Cost basis - Warning tax related topic

[raulus]

Originally Posted by Smarti5051

I think the difference is that politics has become very weaponized. Everybody has a side, and nobody is really budging from their side. So, any discussion of politics devolves into an impossible “tastes great” vs “less filling” screamfest. The TPG debates involve a hobby specific topic that does not generally rest on a poster’s political preference.

So, rather than searching for “fault” regarding taxes, it is far more productive to discuss what the current laws are snd how to navigate them (at least on a vintage card message board).

These could be part of the "unwritten rules" of the forum, unless of course they're written somewhere, and I just haven't read them.

It does seem like discussing policy is fine. But once you start mentioning specific politicians and/or political parties by name, even if only in passing and/or in relatively benign fashion, then you're in the danger zone.

And maybe in some ways, as we see politics permeating every other sphere of life, where just about absolutely everything is political nowadays (sadly, including sports), this policy could be an attempt to avoid allowing politics to similarly taint our discourse on this site.

[timzcardz]

Originally Posted by raulus

These could be part of the "unwritten rules" of the forum, unless of course they're written somewhere, and I just haven't read them.

Discussion of politics is not an unwritten rule.

It is explicitly prohibited: https://www.net54baseball.com/faq.ph...testfaq#faq_12
(Things you may not post, 5th line)

[raulus]

Originally Posted by timzcardz

Discussion of politics is not an unwritten rule.

It is explicitly prohibited: https://www.net54baseball.com/faq.ph...testfaq#faq_12
(Things you may not post, 5th line)

There you go. Politics and religion, among other things.

I’ve probably violated most of the rules without realizing they were even rules.

[Stupe the Second Sacker]

Originally Posted by timzcardz

Discussion of politics is not an unwritten rule.

It is explicitly prohibited: https://www.net54baseball.com/faq.ph...testfaq#faq_12
(Things you may not post, 5th line)

This thread is about the impact to collectors and not the idiotic decision that caused the impact...just so we're clear. It's a bigger drag on the hobby than anything PSA has ever done, but talked about 1% as much.

[BobC]

Originally Posted by Stupe the Second Sacker

This thread is about the impact to collectors and not the idiotic decision that caused the impact...just so we're clear. It's a bigger drag on the hobby than anything PSA has ever done, but talked about 1% as much.

Bob,

This has been talked about here on this forum before, and how the change in the lowered reporting threshold for 1099-K sales reporting on platforms such as Ebay using TPSOs (Third-Party Payment Service Organizations) will impact literally millions of people who sell on Ebay and other online platforms, and not just those in our sports card hobby. Most here on the forum tend to try and stick with just the card/memorabilia collecting hobby itself as the main focus when posting. Also, many dislike when a hobby related tax question is posed and I respond with what they call a War and Peace novel, in trying to properly and fully explain what the new or changed tax law means, and what and how they may be affected, and probably most importantly, what they need to know and do about it in regards to their collecting activities.

As a matter of course, I pretty much know which politician/political party is behind all of these new or changed tax laws, and the reasons and/or intent behind them, as I believe most others here on the forum do as well. So what real need is there to talk about who did what? I would be more/most concerned with what to do about it. And thus, I, and most others, try to limit our discussions to the effects and impact of these new and changed tax laws, and let someone else worry about who put them in place. There are other forums and chat rooms that I'm sure are more politically oriented, and would be perfect to visit to go into discussing the people and political reasoning behind such new laws and changes. The main focus on this forum is to discuss topics and issues that share information and hopefully help other collectors to navigate the hobby. I fail to see how talking about which political person/party may or may not have been behind the new or changed tax law that affects sports card/memorabilia collectors is in any way going to be helpful to them in regards to the hobby, whereas, explaining the impact and effect of these new or changed tax laws, and what they need to be aware of and what they may need to do in response to them, would be a bit more useful, wouldn't you agree?

In the future, simply do not mention a specific person, politician or political party. Keep it generic and no one will give you grief. Had you just said the government ruined the hobby by passing the new tax reporting threshold change, no one would have said a word. Meanwhile, pretty much everyone already knows which politicians, and their parties, were behind this changed reporting requirements passage.

