new 1099-K rules

[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?

[investinrookies]

Originally Posted by 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?

I have wondered this as well. I keep a nice excel document of every purchase noting cost basis, sale price and net proceeds after fees. Also has the purchase and sale dates. Is that sufficient or I do i need receipts of prices paid to prove cost basis?


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[Rich Klein]

"It appears non-commercial transactions will be included; there's no mention of a distinction in the IRS instructions for completing the form. In one way this is going to be a shock to some people. We have a church client that receives most of its monthly contributions through Zelle. On the other hand, if there were a distinction we might see parties such as PP clamping down on the use of F&F. I see the PP page mentioned above, but there's no mention of F&F transactions being exempt. And again, the IRS instructions for the form don't appear to allow for an exemption for non-commercial transactions. I'd really, really like to be wrong about this, but I believe I'm correct."

Just a note, and I don't know if this is true for Zelle, but when I set up pay pal for our synagogue's card show, I set it up with Pay Pal as a non-profit and sent in the 501C form we received when we 1st began. So if the church did not set it up as a non-profit, they need to fix that ASAP.

I also give out donation sheets to our vendors (in the past since our last show thanks to COVID was March 2020) and anyone who donates us cards or prizes who wishes to receive those notes. I have had a couple of major donators need the 501-C form as well for their tax preparers and that has been sufficient for their needs. So I would presume if the prep work by the church was done correctly then there should be no real effect on them

Rich


Bill[/QUOTE]

[BobC]

Originally Posted by 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?

You could keep a log, especially when you purchase something like at a show where probably won't get a receipt. But for purchases from say Ebay or AHs I would definitely print out and keep invoices and receipts. If nothing else, it would show an IRS agent you have independent documentation for at least part of your activities, and make it easier for them to maybe then accept you records to the activities you couldn't get receipts for.

[parkplace33]

No tax law change, you will just be getting another piece of paper now.

If folks are concerned with tax implications, recommend you talk to a financial advisor that can help you.

[BobC]

Originally Posted by parkplace33

No tax law change, you will just be getting another piece of paper now.

If folks are concerned with tax implications, recommend you talk to a financial advisor that can help you.

No, not a financial advisor, you want a tax professional. One of my clients for years was a financial advisor AND a CPA to boot, and he knew better than to even try doing his own taxes.

You want to talk to/with someone that has been doing taxes for a while, and not just someone that has a title or degree that sounds like they might know what they are doing. And I don't heartily recommend the walk-in places that are always advertising on radio and TV, and have offices everywhere. There's a reason those people work there and not in a regular tax/accounting/CPA office. They're not all bad, but you never know who you'll get when you just walk in there, and they aren't all that cheap either. They usually charge you on what I call an ala carte basis. They basically charge you for every separate form they fill out, and every piece of paper and tax document they touch.

If you're looking around and start talking to somebody, and they sound a lot like me, you're probably headed in the right direction. LOL

[ngrow9]

Originally Posted by BobC

You could keep a log, especially when you purchase something like at a show where probably won't get a receipt. But for purchases from say Ebay or AHs I would definitely print out and keep invoices and receipts. If nothing else, it would show an IRS agent you have independent documentation for at least part of your activities, and make it easier for them to maybe then accept you records to the activities you couldn't get receipts for.

Thanks Bob. Easiest thing moving forward is probably just to download all of my purchase history from eBay each year. Appreciate the help!

[BobC]

Originally Posted by ngrow9

Thanks Bob. Easiest thing moving forward is probably just to download all of my purchase history from eBay each year. Appreciate the help!

Yup! I always used to use Gavelsnipe myself for all my Ebay activity, until Ebay basically locked Gavelsnipe out a couple years ago. When I heard the Gavelsnipe site was going to be permanently shut down effective 6/1/2021, I started a thread on here back in April, 2021 warning people about the pending move so that if they had sales data they wanted to save from the site, that they better go on and save or grab it somehow before the shutdown. I personally had set up over 18,000 snipes on Ebay through Gavelsnipe, that resulted in approximately 3,000 auctions I had won on Ebay over the years. (I was stunned when I saw how the numbers had added up over the years) Was very glad I printed off and saved all the successful Ebay auction sales data from Gavelsnipe. I never usually did BINs on Ebay, so the Gavelsnipe data should cover almost all my Ebay activity through today. After they shut down Gavelsnipe, I really haven't been on Ebay much at all. Printed off a looooootttttttt of pages of sales data though. LOL

And I'm pretty sure the Gavelsnipe site is down, so you can't access records through them anymore. Good luck with your recordkeeping.

[jchcollins]

These changes - and yes they've been coming for some time... for me are the kick in the butt I needed to finally just stop selling. For too long, many card purchase propositions for me have been sell X to get Y...and in the end this results in wishing that I had not sold stuff. So my pace going forward may be slower, but... no more.

[tha-rock]

I heard about this today from a member and reading this post has not only been informative, but confusing and frustrating. It is going to be a nightmare to do this. Is IRS really so desperate for funding that they need to create a system that will sweep up millions and millions of ordinary folks who manage to sell $600 or more in a year in an online marketplace? Can the $600 threshold be raised to a more reasonable amount? What would it take to do that?

