new 1099-K rules

[orioles70]

AVOIDING taxes is perfectly legal.
EVADING taxes is illegal.
There is a difference.

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[Gorditadogg]

Originally Posted by orioles70

AVOIDING taxes is perfectly legal.
EVADING taxes is illegal.
There is a difference.

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Thank you Judge Landis.

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[BobC]

Originally Posted by Gorditadogg

Thank you Judge Landis.

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Al, I don't think Landis had anything to do with taxes.

[Gorditadogg]

Originally Posted by BobC

Al, I don't think Landis had anything to do with taxes.

But he had a lot to do with baseball

[cjedmonton]

Related question: I received a payment via Paypal on Dec 27th 2021, but because I have not sold in a couple years, the payment is on hold until Jan 2022.

Should this sale be reported on my 2021 or 2022 return? I had no access to these funds in 2021, and know I will not receive a 2021 1099.

[drmondobueno]

I have tried to talk with my taxman about all this several times the last few months and have not received the courtesy of a return call. Leave it to Net54 to clarify.

Peace out.

[BobC]

Originally Posted by cjedmonton

Related question: I received a payment via Paypal on Dec 27th 2021, but because I have not sold in a couple years, the payment is on hold until Jan 2022.

Should this sale be reported on my 2021 or 2022 return? I had no access to these funds in 2021, and know I will not receive a 2021 1099.

That is actually a great question, but not sure I'll be able to give you a definitive answer without more info.

First, am I correct to assume you, or the business you use the PayPal account for, are a cash basis taxpayer? If not and you report as an accrual basis taxpayer for tax purposes, I'd say you pick up the sale/income on your 2021 return. But if you are a cash basis taxpayer, you are supposed to pick up the sale/income in the year you actually receive the.cash, or it is at least made available for you to do what you want with it.

In your case it sounds like PayPal shows they received your money and credited your account for it in 2021, which initially sounds like you should then pick it up on your 2021 return. But because they're holding it and not letting you have access to it till 2022, it ends up sounding like you a shouldn't pick it up till your 2022 tax return. The problem is we don't know how PayPal internally looks at this, and whether they consider this your money for 1099 reporting purposes when they first receive it, or when they later remove the hold on it. So in this case, here's what I would do.

First off, see if you can get a phone number or email address you can contact PayPal at. Then contact them and simply ask them, for 1099 reporting purposes do they consider money received on your account one year, but put on hold and not actually released to you till the following year, reported on your 1099 in the year they received the money for you, or the year they actually released it to you. And then just report it in 2021 or 2022 based on what they tell you. And if they tell you they report it in the following year, which will be 2022 for you, you should be able to double check that by looking to see that questionable sales amount gets included on your 1099 for 2022, along with any other sales you have during the balance of 2022.

Now if you can't get through to PayPal, or you can, but no one can then answer your question, I'd just include that sale on your 2022 tax return. And again, you should be able to then double check it to see that they included the sale on your 1099 form for 2022 as well. If it ends up that they didn't include that sale on the 2022 form 1099, that means they must have considered that sale as being received by you in your 2021 tax year after all. But since you didn't include it on your 2021 tax return, go ahead and just add the sale on to what they did report on your 2022 form 1099, and include it all on your 2022 tax return. The IRS won't question you for reporting more sales than what is reported on the 1099(s) you get for a particular year. And since you really didn't have the ability to access the money from that sale till 2022, I don't think an IRS agent would fault you for waiting till then to pick it up on your 2022 tax return, even if PayPal didn't put it on your 1099 for 2022.

