ebay authenticity guarantee limits now 250/750

[jchcollins]

Originally Posted by BobC

Yeah, it may have seemed innocent to you and me, but to Ebay it has always been serious business to them. It is just that we maybe haven't really been paying attention to everything they're doing until more of these recent moves that seem unusual to many. I would think most everything Ebay does is calculated and with a purpose that they aren't going to just openly tell us about.

Bob, the point of all this seems to be that the serious business and profit motive are not necessarily in the best interest of all buyers / collectors. Would you agree? Of course eBay is not going to advertise their motives in detail to their customer base.

I would think that this means that many are looking for ways around such formal platforms with fee structures and tax reporting requirements. To your earlier point, many (N54 is one) still exist, and I would guess that other ways to do business off the cuff would continue to arise.

Interestingly enough, the one thing I saw on Facebook last night related to this authentication model, and the customer was very happy with it. Of course he had just bought a '52 Topps #311, so that might have been worth waiting an extra 2 days for.

[BobC]

Originally Posted by jchcollins

Bob, the point of all this seems to be that the serious business and profit motive are not necessarily in the best interest of all buyers / collectors. Would you agree? Of course eBay is not going to advertise their motives in detail to their customer base.

I would think that this means that many are looking for ways around such formal platforms with fee structures and tax reporting requirements. To your earlier point, many (N54 is one) still exist, and I would guess that other ways to do business off the cuff would continue to arise.

Interestingly enough, the one thing I saw on Facebook last night related to this authentication model, and the customer was very happy with it. Of course he had just bought a '52 Topps #311, so that might have been worth waiting an extra 2 days for.

John,

I absolutely agree some business, like Ebay, isn't necessarily doing things for the benefit of their buyers and sellers, they are doing it for their own bottom line. Don't forget, Ebay is a publicly traded company since 1998, and answers to their shareholders, not their buyers and sellers. It just works out that in some instances, what is good for Ebay, is to be doing good things for their buyers and sellers so they keep coming back.

Ebay didn't start collecting sales taxes on behalf of all sellers because they wanted to. Same with things like these authentication programs. Ebay was doing well and making lots of money before instituting such changes, why would they suddenly decide to go through all the additional time, effort, expense, and hassle to do these new things if they didn't think it made sense to them from a business standpoint in the long run?

And as you noted, some of these new changes they've made are actually going to work against Ebay's business. Like sales taxes being collected on all sales now. Buyers hate that they are now getting hit with sales tax on everything. Just go back and read posts from some members on here in threads right after that new rule was put into effect by Ebay. So Ebay may lose some buyers from making that change. But in doing so, Ebay is likely also thinking about the additional hassle and work their sellers are going to have to now deal with in regards to sales taxes, and how that may drive many of them to stop selling on Ebay. So by taking on the sales tax collection, remitting and reporting obligation for all sellers, it removes that burden from them and makes them more likely to continue selling on Ebay. And something else many people probably didn't even consider, it also appeases many of the bigger sellers on Ebay who would have had to start collecting sales taxes in various states due to that Supreme Court decision back in 2018 regarding sales taxes for online sellers, South Dakota vs. Wayfair. Because of their larger sales volume, many of these bigger Ebay sellers would be forced to start charging sales taxes in many states, whereas the smaller Ebay sellers wouldn't reach those thresholds requiring them to collect sales taxes, and wouldn't ever have to charge sales taxes on sales made to other states. This would give an unfair advantage to smaller Ebay sellers over the big sellers, which would piss the big sellers off. By Ebay deciding to just handle the sales tax themselves on all Ebay transactions, it appeases all the sellers, and especially their biggest sellers, by not giving some of their competitors who otherwise wouldn't have to charge a sales tax, a price advantage over them due to the sales tax. Ebay may lose some customers who don't want to pay the sales tax, but they won't lose them all. But if you lose the sellers, there are no Ebay customers at all because nothing is being sold.

See the logic behind such a business decision? I'm guessing there is similar thinking and logic behind these other decisions and changes Ebay has been making as well.

[Exhibitman]

Then don't be a business on eBay. eBay is no longer meant for scofflaws who want to hide taxable income or for dealers who want to pretend that they are hobbyists or investors rather than dealers.

Personally, I love selling on eBay because they determine, collect and remit the damned sales taxes for me. No muss, no fuss. Makes reporting my sales taxes each quarter a snap.

As for taxation, without getting into the specifics, filing as a business gives you a lot of flexibility in terms of timing, realizing and offsetting losses and claiming expenses.

[BobC]

Originally Posted by Exhibitman

Then don't be a business on eBay. eBay is no longer meant for scofflaws who want to hide taxable income or for dealers who want to pretend that they are hobbyists or investors rather than dealers.