And just so you know, this didn't actually change any tax law itself, just at what point these TPSOs had to start reporting sales to the IRS. I'd already stated this in an earlier post to this thread. The tax laws always called for people to be reporting their profits from sales of things like sports cards/collectibles all along on their tax returns. It was just that since no independent third parties were required to report all such sales to the IRS, that many of those people who going forward are now going to start getting these 1099-K forms (pretty much all of them really, in all likelihood) simply didn't report their sales profits on their tax returns, and are therefore literally guilty of tax evasion. But what I really don't understand, and hope you can explain to me then, is how by enforcing the tax laws already in place, and maybe stopping some people from continuing to cheat on their taxes, is that then guilty of ruining or damaging our hobby? Does it cause many people, and not just people in our hobby, to now have to do extra work in regard to their income taxes, yes, and I am the first to admit it will be a PITA for many. Why else do you think even the IRS went ahead just before this past Christmas and deferred this new reporting requirement for another year? Otherwise, everyone would have been in the middle of all this new tax reporting crap right now. And this isn't anything suddenly new. This change was signed into law back in March of 2021 if I remember correctly, and I believe I may have been the one to first mention and post about it on this forum over that same Summer. And now with this additional year of deferral for the new reporting rules taking effect, one would think that everyone potentially effected would have now had more than enough time to get ready for these changes. And also, since this was supposed to have been in effect since the start of 2022, but the deferral not known of till the latter part of December, 2022, wouldn't one think that if this new tax reporting change was going to damage and harm the hobby it would have already started and been very noticeable and done so last year? But unless I'm mistaken, I didn't see the hobby tanking or being hurt much last year at all, did you?

And as to your comments about how people keep going on and on about PSA ruining the hobby, they are referring to the direct effect that may be falling onto collectors from possibly buying incorrectly graded cards, or more specifically, ones that are actually fakes, doctored and/or altered. Collectors typically do not like buying and owning items that are not what they should be, especially when they or others have paid someone like PSA to ensure that their cards and items are real and as advertised. That kind of treatment can have a direct effect on how collectors perceive and trust/rely upon TPGs for cards they buy, and can thus turn people away from the hobby and possibly have them quit collecting entirely in some cases because of that distrust they now have. Now that could most definitely damage and harm the hobby. Meanwhile, the tax reporting requirement changes don't really affect any collectors buying cards at all, only if they resell them. So, if dealers/sellers are really the only ones directly affected by these new sales reporting rules, does that mean that collectors are going to stop wanting to buy cards and memorabilia? Hell no! And even if the dealers/sellers now have to put up with these new tax reporting changes, do you really think they'll stop selling if they still want to make money and get cash out of their inventories somehow? Again, hell no! PSA's issues and supposed faults would most definitely affect the demand side of the equation. The tax reporting issues primarily affects the supply side. And in all my years in dealing with businesses and the economy, I think that in the case of our hobby, the most harm and damage to it would come from disruption to the demand side. As long as there is demand, and someone is willing to pay for something, someone else will almost always find a way to meet that demand, and make a buck or two in the process, taxes or not. The inventory is out there, and if some dealers/sellers don't want to deal with the IRS, you know that that inventory will somehow eventually end up in the hands of others that will be willing to supply it to those that want it. And that is why, IMO, your statements about how both the alleged PSA issues and these new tax reporting changes are both somewhat equally damaging and harmful to the hobby, and thus should be more equally talked about and debated but aren't, don't really seem to be totally true and the same after all, at least not to me.