One more point going back to you, or anyone else, that is an accrual basis taxpayer. Regardless of whether or not you are an accrual or cash basis taxpayer, the people/entities that are preparing and sending these 1099-K forms to you, and the IRS, are doing so based strictly on the cash basis. So if you are on the accrual basis, chances are the sales income you are reporting on your return will not agree to what is being reported to you on the 1099-K form(s) that you receive. As long as the sales you report on the tax return are equal to or greater than sales reported on the 1099-K form(s) you received for that year, you should be fine. But if the accrual basis sales you report on your return turn out to be less than the total sales reported to you on the 1099-K form(s) you received for that year, you may want to make some adjustment, or at least a notation, on your tax return so the IRS doesn't ended up contacting you about some under reported income.

Sorry for the long answer, but if if you want it to be right, and so you know what to do................

[cjedmonton]

Originally Posted by BobC

That is actually a great question, but not sure I'll be able to give you a definitive answer without more info.

First, am I correct to assume you, or the business you use the PayPal account for, are a cash basis taxpayer? If not and you report as an accrual basis taxpayer for tax purposes, I'd say you pick up the sale/income on your 2021 return. But if you are a cash basis taxpayer, you are supposed to pick up the sale/income in the year you actually receive the.cash, or it is at least made available for you to do what you want with it.

In your case it sounds like PayPal shows they received your money and credited your account for it in 2021, which initially sounds like you should then pick it up on your 2021 return. But because they're holding it and not letting you have access to it till 2022, it ends up sounding like you a shouldn't pick it up till your 2022 tax return. The problem is we don't know how PayPal internally looks at this, and whether they consider this your money for 1099 reporting purposes when they first receive it, or when they later remove the hold on it. So in this case, here's what I would do.

First off, see if you can get a phone number or email address you can contact PayPal at. Then contact them and simply ask them, for 1099 reporting purposes do they consider money received on your account one year, but put on hold and not actually released to you till the following year, reported on your 1099 in the year they received the money for you, or the year they actually released it to you. And then just report it in 2021 or 2022 based on what they tell you. And if they tell you they report it in the following year, which will be 2022 for you, you should be able to double check that by looking to see that questionable sales amount gets included on your 1099 for 2022, along with any other sales you have during the balance of 2022.

Now if you can't get through to PayPal, or you can, but no one can then answer your question, I'd just include that sale on your 2022 tax return. And again, you should be able to then double check it to see that they included the sale on your 1099 form for 2022 as well. If it ends up that they didn't include that sale on the 2022 form 1099, that means they must have considered that sale as being received by you in your 2021 tax year after all. But since you didn't include it on your 2021 tax return, go ahead and just add the sale on to what they did report on your 2022 form 1099, and include it all on your 2022 tax return. The IRS won't question you for reporting more sales than what is reported on the 1099(s) you get for a particular year. And since you really didn't have the ability to access the money from that sale till 2022, I don't think an IRS agent would fault you for waiting till then to pick it up on your 2022 tax return, even if PayPal didn't put it on your 1099 for 2022.

One more point going back to you, or anyone else, that is an accrual basis taxpayer. Regardless of whether or not you are an accrual or cash basis taxpayer, the people/entities that are preparing and sending these 1099-K forms to you, and the IRS, are doing so based strictly on the cash basis. So if you are on the accrual basis, chances are the sales income you are reporting on your return will not agree to what is being reported to you on the 1099-K form(s) that you receive. As long as the sales you report on the tax return are equal to or greater than sales reported on the 1099-K form(s) you received for that year, you should be fine. But if the accrual basis sales you report on your return turn out to be less than the total sales reported to you on the 1099-K form(s) you received for that year, you may want to make some adjustment, or at least a notation, on your tax return so the IRS doesn't ended up contacting you about some under reported income.

Sorry for the long answer, but if if you want it to be right, and so you know what to do................

I greatly appreciate the detailed response!

Finally got a response from Paypal on this. They said it is reportable on the 2021 term since that is when the buyer sent the funds, even if they are not yet available to me.

The parcel is still en route, thus the hold until it is delivered. However, the buyer completed the transaction on their end in 2021, so that’s how they said it will be viewed.

Watch me claim it for 2021 and then get a 1099 for the 2022 tax year anyway (assuming no other sales for the year). That’s a mess I don’t want.