Personally, I love selling on eBay because they determine, collect and remit the damned sales taxes for me. No muss, no fuss. Makes reporting my sales taxes each quarter a snap.

As for taxation, without getting into the specifics, filing as a business gives you a lot of flexibility in terms of timing, realizing and offsetting losses and claiming expenses.

What about the person that uses Ebay maybe a couple times a year to sell off a collectible they've upgraded, to generate some money for another purchase, or to cash in because they feel the market is right? Are they all dealers just because they used Ebay? See, this is one of the issues with dropping the 1099 reporting sales threshold from $20,000 down to $600. Someone who truly is just a casual seller and not really a dealer may now get targeted as being in an ongoing business because of the low sales reporting threshold amount.

Is someone who has a garage sale every year in a legal business? I don't believe so. So what is the difference if they use Ebay as their garage sale format instead, especially over these past couple of years due to the Covid issues? Using Ebay in and off itself does not a business make, which it sounds like you are kind of alluding to.

[Lorewalker]

Originally Posted by BobC

What about the person that uses Ebay maybe a couple times a year to sell off a collectible they've upgraded, to generate some money for another purchase, or to cash in because they feel the market is right? Are they all dealers just because they used Ebay? See, this is one of the issues with dropping the 1099 reporting sales threshold from $20,000 down to $600. Someone who truly is just a casual seller and not really a dealer may now get targeted as being in an ongoing business because of the low sales reporting threshold amount.

Is someone who has a garage sale every year in a legal business? I don't believe so. So what is the difference if they use Ebay as their garage sale format instead, especially over these past couple of years due to the Covid issues? Using Ebay in and off itself does not a business make, which it sounds like you are kind of alluding to.

I understand what you are saying Bob but don't taxpayers have to meet certain qualifications to be deemed being in business? I did not think how the income is reported dictated that but maybe only played a part in whether someone was in business or not.

[BobC]

Originally Posted by Lorewalker

I understand what you are saying Bob but don't taxpayers have to meet certain qualifications to be deemed being in business? I did not think how the income is reported dictated that but maybe only played a part in whether someone was in business or not.

Yes, but there is no specific, black and white list or measure to definitively say you are in business or are not. It is a grey area, to be determined by facts and circumstances in each unique situation. As I was saying, getting a 1099 can initially give the impression that you are operating a business on Ebay, and if you get one but fail to include the info from it on your tax return, when the IRS comes calling, do you think they'll view the income you may have earned from selling a card as a long term capital gain automatically? I don't think so. LOL That 1099 doesn't tell the IRS what you were selling. For all they know, you were selling widgets. So they generally assume the worst case scenario for taxpayers (and the most tax being owed to them), figuring that will get a response and explanations and answers back from the taxpayer.

The IRS actually follows a list of nine different factors they will look at to help determine if you are operating as a business, or if you are really in a hobby. The additional idea of being an investor for tax purposes is fairly new, and hasn't really been formally addressed by the IRS, yet, as sports cards being considered as true investments, like stocks and bonds. The following article lists the nine factors the IRS and their agents follow, which as you'll quickly see, are not yes or no, or black and white, questions or measures.

https://www.thebalancesmb.com/is-thi...a-hobby-397675

These factors are really more for situations where someone in a hobby is trying to be able to deduct the costs and expenses of it against their other income. With the way card prices, especially vintage, have gone up in recent years, most people with vintage collections they've had for years will not be worried about selling at losses. However, look at a modern collector who spent a ton of money on a modern rookie, that ended up being a bust. He ends up dumping it for a big loss, and tries to use that loss to offset his other income on his tax return. Here's where those nine factors can come into play.

[Lorewalker]

Originally Posted by BobC

Yes, but there is no specific, black and white list or measure to definitively say you are in business or are not. It is a grey area, to be determined by facts and circumstances in each unique situation. As I was saying, getting a 1099 can initially give the impression that you are operating a business on Ebay, and if you get one but fail to include the info from it on your tax return, when the IRS comes calling, do you think they'll view the income you may have earned from selling a card as a long term capital gain automatically? I don't think so. LOL That 1099 doesn't tell the IRS what you were selling. For all they know, you were selling widgets. So they generally assume the worst case scenario for taxpayers (and the most tax being owed to them), figuring that will get a response and explanations and answers back from the taxpayer.

The IRS actually follows a list of nine different factors they will look at to help determine if you are operating as a business, or if you are really in a hobby. The additional idea of being an investor for tax purposes is fairly new, and hasn't really been formally addressed by the IRS, yet, as sports cards being considered as true investments, like stocks and bonds. The following article lists the nine factors the IRS and their agents follow, which as you'll quickly see, are not yes or no, or black and white, questions or measures.

https://www.thebalancesmb.com/is-thi...a-hobby-397675

These factors are really more for situations where someone in a hobby is trying to be able to deduct the costs and expenses of it against their other income. With the way card prices, especially vintage, have gone up in recent years, most people with vintage collections they've had for years will not be worried about selling at losses. However, look at a modern collector who spent a ton of money on a modern rookie, that ended up being a bust. He ends up dumping it for a big loss, and tries to use that loss to offset his other income on his tax return. Here's where those nine factors can come into play.