And most true collectors don't really collect cards to just turn around and resell them, they collect them to keep them. And yes, yes, I know that some collectors will use cards and items they pick up to occasionally sell to help finance additional card purchases. But ask yourself this question, if such collectors now realize that using certain online platforms and payment services will cause their sales to be reported to the IRS (and thus requiring them to be reported on their tax returns like they probably should have been all along anyway), they can simply look for different venues/ways to keep doing their side sales, but utilize ones that will not require such third-party sales reporting to the IRS. Like using Net54's B/S/T forum, trading in Facebook groups, doing private sales, going to shows, etc. That way they can continue potentially cheating on their taxes, but still get the money they want for collecting purposes. I never advise anyone to cheat on their taxes, but know that pretty much everyone does or has at some point in their life probably not properly reported and paid quite everything they should have for their income and sales/use taxes. LOL

I find it particularly interesting, and also quite comical, when I hear or see someone complaining about something like the government always looking to raise or add new taxes, but then when the government finally decides and gets around to doing something about it and instead goes after the tax cheats that aren't already paying the taxes that they should be, and finally enforcing the tax laws like they should have been doing all along so they don't have to raise or create new taxes, those same people start whining even more when it turns out they are some of the ones that have been cheating the rest of us all along by not properly paying the taxes they should have been to begin with. And I am not pointing a finger at you, or anyone else in particular, on this forum. Just saying.

[Eric72]

10/10. Would read again.

Originally Posted by BobC

Bob,

This has been talked about here on this forum before, and how the change in the lowered reporting threshold for 1099-K sales reporting on platforms such as Ebay using TPSOs (Third-Party Payment Service Organizations) will impact literally millions of people who sell on Ebay and other online platforms, and not just those in our sports card hobby. Most here on the forum tend to try and stick with just the card/memorabilia collecting hobby itself as the main focus when posting. Also, many dislike when a hobby related tax question is posed and I respond with what they call a War and Peace novel, in trying to properly and fully explain what the new or changed tax law means, and what and how they may be affected, and probably most importantly, what they need to know and do about it in regards to their collecting activities.

As a matter of course, I pretty much know which politician/political party is behind all of these new or changed tax laws, and the reasons and/or intent behind them, as I believe most others here on the forum do as well. So what real need is there to talk about who did what? I would be more/most concerned with what to do about it. And thus, I, and most others, try to limit our discussions to the effects and impact of these new and changed tax laws, and let someone else worry about who put them in place. There are other forums and chat rooms that I'm sure are more politically oriented, and would be perfect to visit to go into discussing the people and political reasoning behind such new laws and changes. The main focus on this forum is to discuss topics and issues that share information and hopefully help other collectors to navigate the hobby. I fail to see how talking about which political person/party may or may not have been behind the new or changed tax law that affects sports card/memorabilia collectors is in any way going to be helpful to them in regards to the hobby, whereas, explaining the impact and effect of these new or changed tax laws, and what they need to be aware of and what they may need to do in response to them, would be a bit more useful, wouldn't you agree?

In the future, simply do not mention a specific person, politician or political party. Keep it generic and no one will give you grief. Had you just said the government ruined the hobby by passing the new tax reporting threshold change, no one would have said a word. Meanwhile, pretty much everyone already knows which politicians, and their parties, were behind this changed reporting requirements passage.

And just so you know, this didn't actually change any tax law itself, just at what point these TPSOs had to start reporting sales to the IRS. I'd already stated this in an earlier post to this thread. The tax laws always called for people to be reporting their profits from sales of things like sports cards/collectibles all along on their tax returns. It was just that since no independent third parties were required to report all such sales to the IRS, that many of those people who going forward are now going to start getting these 1099-K forms (pretty much all of them really, in all likelihood) simply didn't report their sales profits on their tax returns, and are therefore literally guilty of tax evasion. But what I really don't understand, and hope you can explain to me then, is how by enforcing the tax laws already in place, and maybe stopping some people from continuing to cheat on their taxes, is that then guilty of ruining or damaging our hobby? Does it cause many people, and not just people in our hobby, to now have to do extra work in regard to their income taxes, yes, and I am the first to admit it will be a PITA for many. Why else do you think even the IRS went ahead just before this past Christmas and deferred this new reporting requirement for another year? Otherwise, everyone would have been in the middle of all this new tax reporting crap right now. And this isn't anything suddenly new. This change was signed into law back in March of 2021 if I remember correctly, and I believe I may have been the one to first mention and post about it on this forum over that same Summer. And now with this additional year of deferral for the new reporting rules taking effect, one would think that everyone potentially effected would have now had more than enough time to get ready for these changes. And also, since this was supposed to have been in effect since the start of 2022, but the deferral not known of till the latter part of December, 2022, wouldn't one think that if this new tax reporting change was going to damage and harm the hobby it would have already started and been very noticeable and done so last year? But unless I'm mistaken, I didn't see the hobby tanking or being hurt much last year at all, did you?

