Quote:
Originally Posted by BobC
I've been doing taxes for almost 40 years and have a client that sells on Ebay, so I know what you got yourself into. You neglected to report the results of your online selling activity through Paypal, which obviously sent information about your activity into the IRS for 2014. You should have received a copy of this 1099 form sent from Paypal also. The IRS threshold for having Paypal report to them on an individual is that they have at least $20,000.00 of receipts, and at least 200 transactions, for a calendar year. The person who suggested you may have to determine if your are dealer or just selling collectibles/investments can forget that, at that volume you are most likely going to be considered a dealer by the IRS, trust me. As such, if your business isn't incorporated or set up as some type of Limited Liability Company, you're supposed to file a Schedule C as part of your federal tax return and report your sales activity for the year.
BobC
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Bob,
I just read your post and this got me wondering if you might be overlooking another fairly simple Course of Action. If the items that he sold via paypal in 2014 were actually purchased a certain time ago (is it more than a year?) for this problem lets just say that his stuff was purchased in 2011-2012, can't he simply fill out a Schedule D and not worry about CoGS and begginning inv/end inv etc...??
I am anxious for your answer as it seems to me this would be ok if he held those assets for a long time (sorry not exactly sure if it a year or more?) Please advise, thanks!
Peace, Mike