And I read ya loud and clear. There is no place on the tax forms to supply answers to those questions and it likely would not be until an audit that most people would even think about the 9 factors. I understand the implication of the 1099 and how it would make most people feel getting one.

[perezfan]

Originally Posted by BobC

What about the person that uses Ebay maybe a couple times a year to sell off a collectible they've upgraded, to generate some money for another purchase, or to cash in because they feel the market is right? Are they all dealers just because they used Ebay? See, this is one of the issues with dropping the 1099 reporting sales threshold from $20,000 down to $600. Someone who truly is just a casual seller and not really a dealer may now get targeted as being in an ongoing business because of the low sales reporting threshold amount.

Is someone who has a garage sale every year in a legal business? I don't believe so. So what is the difference if they use Ebay as their garage sale format instead, especially over these past couple of years due to the Covid issues? Using Ebay in and off itself does not a business make, which it sounds like you are kind of alluding to.

I've never paid taxes on stuff I've sold at garage sales (not that it amounted to much money). But then again, I never knew that we were required to... especially since virtually everything gets sold at a "bargain basement" style loss.

And what about the guy who sells his cards for cash, to a guy working the booth at a trade show? Or even the guy renting the booth, who sells the cards? I have a feeling these types of sales go largely unreported.

[jchcollins]

For people who have done mostly "casual" stuff, the threshold drop from $20K to receive a 1099 to $600 is a rather dramatic one. I'm not saying it's unfair, just saying in reality that is a big change. With the pandemic and more people than ever sitting at home and getting back into selling this that or the other, it was probably time for at least some shift in the laws; they were outdated at best for the state many forms of online commerce find themselves in today.

[BobC]

Originally Posted by jchcollins

For people who have done mostly "casual" stuff, the threshold drop from $20K to receive a 1099 to $600 is a rather dramatic one. I'm not saying it's unfair, just saying in reality that is a big change. With the pandemic and more people than ever sitting at home and getting back into selling this that or the other, it was probably time for at least some shift in the laws; they were outdated at best for the state many forms of online commerce find themselves in today.

Yup!

[jchcollins]

Originally Posted by perezfan

And what about the guy who sells his cards for cash, to a guy working the booth at a trade show? Or even the guy renting the booth, who sells the cards? I have a feeling these types of sales go largely unreported.

Or the LCS owner who offers a wan smile and doesn't charge you sales tax when you fork over a couple Franklins for something that caught your eye on a Saturday afternoon? Cash sales that go unreported and unreported income under certain thresholds will likely always be a thing.

[BobC]

Originally Posted by jchcollins

Or the LCS owner who offers a wan smile and doesn't charge you sales tax when you fork over a couple Franklins for something that caught your eye on a Saturday afternoon? Cash sales that go unreported and unreported income under certain thresholds will likely always be a thing.

Double yup!

[BobC]

Originally Posted by perezfan

I've never paid taxes on stuff I've sold at garage sales (not that it amounted to much money). But then again, I never knew that we were required to... especially since virtually everything gets sold at a "bargain basement" style loss.

And what about the guy who sells his cards for cash, to a guy working the booth at a trade show? Or even the guy renting the booth, who sells the cards? I have a feeling these types of sales go largely unreported.

Exactly correct, and why you shouldn't pay taxes on a garage sale. The government tax authorities realize that over time people may just sell off old things for a few bucks. They don't have the time and resources to go after such people, and realize that virtually everything being sold is old and used, and not selling for what was originally paid for it. Therefore, most garage sale/flea market sales are for a loss, so you would end up owing no income taxes on it anyway. Plus, you aren't normally running a garage sale all the time, maybe just once in a great while. So the tax authorities don't want to deal with all that info and detail, and just leave it alone.

But then we end up getting the internet, and online platforms like Ebay, Etsy, Craig's List, and so on. The initial idea behind these was really more of an online flea market or garage sale concept for people to get rid of their stuff on, by having a wider market. Heck, IIRC Ebay was started as a place for some collectors to sell their Pez dispensers among themselves. But times have changed and these former online garage sales have become big businesses, Amazon, Wayfair, etc. And then throw in an item like old sports cards, that used to be sold/traded for next to nothing for decades, and fast forward to today where they are suddenly going for hundreds and thousands of dollars. The rules and thinking are still changing and morphing. It is kind of like the situation with regard to sales taxes where the internet completely changed the idea of what really constitutes tax nexus and who should be responsible for collecting and remitting sales taxes. It wasn't until the recent 2018 SCOTUS ruling in South Dakota vs. Wayfair that we finally recognized a firm, specifically defined, measure to finally say for certain when someone should or should not be subject to having to collect sales taxes from online sales to other states they are not physically in.

