OT: IRS Paypal Tax Situation

[Bocabirdman]

Originally Posted by Batpig

I'm looking at a similar circumstance, however I'm selling for my dad using my paypal/eBay. I'll get the 1099, but will I just report an equal amount paid out as consignment somehow? Do friend and family transactions count toward that limit?

No good deed goes unpunished...

Yes ..F&F transactions count as do refunds credited back to your account.....

[ajjohnsonsoxfan]

This happened to me last year and I had to go back and resubmit returns showing COGS and expenses to offset the gains as Paypal only reports total incoming amount of account. The real shitty part is I use my Paypal account for a lot of other things including collecting entrance fees for fantasy baseball, softball dues and various others non hobby related things that have nothing to do with income earned. I had to open another paypal account under my wife's name/info to split up the transactions to fall below the 200/$20,000 threshold

[Leon]

Originally Posted by Bocabirdman

Yes ..F&F transactions count as do refunds credited back to your account.....

That is not my understanding. Internal Revenue Code (IRC) Section 6050W states that all US payment processors, including PayPal, are required by the Internal Revenue Service (IRS) to provide information to the IRS about certain customers who receive payments for the sale of goods or services through PayPal.

Personal payments that are not payments for the sale of goods or services will not be counted when determining if the IRS thresholds have been reached and will not be included on your Form 1099-K if you exceed the thresholds. However, all payments received for the sale of goods or services will be used to calculate the gross payment volume to be reported. PayPal monitors accounts to ensure that personal payments are not being used for sales of goods and services.

[Bocabirdman]

Originally Posted by Leon

That is not my understanding. Internal Revenue Code (IRC) Section 6050W states that all US payment processors, including PayPal, are required by the Internal Revenue Service (IRS) to provide information to the IRS about certain customers who receive payments for the sale of goods or services through PayPal.

Personal payments that are not payments for the sale of goods or services will not be counted when determining if the IRS thresholds have been reached and will not be included on your Form 1099-K if you exceed the thresholds. However, all payments received for the sale of goods or services will be used to calculate the gross payment volume to be reported. PayPal monitors accounts to ensure that personal payments are not being used for sales of goods and services.

You may be right Leon.....It was a couple years ago...I likely am misremembering.............