And as to your comments about how people keep going on and on about PSA ruining the hobby, they are referring to the direct effect that may be falling onto collectors from possibly buying incorrectly graded cards, or more specifically, ones that are actually fakes, doctored and/or altered. Collectors typically do not like buying and owning items that are not what they should be, especially when they or others have paid someone like PSA to ensure that their cards and items are real and as advertised. That kind of treatment can have a direct effect on how collectors perceive and trust/rely upon TPGs for cards they buy, and can thus turn people away from the hobby and possibly have them quit collecting entirely in some cases because of that distrust they now have. Now that could most definitely damage and harm the hobby. Meanwhile, the tax reporting requirement changes don't really affect any collectors buying cards at all, only if they resell them. So, if dealers/sellers are really the only ones directly affected by these new sales reporting rules, does that mean that collectors are going to stop wanting to buy cards and memorabilia? Hell no! And even if the dealers/sellers now have to put up with these new tax reporting changes, do you really think they'll stop selling if they still want to make money and get cash out of their inventories somehow? Again, hell no! PSA's issues and supposed faults would most definitely affect the demand side of the equation. The tax reporting issues primarily affects the supply side. And in all my years in dealing with businesses and the economy, I think that in the case of our hobby, the most harm and damage to it would come from disruption to the demand side. As long as there is demand, and someone is willing to pay for something, someone else will almost always find a way to meet that demand, and make a buck or two in the process, taxes or not. The inventory is out there, and if some dealers/sellers don't want to deal with the IRS, you know that that inventory will somehow eventually end up in the hands of others that will be willing to supply it to those that want it. And that is why, IMO, your statements about how both the alleged PSA issues and these new tax reporting changes are both somewhat equally damaging and harmful to the hobby, and thus should be more equally talked about and debated but aren't, don't really seem to be totally true and the same after all, at least not to me.

And most true collectors don't really collect cards to just turn around and resell them, they collect them to keep them. And yes, yes, I know that some collectors will use cards and items they pick up to occasionally sell to help finance additional card purchases. But ask yourself this question, if such collectors now realize that using certain online platforms and payment services will cause their sales to be reported to the IRS (and thus requiring them to be reported on their tax returns like they probably should have been all along anyway), they can simply look for different venues/ways to keep doing their side sales, but utilize ones that will not require such third-party sales reporting to the IRS. Like using Net54's B/S/T forum, trading in Facebook groups, doing private sales, going to shows, etc. That way they can continue potentially cheating on their taxes, but still get the money they want for collecting purposes. I never advise anyone to cheat on their taxes, but know that pretty much everyone does or has at some point in their life probably not properly reported and paid quite everything they should have for their income and sales/use taxes. LOL

I find it particularly interesting, and also quite comical, when I hear or see someone complaining about something like the government always looking to raise or add new taxes, but then when the government finally decides and gets around to doing something about it and instead goes after the tax cheats that aren't already paying the taxes that they should be, and finally enforcing the tax laws like they should have been doing all along so they don't have to raise or create new taxes, those same people start whining even more when it turns out they are some of the ones that have been cheating the rest of us all along by not properly paying the taxes they should have been to begin with. And I am not pointing a finger at you, or anyone else in particular, on this forum. Just saying.

[yanks4]

BobC....Thank you very much for taking the time to post that most articulate post. I am sure it is a huge help to anyone who reads it ....Thank you!

[Stupe the Second Sacker]

Originally Posted by BobC

But what I really don't understand, and hope you can explain to me then, is how by enforcing the tax laws already in place, and maybe stopping some people from continuing to cheat on their taxes, is that then guilty of ruining or damaging our hobby?

