PayPal 24% tax hold

[BobC]

Originally Posted by Fred

Bob,

We all know who the greatest lefty of all time is and we all agree who shouldn't be in the HOF...

What this tax reporting means to me is that if I ever decide to start selling on ebay or other platform that uses e-payments, then I better be prepared to have a full accounting items that are being sold (which includes purchase price of the items sold).

What a pain. Going forward, people better be prepared to treat this like a business with full accounting efforts. I'm going to guess that a lot of people that were buying/selling to add to a few bucks to their income or have a few extra "hobby" dollars are really going to dislike this. Selling cards will be like day-trading. Better keep tabs of everything.

Fred,

That coming up with tax cost basis is not a problem you alone are going to face at some point in the future, Many other collectors are in a similar boat and will have to also deal with it at some point. As I've said in the past, people should at least still go ahead and try to make reasonable estimates as to what their tax cost basis is, and be sure to include those estimated basis costs on their tax returns. The IRS does not summarily dismiss or disallow estimates when actual records are not always available or exist. They help, of course, but even the IRS can't rationally argue you may not have any cost basis at all for items you bought, where the seller only allowed you to pay them in cash, and never gave you a receipt. And if you do a reasonable and somewhat responsible job of trying to estimate tax cost basis of items sold, chances are the IRS isn't going to be wasting time coming to look for you anyway. Another big reason to file your tax returns accurately and completely the first time, so the IRS has no reasons to come back and look into your return further and ask more questions.