions to demonstrate a pattern of overvaluing costs.

We've been warned, though. My whole life, selling old stuff to fund new stuff has been part of my game, and you know I'm in the hole. I keep pretty good records already, but now it's official.

Because starting in 2023 tax return you may be considered guilty (owing tax on so-called 'income' which is actually a 'sale of personal property') because of otherwise inability to prove your innocence!

Wilt wrote in post #19487909
Because starting in 2023 tax return you may be considered guilty (owing tax on so-called 'income' which is actually a 'sale of personal property') because of otherwise inability to prove your innocence!

Are you a tax attorney? Professional tax advisor?

Capn Jack wrote in post #19487914
Are you a tax attorney? Professional tax advisor?

I am giving no advice, merely stating a layperson's expectations of how reality plays out.
Earlier in this same thread, I stated what a tax advisor had told me about how they would handle same situation, and declared that as coming from said tax advisor retained by TurboTax.

Wilt wrote in post #19487918
I am giving no advice, merely stating a layperson's expectations of how reality plays out.

Good that you made it clear.

Wilt wrote in post #19487909
Because starting in 2023 tax return you may be considered guilty (owing tax on so-called 'income' which is actually a 'sale of personal property') because of otherwise inability to prove your innocence!

I think you're overestimating the IRS concern over the sale of your Beseler. (Nice kit, BTW. I worked under a 23C every day for a lot of years. Nikon shooter.)

If you need to put down a purchase price, tell them the truth, to the best of your recollection. They'll take that.

If you're running a business, buying low, selling high, making a profit, the IRS can tell and will want its piece.

DylanScotland wrote in post #19514388
It can definitely seem like you're being double-taxed on items you sell that you've already paid tax on when you bought them. However, keep in mind that taxes can be a complicated and nuanced topic. So, it might be worth looking into more details and consulting with a tax professional to fully understand how the law affects you.

It's really two different taxes with regards to buying and selling. Upon purchase, you pay a state sales tax on the purchase amount -- assuming you are in a state that has a sales tax. When you sell the equipment, you will be on the hook for a federal income tax, but only if you make a profit on the item (i.e. sell it for more than you paid), and then you are only on the hook for the profit -- not the actual amount the item sold for.

We have been selling a lot of different items we have accumulated over the years, and starting last year I began keeping a spreadsheet of everything we sold. For each item, I list the price and date sold, and the price and date the item was acquired (to the best of my recollection). We were "in the red" last year (total sales were at a loss), and we will be again this year. So, we shouldn't have to pay any income tax. Our accountant will get a copy of the spreadsheet, so she can figure out how to file the loss -- that's what we pay her for.

This law has been in place for years, it was just different limits before a 1099K was issued by a payment vendor, like paypal.

I have had to deal with this for what seems like years. I have always reported any income that was business related, but personal sales would push me over the reporting limit, so then I had to list the sold assets that were a loss on one of the tax forms to offset those items. This just means now just about everyone is affected by this.

I worked around this eventually by having people pay for personal items through my wife's paypal account, and then mine was limited to solely business, this way there was a separation. In any case, you will likely need to keep a spreadsheet of big ticket items you buy, with date and amount, and then when you sell, you can reference that for the details of the original purchase, like a google sheets page or something.

It certainly stinks for the common folks that don't actually have businesses and would like to sell off things to pay for other things or just to downsize.