Bob...Love your opinions and large bombastic posts, even the finger wagging ones. You might find it interesting, of the three other accountants I've spoken with over the past year, you are the only one who speaks of the change in such glowing terms. The consensus among those I spoke with is that it's ridiculous to set such a low limit and will be an inconsistently interpreted, unmanageable drag on everyone involved, not just the American citizens.

However to your question. How does it ruin the hobby? Let me list the ways. (Let's see if I can "out-wall of words" you.)

It's not a hobby any more. We're all bookkeepers at least and business men at worst. Even if you have no intention of selling this year, you have to keep records and receipts (good luck with that) to be prepared to sell someday. And it's not just card/memorabilia purchase receipts. It's all receipts for all things that can help reduce your tax liability down the road. Did you buy penny sleeves? Save the receipt. Did you drive to the post office, record the date and mileage. Did you go to a show? Save the admission ticket. Hey, should I record the mileage for that too? Did you hand a dealer a wad of cash? Take a selfie of the two of you engaged in the exchange (but remember to blur his face). Has anyone other than business men done this over the last 50 years of baseball card collecting?

I can hear the "I've never sold and I never will!" retorts already. I'd be curious to know the percentage of collectors out there who never sell but instead take their collections to their grave. I'd bet it's a very small percentage. (Today we salute you, Mr. Til Death Card Collector Guy...For you it is still a hobby.)

This new rule is as much about proving you didn't make money as it is taxing those who did. I've completely sold down to zero three times in my life. The first time in high school to buy my older girlfriend a worthy birthday present (that was a mistake), once upon college graduation to finance a month long cross country road trip (not even close to a mistake...the Vegas and Tijuana legs of the trip alone were worth it) and once upon divorce (worth it). Did I make money any time. No. Could I prove it? Also no.

I bring this up because life happens. You might not be planning to sell today, but you don't know what tomorrow brings. Maybe someoday, you'll be making this fun decision...Playing it safe and overpaying the federal government, when you likely need the money the most or recreating years if not decades of records and hoping they pass muster if questioned. Sound fun? Hobbies are fun, right?

(Spare the, "you would've faced this under the old rule too" comebacks. Not once in my 3 experiences, did I approach 20K in sales. I'm guessing more collectors fall in in the $600-$20K value range than the 20K+ range.)

And a note on the tax cheats in our "hobby". It's funny Bob that you point the finger at collectors when you mention this (don't shoot the messenger., it was your example) and not the "cash only" and "cash discount" dealers out there. Isn't that really where you should be directing your sarcasm and ire? Why are the collectors the bad guys here?

Can this change be interpreted any other way than an effort to stick it to the little guy? The big fish were already being reported (well their non-cash transactions anyway). The people who can't afford to consistently pay $5 for gas and $6 for eggs, who find a way to help subsidize their cost of living expenses (expenses that were much more manageable just a couple years ago) are really going to swing the pendulum in Ukraine's favor? At a time when all Americans are being squeezed, rolling out a plan to squeeze them harder seems a little tone deaf, if not evil...especially when we see the unpopular ways the government spends our money.

I wonder how many collectors here were ever charged with "tax evasion" for not reporting their under 20K ebay sales? I'll bet none. If nobody is being penalized for it, is it really cheating? Or is it the accepted norm? Or even...gasp. A hobby! It's a much talked about phenomenon, like PSA FBI raids and lawsuits but like those topics, doesn't really amount to anything in the end. It's just an over used, empty excuse to justify the squeezing of American wallets.

A few other bonus features of the rule...You get a more complicated and expensive tax return! It's not just added bookkeeping and records retention...It's literally more money out of your pocket. How fun is that?

Think you can outsmart the system and call yourself a business and deduct expenses on Schedule C? Well, how does self employment tax sound? Sound fun?

Who doesn't love math? Let's say I bought a card five years ago for $500 and today, being a little more well off, buy a much nicer version of that same card for $2000. Not needing two of the same card, I sell the first for $1000. Did I make $500? Feels to me like I'm out $1000. What say you Bob? How would this get reported? Is that income? Who doesn't love having to explain that?

