Do over 200 transactions or $20k in payments from PayPal? Take note

I am not a dealer and not a professional either and still mine may be over $20K.

When I sell stock (hopefully for a profit, sometimes at a loss), my broker sends a 1099 to the IRS and I have to reconcile it on my taxes. I guess it makes my tax return more complicated, but really, it's not that big a deal. I'm pretty sure there is no floor on those transactions. Sell 2 shares -- 1099.

What's the difference between playing the stock market and playing the gear market? At least the IRS will be giving you a little "garage sale" room before the laws kick in. There's really no room to **** on this.

And this truly is about playing the gear market. I'm sorry you feel you're getting caught up in the same net as folks running real retail businesses out of their basements without paying taxes. If you're a pro and you're upgrading your tools, that goes under the heading of capital expenses and liquidation. But if you're just moving a lot of gear, it's hard to make a distinction between a used lens and a used car. With either, if you're selling one or two a year, you're a private seller. If you're moving one or two a month, you've crossed a line. You've turned a hobby into a business. Like it or not, you're a dealer.

It stinks when you're right at the threshhold and getting hassled about the taxes without much, if any, profit. But whereever you put the line, somebody is going to be right on it. My advise would be to get bigger or get smaller. Either embrace the business or scale back on the amount of gear you blow through.

If you're doing enough business that you've caught the attention of the IRS, good for you. Good for the economy. Good for America. Now pay your taxes.

drsilver wrote in post #10330031
When I sell stock (hopefully for a profit, sometimes at a loss), my broker sends a 1099 to the IRS and I have to reconcile it on my taxes. I guess it makes my tax return more complicated, but really, it's not that big a deal. I'm pretty sure there is no floor on those transactions. Sell 2 shares -- 1099.

What's the difference between playing the stock market and playing the gear market? At least the IRS will be giving you a little "garage sale" room before the laws kick in. There's really no room to **** on this.

And this truly is about playing the gear market. I'm sorry you feel you're getting caught up in the same net as folks running real retail businesses out of their basements without paying taxes. If you're a pro and you're upgrading your tools, that goes under the heading of capital expenses and liquidation. But if you're just moving a lot of gear, it's hard to make a distinction between a used lens and a used car. With either, if you're selling one or two a year, you're a private seller. If you're moving one or two a month, you've crossed a line. You've turned a hobby into a business. Like it or not, you're a dealer.

It stinks when you're right at the threshhold and getting hassled about the taxes without much, if any, profit. But whereever you put the line, somebody is going to be right on it. My advise would be to get bigger or get smaller. Either embrace the business or scale back on the amount of gear you blow through.

If you're doing enough business that you've caught the attention of the IRS, good for you. Good for the economy. Good for America. Now pay your taxes.

You are assuming that people receiving monies are selling items to make a profit or are utilizing the assets of said money exchanges in a home business. Alas, this does not allow for many scenarios, like you decide to liquidate alot of equipment, or sell alot of stuff that didn't go out at the garage sale via craigslist/paypal, or receive gifts from family and friends.

Alot can happen in one year hitting your paypal account that HAS NOTHING TO DO with buying/selling equipment at a loss or profit. That is the hole in your argument. You need to stop concentrating on just one tiny aspect of how somebody receives money through the year. I understand your point, but it comes down to the fact that we are trending toward laws that appear to be in the 80/20 arena, inconvenience 80% for what the 20% does.

The politicians had no good answer for this, and sadly this was the best they could do, and then snuck it in with a bunch of other stuff. Gotta love pork...

Only the addition of the reporting obligation has changed. It doesn't matter if it's business or personal, in reality, practically everything you make a profit on is taxable.

If you sell an camera you owned for only personal use and make a profit, your gain is taxable as a capital gain, on Schedule D of your 1040.

In fact, if you find a camera by the side of the road it is taxable at fair market value in the first year it is in your possession.

Even illegal activities such as drug dealing are taxable. "Income from illegal activities, such as money from dealing illegal drugs, must be must be included in your income on Form 1040, line 21, or on Schedule C or Schedule C-EZ, (Form 1040) if from your self-employment activities." (I wonder how many drug dealers comply with that requirement. :eek

If you make money on it they want their share!

Pinto wrote in post #10332188
Only the addition of the reporting obligation has changed. It doesn't matter if it's business or personal, in reality, practically everything you make a profit on is taxable.

If you sell an camera you owned for only personal use and make a profit, your gain is taxable as a capital gain, on Schedule D of your 1040.

In fact, if you find a camera by the side of the road it is taxable at fair market value in the first year it is in your possession.

Even illegal activities such as drug dealing are taxable. "Income from illegal activities, such as money from dealing illegal drugs, must be must be included in your income on Form 1040, line 21, or on Schedule C or Schedule C-EZ, (Form 1040) if from your self-employment activities." (I wonder how many drug dealers comply with that requirement. :eek

If you make money on it they want their share!

But for those of us who don't run a side business of buying and selling gear for profit when we sell gear it's usually at a loss. To this point I have never deducted photo gear that I have bought, I've only deducted rental fees when I've had to rent gear for business purposes. All this may change when this new reporting goes into effect and I'll decide how to handle all of this then.

K6AZ wrote in post #10332564
But for those of us who don't run a side business of buying and selling gear for profit when we sell gear it's usually at a loss. To this point I have never deducted photo gear that I have bought, I've only deducted rental fees when I've had to rent gear for business purposes. All this may change when this new reporting goes into effect and I'll decide how to handle all of this then.

The only thing I would recommend it that people keep good records of their buy/sell transactions.

How can I do if I buy say on CL and pay cash and then sell it on say e-bay?

alpha_1976 wrote in post #10332642
How can I do if I buy say on CL and pay cash and then sell it on say e-bay?

Get receipts from the people you buy from on CL. That may have an added benefit of weeding out those trying to sell stolen gear.

I guess the receipt has to be notarized or something like that, right? Something written on plain paper does not mean anything? The original receipt would be of no use as well as used stuff will be cheaper.

I don't think it would need to be notarized. Just buy a receipt book at an office supply store and make sure the person you buy from is who they say they are and get their name, address, and phone number on the receipt.

Oh that's easy. Thanks

When you receive a receipt from a retailer it isn't notarized.

Reviving an old thread but I've recently experienced this new policy. Paypal locked me out of use until I provided a tax ID or SSN. I have not had 200 transactions during 2011 but I'm assuming they are basing it on my monthly Ebay buy and sell numbers and estimating for an annual transaction number. I have sold a few items on Ebay and a few items here but one high end home theater projector sale probably sparked this. I think its ridiculous. Now I have to deal with the annual accounting of hobby transactions verifying that I have not profited from these transactions. It makes me think twice about selling high dollar items using Paypal.

I wonder what about "Gifts" sent from PP. It's not really a "sale:.

RHChan84 wrote in post #12493955
I wonder what about "Gifts" sent from PP. It's not really a "sale:.

I would personally avoid gift payments all together. It can cause a Paypal ban and has no protection for either party. That being said, I doubt anyone would accumulate that much in gift payments. If so, it would almost definitely be caught by Paypal.