[BobC]

Originally Posted by Gorditadogg

But he had a lot to do with baseball

Yes he did! LOL

[Rich Falvo]

Originally Posted by orioles70

AVOIDING taxes is perfectly legal.
EVADING taxes is illegal.
There is a difference.

Sent from my SM-N950U using Tapatalk

One of the lessons I remember most from my graduate accounting classes.

[BobC]

Originally Posted by orioles70

AVOIDING taxes is perfectly legal.
EVADING taxes is illegal.
There is a difference.

Sent from my SM-N950U using Tapatalk

Exactamundo!

What I've always told my clients:


Tax evasion is a crime,
but tax avoidance is your Constitutional and God given right!!!

[pawpawdiv9]

Question!!!!!
Alert- i saw this on the other platform(PSA) saying its not 600 dollars, but now 10K. according to a link someone there posted. I have not gathered the details on this yet.
Or maybe its about the inflow to your bank account. I'm at a lost in this stuff. Maybe its a different/separate thing.
Thread:https://forums.collectors.com/discus...es-down#latest
Link: https://abcnews.go.com/Politics/bide...ry?id=80665505

[sb1]

That is the banking inflows and outflows on an annual basis and neither have been adopted at this point as the bill has never gone thru. It was not in the past few versions but could be reinserted into the bill again, if and when they try to pass it.

[h2oya311]

Bob - thanks for all of your insight. Very, very informative post and I really appreciate how well you've laid things out.

[BobC]

Originally Posted by h2oya311

Bob - thanks for all of your insight. Very, very informative post and I really appreciate how well you've laid things out.

Thanks, I hope myself, and Bill/birdman42, are able to help someone out. If nothing else, it is info everyone can use to make better decisions for themselves, or at least know what they may now have to start keeping track of to give to their tax preparers.

Hopefully that way no one will have their tax preparers yelling at them when they walk in and drop their tax info off on April 14th. LOL

[ngrow9]

This has been a very helpful discussion, thanks to everyone! One quick question: what type of records must one keep to document purchase prices, etc.? If I maintain a document showing what I paid for the card and what it sold for, is that sufficient? Or do I literally need to print and keep the receipt for every card I ever purchase off eBay, if I want to be completely thorough?

[BobC]

Originally Posted by sb1

That is the banking inflows and outflows on an annual basis and neither have been adopted at this point as the bill has never gone thru. It was not in the past few versions but could be reinserted into the bill again, if and when they try to pass it.

Exactly right. And just shows how the government is trying to clamp down even more on cash and currently other non-reported transaction activity. In case you haven't heard, they are still trying to figure out how to pay for the BBB program, and it has been talked about significantly increasing the IRS' budget so that among everything else they need to do, they can hire more auditors to go after the insane amount of taxes they estimate aren't currently being paid, but that should be.

Goes along with everything else the government seems to be doing to discourage the use of cash anymore, like the asset forfeiture rules. I remember back to when Rosen (Mr. Mint) used to have those adds showing a suitcase full of money he had to pay for your cards you were looking to sell. I could just see the cops today waiting for him outside a major show, or the National, with a drug sniffing dog that detects the smell of marijuana coming from his suitcase, so they could just ytake it. I've read somewhere that virtually all currency that has been in circulation for even just a short period of time has likely come into contact with someone using marijuana, or even worse drugs, and that once that happens, the scent stays on the currency so the drug sniffing dogs can still detect it.

Don't respond on this public forum here if you still do, but I've often wondered if things like these asset forfeiture incidences and proposed changes to cash activity in our bank accounts being reported to the government has got some people thinking twice, or even three times, about taking out large sums of cash to take to shows to buy/sell cards anymore, or depositing large sums of cash into their account from something they sold. The opportunities have been way down because of the pandemic, but as time goes by and things hopefully keep opening further up, I can see that maybe being a concern for some, if not many, people going forward.