People can still sell at a garage sale or flea market occasionally, and not have to worry about taxes. And they can also do the same thing using Ebay, Etsy or so on. But does doing so and using an online platform automatically change their intent and turn them into a dealer in a legitimate business? See how this can get grey and hazy real fast? There is currently no perfect, set answer that covers every possible situation. People selling for cash at shows and such will, at least for now, not have anyone chasing after them for tax reporting. Again, the tax authorities don't have the time, resources or the inclination normally to chase after them. Using an online platform though gives tax authorities the unique benefit of there now being a specific and precise record and detail of what someone is selling, and what they sold it for. It is changing the tax enforcement landscape and thinking by many state and federal (and local) tax authorities.

[tschock]

Originally Posted by BobC

What about the person that uses Ebay maybe a couple times a year to sell off a collectible they've upgraded, to generate some money for another purchase, or to cash in because they feel the market is right? Are they all dealers just because they used Ebay? See, this is one of the issues with dropping the 1099 reporting sales threshold from $20,000 down to $600. Someone who truly is just a casual seller and not really a dealer may now get targeted as being in an ongoing business because of the low sales reporting threshold amount.

Is someone who has a garage sale every year in a legal business? I don't believe so. So what is the difference if they use Ebay as their garage sale format instead, especially over these past couple of years due to the Covid issues? Using Ebay in and off itself does not a business make, which it sounds like you are kind of alluding to.

And that's likely ties in with, and is not surprising that, ebay sent out emails titled "Tell Congress their new 1099-K rules are confusing and unnecessary" with details like:

"Companies like eBay are required to report sales to the IRS using a tax form called a 1099-K. Until recently, you would only get a 1099-K if you sold over $20,000, or more than 200 items. Starting this year, new legislation has lowered that threshold to just $600, even if that was from a single sale all year. Where it gets complicated is you’ll get this form even if you don’t owe anything, because not all sales are taxable–for example, if you sell something for less than you paid for it. That means millions of sellers will now get unnecessary tax forms, creating confusion and pointless paperwork–both for the IRS, and for small-time sellers who aren’t set up to deal with it.

Imagine selling an old bike for $800 that cost you $1,500 a few years ago. Since you didn’t make a profit, the IRS doesn’t consider that taxable income. But under this new law, you’re still going to get a 1099-K. And now you’ll have to prove to the IRS that you don’t actually owe any taxes on that sale, which makes for complicated accounting work."

Contrary to some opinions here, there are a lot of people selling stuff that are not a business on ebay, nor will likely become one.

[BobC]

Originally Posted by tschock

And that's likely ties in with, and is not surprising that, ebay sent out emails titled "Tell Congress their new 1099-K rules are confusing and unnecessary" with details like:

"Companies like eBay are required to report sales to the IRS using a tax form called a 1099-K. Until recently, you would only get a 1099-K if you sold over $20,000, or more than 200 items. Starting this year, new legislation has lowered that threshold to just $600, even if that was from a single sale all year. Where it gets complicated is you’ll get this form even if you don’t owe anything, because not all sales are taxable–for example, if you sell something for less than you paid for it. That means millions of sellers will now get unnecessary tax forms, creating confusion and pointless paperwork–both for the IRS, and for small-time sellers who aren’t set up to deal with it.

Imagine selling an old bike for $800 that cost you $1,500 a few years ago. Since you didn’t make a profit, the IRS doesn’t consider that taxable income. But under this new law, you’re still going to get a 1099-K. And now you’ll have to prove to the IRS that you don’t actually owe any taxes on that sale, which makes for complicated accounting work."

Contrary to some opinions here, there are a lot of people selling stuff that are not a business on ebay, nor will likely become one.

Exactly, makes the landscape for many on Ebay and other platforms totally confusing.

And don't think this reduced 1099 sales reporting threshold makes the IRS happy at all either. Just like the people who now get these 1099s, it is going to mean a ton more work for the IRS as well, which is already severely underfunded and understaffed. And a lot of that work, at least initially, is going to be dealing with people who really shouldn't be paying any taxes on used things they are selling, but now have to bother reporting. And all this additional paperwork creates more opportunities for mistakes and errors, even by the IRS. Trust me, the IRS, and every other tax authority out there are not infallible and do make mistakes and errors.

Why do you think you often hear those commercials for all those different outfits that will come to your aid if you owe the IRS thousands of dollars, and don't know what to do? They exist for just these kinds of tax issues and situations, to help (and also take advantage of) the taxpayers that didn't know better.