And what about eBay? For me, it was a huge source of my collecting over the past 20 years. However, over the last couple it's become a picked over carcass as seller after seller has gone underground and/or listed less. Has nobody else felt this difference? How is that good for the hobby?

I'm sure there's more, but for now that's enough.

[Exhibitman]

Originally Posted by BobC

I find it particularly interesting, and also quite comical, when I hear or see someone complaining about something like the government always looking to raise or add new taxes, but then when the government finally decides and gets around to doing something about it and instead goes after the tax cheats that aren't already paying the taxes that they should be, and finally enforcing the tax laws like they should have been doing all along so they don't have to raise or create new taxes, those same people start whining even more when it turns out they are some of the ones that have been cheating the rest of us all along by not properly paying the taxes they should have been to begin with. And I am not pointing a finger at you, or anyone else in particular, on this forum. Just saying.

This. The law ain't new; the enforcement effort is.

According to the Bureau of Labor Statistics, the underground economy in the United States is estimated to be equal to about 8.8% of GDP. Since GDP is about $20-23 trillion each year, the underground component is nearly two trillion dollars. Just taxing that under long-standing law would cover a gigantic piece of the government's activities. The people 'hurt' by having to pay the taxes they actually owe, boo-friggedy-hoo. Screw them. The tax frauds are just picking the pockets of everyone else.

As for politics, there is a Watercooler section where anyone so inclined can howl at the moon over whatever political nonsense he or she wants without annoying the rest of us who are here to discuss cards. Know it, learn it, live it.

[Stupe the Second Sacker]

Originally Posted by Exhibitman

This. The law ain't new; the enforcement effort is.

According to the Bureau of Labor Statistics, the underground economy in the United States is estimated to be equal to about 8.8% of GDP. Since GDP is about $20-23 trillion each year, the underground component is nearly two trillion dollars. Just taxing that under long-standing law would cover a gigantic piece of the government's activities. The people 'hurt' by having to pay the taxes they actually owe, boo-friggedy-hoo. Screw them. The tax frauds are just picking the pockets of everyone else.

As for politics, there is a Watercooler section where anyone so inclined can howl at the moon over whatever political nonsense he or she wants without annoying the rest of us who are here to discuss cards. Know it, learn it, live it.

Why do people keep clinging to this irrelevent justification like a life preserver? Is anyone in this thread calling the law new?

The sanctimonious comments I see repeated here regarding tax cheats are too much. Who are the "people" of which you speak? John Q. Collector who churns the bottom of his collection and occasionaly makes a few bucks or the Cash is King dealers that fill every show you go to? This new enforcement only nets the former and does nothing about the latter.

[Exhibitman]

Originally Posted by Stupe the Second Sacker

Why do people keep clinging to this irrelevent justification like a life preserver? Is anyone in this thread calling the law new?

The sanctimonious comments I see repeated here regarding tax cheats are too much. Who are the "people" of which you speak? John Q. Collector who churns the bottom of his collection and occasionaly makes a few bucks or the Cash is King dealers that fill every show you go to? This new enforcement only nets the former and does nothing about the latter.

That argument is entirely based on a logical fallacy: "two wrongs make a right." Everyone is supposed to pay the taxes they owe. You cannot justify one tax cheat by pointing out another one you think is worse.

Also, you have your facts wrong. The 1099 threshold lowering law is new; it was passed in 2021 to commence 1/1/22 and was kicked over a year after intense lobbying by the facilitated marketplace vendors like eBay who will have to prepare the 1099s.

More to the point, whether the 1099 law is new or not is irrelevant. As the CPAs here have repeatedly pointed out, the 1099 is merely a mechanism for the IRS to check compliance with existing tax reporting requirements. The underlying obligation to declare taxable income has been around for over a hundred years.

Calling people you disagree with sanctimonious is not an argument, it is an ad hominem attack.

The fact you clearly do not want to acknowledge is that only someone who has not been reporting his card-related income will get stung by the 1099 rules. Anyone who declares his income and pays his taxes already has no need to be concerned with the 1099 threshold changes. I got a 1099 in 2021 under the old threshold rules. Meant nothing to me because I maintain books for my card selling activity and report my income.