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

The IRS is trying to catch a loop hole in the tax code. If you are doing that much money in transactions and you get a 1099 for it. You only owe taxes on the profits. If you have a loss then you can write that off your taxable income which will actually save you money.

If you file the EZ form you probably do not have enough deductions unless maybe your losses are more than the standard deduction.

There are a lot of people working "under the table" and it is very frustrating to hear them brag. I pay nearly 40% of my income in income taxes not too mention all the other taxes. These under the table dead beats are draining society and I am paying.

$20,000 is a reasonable limit to set and 200 transactions is as well. With the price of camera gear it does not take much to hit the limit or come close. However at what point does a hobby become a business? There will always be exceptions to every rule. I for one welcome the chance for another deduction.

Greg Edge wrote in post #12494411
The IRS is trying to catch a loop hole in the tax code. If you are doing that much money in transactions and you get a 1099 for it. You only owe taxes on the profits. If you have a loss then you can write that off your taxable income which will actually save you money.

If you file the EZ form you probably do not have enough deductions unless maybe your losses are more than the standard deduction.

There are a lot of people working "under the table" and it is very frustrating to hear them brag. I pay nearly 40% of my income in income taxes not too mention all the other taxes. These under the table dead beats are draining society and I am paying.

$20,000 is a reasonable limit to set and 200 transactions is as well. With the price of camera gear it does not take much to hit the limit or come close. However at what point does a hobby become a business? There will always be exceptions to every rule. I for one welcome the chance for another deduction.

I think I am more concerned about Paypal requiring tax related (SSN, tax ID, etc) information prior to reaching 200 transactions and $20,000. It is evident that they are basing it upon either quarterly sales or another method. I dont mind the IRS inquiring about these hobby transactions. However my wife inquiring..... "You paid how much for that speaker?!!!

this is just one of the reasons i no longer accept paypal.

bigcountry wrote in post #12494602
this is just one of the reasons i no longer accept paypal.

What are some other reasonable options? Bank check, Google checkout, Amazon, ? There has to be at least one easy too use option other than Paypal. What's your experience with alternatives to Paypal?

If you're doing $20K worth of "business" via PayPal, that's a job!

Either quit changing gear like it's underwear or man up and admit it's at least a part-time job if not a full-time one.

FlyingPhotog wrote in post #12494626
If you're doing $20K worth of "business" via PayPal, that's a job!

Either quit changing gear like it's underwear or man up and admit it's at least a part-time job if not a full-time one.

Receiving $20K in funds through paypal doesn't mean anything close to a profit. BIG difference between $20K in profit vs just receiving that much for things you sell off.

If it's unreported income, it's all profit...

FlyingPhotog wrote in post #12494681
If it's unreported income, it's all profit...

Selling something you own after you have used it is not reportable income, unless it was reported as a business expense or otherwise for tax exemptions. This is why you don't report selling your vehicle or your sales from a garage sale. Flipping equipment for a profit, or selling items in bulk would be reportable income.

If you've truly used it, I agree but we all know there are people who buy something, try it once or twice (or just test and pixel peep it) and sell it as LN or "Mint" and get 90-95% of the original price (or more.)

That's not selling used, that's being a "discount gear broker."

BorrowLenses and LensRentals sell used gear, your average gear whore doesn't.

FlyingPhotog wrote in post #12494626
If you're doing $20K worth of "business" via PayPal, that's a job!

Either quit changing gear like it's underwear or man up and admit it's at least a part-time job if not a full-time one.

High end gear can eat up $20k without being a part time job or excessive swapping of gear, especially when the Paypal transactions involve multiple hobbies like watches, boats, audio, home theater, .......

In reality, you don't sell high-end gear where it holds that significant a value. My gear is a capitol investment and they're tools, not a commodity.

Can't speak to the multiple hobby thing but I'll grant that that's a fair concern but, if you're someone who can afford to "dabble" in that many expensive hobbies, more power to you.

FlyingPhotog wrote in post #12494699
If you've truly used it, I agree but we all know there are people who buy something, try it once or twice (or just test and pixel peep it) and sell it as LN or "Mint" and get 90-95% of the original price (or more.)

That's not selling used, that's being a "discount gear broker."

BorrowLenses and LensRentals sell used gear, your average gear whore doesn't.

If they get 90-95% of the money spent back, that still is not reportable income. We can go all day into tax law if you would like, but there are better things to do... I get tired enough of generating nearly 130 pages of tax documentation every March.

well flying photog really has no clue what he is talking about, but that is ok, he is just painting people with a black and white paint brush. i went back and forth 4 - 5 times between the 500 f/4 is and 600 f/4 is. i started out w/ the 600, then sold it for the 500, then regretted it and got the 600 again, couldn't justify keeping both, so i had to sell the 500...i repeated this process over and over, i think it may be the definition of insanity! LOL....but sell 4-5 600 and 500's and it adds up. i also went back and forth on 1d iv's and 1ds iii's...same deal. it adds up.

have i ever turned a profit on a lens, sure...i have several lenses here now that i could sell and make a few hundred bucks, but i have a much bigger project in the works.

and i don't mind being called a gear whore. i like owning camera lenses, even if it's just to try out. it's kinda cool to say you have owned every super telephoto that canon has in current production (except the 1200mm).

i like cash, chase quickpay, money orders, direct bank transfers.

i can't really go into the whole reason why i hate paypal, there are some legalities involved.

paypal/ebay are really horrible. they are not regulated like regular credit card companies are....and can do pretty much what they want...remember to never use funds out of your bank or paypal account, always always use a cc for extra protection.

Funds derived from selling personal items at a loss are not reportable.

I don't mind the 3% fee PayPal charges, it's a bargain for the convenience. What I have a real problem with them on was their expanding SNAD disputes to private transactions (such as those here) opening the door for scammers to buy expensive gear, file a SNAD, and return a worthless item. As long as they have a signature that something was delivered you're screwed. I have not accepted PayPal for the last several expensive items I've sold.

Ebay is even worse. Why anyone would list gear there that is relatively popular is beyond me. For auction style listings their final value fee is now 9% on photo gear. So if you sell a lens for $1000 eBay/PayPal take over $120 off the top.

K6AZ wrote in post #12497550
Ebay is even worse. Why anyone would list gear there that is relatively popular is beyond me. For auction style listings their final value fee is now 9% on photo gear. So if you sell a lens for $1000 eBay/PayPal take over $120 off the top.

Depends on the item.

The 50D I sold I actually could have gotten quite a bit more on eBay, even after all kinds of fees and shipping. People over there drive the price up to sometimes crazy level.