I am refining and downsizing my collection. Most of the items I'm selling were acquired at a cost, although I have no written sales records of what I paid for 99+% of those items. I understand paying taxes on sales at the capital gains rate, but how do I establish a price paid for something I sell so that I don't have to pay taxes on the gross amount? Will the IRS just take my word for what I paid? I imagine many of you are in the same boat. How are you going to handle it?

Not long ago I sold a Jim Rice signed baseball for $25, which is what I paid for it, when I bought a few from Sure Shot Promotions. After ebay fees, I lost money on this baseball, but under the new law ebay would show this as a $30 income ($25 + $5 postage), when in reality it was a net loss to me. Having to pay tax on a net loss is salt in the wound. Many of you probably have clear memories of what you paid for certain things but would be at a loss if IRS asked you to prove it. Some of the things I am selling, I purchased 20- 40 years ago. No sales receipts and memory would not be reliable. Some items were acquired in trades. How do we deal with these issues?

If I bought a card in 1990 for $500 and sold it in 2022 for $1000, and have no documentation of my buy price, how can I avoid paying tax on the entire $1000? This has been fun as a 'hobby' and if I made money selling an item, it has been my means of funding other purchases for my collection.

It seems that this may push many hobbyists into creating "businesses" and all of the headaches that will bring just to avoid overpaying taxes. I don't want to look at my hobby as a business. Am I wrong? Am I making any sense?

[BobC]

Originally Posted by tha-rock

I heard about this today from a member and reading this post has not only been informative, but confusing and frustrating. It is going to be a nightmare to do this. Is IRS really so desperate for funding that they need to create a system that will sweep up millions and millions of ordinary folks who manage to sell $600 or more in a year in an online marketplace? Can the $600 threshold be raised to a more reasonable amount? What would it take to do that?

I am refining and downsizing my collection. Most of the items I'm selling were acquired at a cost, although I have no written sales records of what I paid for 99+% of those items. I understand paying taxes on sales at the capital gains rate, but how do I establish a price paid for something I sell so that I don't have to pay taxes on the gross amount? Will the IRS just take my word for what I paid? I imagine many of you are in the same boat. How are you going to handle it?

Not long ago I sold a Jim Rice signed baseball for $25, which is what I paid for it, when I bought a few from Sure Shot Promotions. After ebay fees, I lost money on this baseball, but under the new law ebay would show this as a $30 income ($25 + $5 postage), when in reality it was a net loss to me. Having to pay tax on a net loss is salt in the wound. Many of you probably have clear memories of what you paid for certain things but would be at a loss if IRS asked you to prove it. Some of the things I am selling, I purchased 20- 40 years ago. No sales receipts and memory would not be reliable. Some items were acquired in trades. How do we deal with these issues?

If I bought a card in 1990 for $500 and sold it in 2022 for $1000, and have no documentation of my buy price, how can I avoid paying tax on the entire $1000? This has been fun as a 'hobby' and if I made money selling an item, it has been my means of funding other purchases for my collection.

It seems that this may push many hobbyists into creating "businesses" and all of the headaches that will bring just to avoid overpaying taxes. I don't want to look at my hobby as a business. Am I wrong? Am I making any sense?

You make a lot of sense and I can understand your confusion, but don't think you're alone. If you're thinking you have to form a business now, you don't. If you look at and read my posts, in this thread and back in others from prior months/years, I've talked and written about the various ways people in this hobby can end up reporting their sales activity, and at least some of the pros and cons of each way to possibly report what they're doing. As I've been saying for quite a while now, people buying and then selling sports cards, like many of us do, will basically fall into and end up reporting their card sales activity as either a dealer/seller/flipper that is actually in business and treating what they do as such, or as an investor, and also finally as a true collector/hobbyist. And I've also said you can probably be reporting as any of these three different sales types (dealer/investor/collector) all at the same time, depending on your unique set of circumstances.

I'm merely passing along information so fellow collectors will at least have and know the basics of what they should be doing, so they are better informed and able to best decide how to handle and report things for their own unique situations and circumstances. And I'm a big proponent of advising people to seek out good, qualified professional help with tax reporting and preparation when they need it. If you start going back and reading through my posts, you'll soon see I keep saying the same things over and over again, and I'm really getting tired of all this typing. LOL

Anywy, to specifically answer your question about costs and records, even if you don't have an actual receipt or other specific documentation to support every single thing you've ever bought, I would not go and just report the cost of such an item as $0 then if I sold it. Instead, I would give it my best effort to recreate what the cost was, and failing that, would give it my best educated guesstimate as to what I paid for something, and use that to report on a return. You could even create or maintain some type of log, notes, spreadsheets, or other written records to keep track of such undocumented acquisitions, like cash purchases you had from a show you attended years ago. It may not be perfect, but you do the best you can to be reasonable and as accurate as possible. Hope this hopes. Good luck.

[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.