OT But probably affects most on this board

[ChiefBenderForever]

But what about the people who have been selling hundreds of thousands of dollars of goods under the radar ? They either have to get multiple accts or limit themselves to sales or report income. We are talking about millions of dollars here. So less sales will equal less revenue for ebay. My unprofessional advice would be to sell ebay stock soon but I am no expert and really don't know anything, I guess time will tell.

[teetwoohsix]

Originally Posted by JohnnyHarmonica

But what about the people who have been selling hundreds of thousands of dollars of goods under the radar ? They either have to get multiple accts or limit themselves to sales or report income. We are talking about millions of dollars here. So less sales will equal less revenue for ebay. My unprofessional advice would be to sell ebay stock soon but I am no expert and really don't know anything, I guess time will tell.

Or stop selling on ebay

[Jim VB]

Originally Posted by JohnnyHarmonica

But what about the people who have been selling hundreds of thousands of dollars of goods under the radar ? They either have to get multiple accts or limit themselves to sales or report income. We are talking about millions of dollars here. So less sales will equal less revenue for ebay. My unprofessional advice would be to sell ebay stock soon but I am no expert and really don't know anything, I guess time will tell.

Multiple accounts won't help. Anyone who Ebay determines may be close to the limit will be asked to supply Ebay/Paypal with a Social Security Number (or an EIN, for a business.) Multiple accounts will be liknked to either your specific SSN or your EIN.

Yes, I suppose that some sellers could stop selling on Ebay, but other avenues to sell through are just as easy for the information to be tracked (unless you think there will be a resurgence of weekly card shows.) Other, large auction houses will be next. Any credit card sales are already tracked, through the bank.

I would never advise anyone concerned about paying profits on taxes that the solution is to do less sales. I do wish they would all pay the required taxes on their profits.

[Dan Carson]

If Meg was in office this wouldn't happen!

[Exhibitman]

Originally Posted by Dan Carson

If Meg was in office this wouldn't happen!

Uh, yes it would. The law in question is Federal, not state, and passed in 2008, signed into law by George W. Bush.

[BleedinBlue]

...and how it affects my situation.

This year I decided to liquidate a fair number of cards for various reasons including space, change in collecting focus and finances. I've still got a ways to go on this clean-up which will roll into 2011. In my case I am selling cards which I have purchased over the last 30+ years and held in my personal collection. I don't have records on what I paid for each card except for those purchased in the last 4 years. How so I report "profits" when I don't know purchase price? Given that some of these cards have greatly appreciated but some have also drastically depreciated, where does that leave me from a reporting standpoint? At this point I plan on selling less. I'm not in business, I'm just trying to thin my collection. And I did expect to sell more than $20k in 2011. Certainly I planned on selling more than 200 items.

[Leon]

Originally Posted by BleedinBlue

...and how it affects my situation.

This year I decided to liquidate a fair number of cards for various reasons including space, change in collecting focus and finances. I've still got a ways to go on this clean-up which will roll into 2011. In my case I am selling cards which I have purchased over the last 30+ years and held in my personal collection. I don't have records on what I paid for each card except for those purchased in the last 4 years. How so I report "profits" when I don't know purchase price? Given that some of these cards have greatly appreciated but some have also drastically depreciated, where does that leave me from a reporting standpoint? At this point I plan on selling less. I'm not in business, I'm just trying to thin my collection. And I did expect to sell more than $20k in 2011. Certainly I planned on selling more than 200 items.

Unfortunately, I believe the rule is that if you can't prove a cost basis, to support your net profit/loss, then the cost basis is 0. I have done that with some cards when I didn't have the necessary back up.

[Jim VB]

Originally Posted by BleedinBlue

...and how it affects my situation.

This year I decided to liquidate a fair number of cards for various reasons including space, change in collecting focus and finances. I've still got a ways to go on this clean-up which will roll into 2011. In my case I am selling cards which I have purchased over the last 30+ years and held in my personal collection. I don't have records on what I paid for each card except for those purchased in the last 4 years. How so I report "profits" when I don't know purchase price? Given that some of these cards have greatly appreciated but some have also drastically depreciated, where does that leave me from a reporting standpoint? At this point I plan on selling less. I'm not in business, I'm just trying to thin my collection. And I did expect to sell more than $20k in 2011. Certainly I planned on selling more than 200 items.

My first advice is to get a professional tax advisor, and ignore all advice (including mine) that you get from a message board.

As an aside, I would go back and re-read your post, removing any reference to cards, and insert the words "stocks." If you were reducing your 30+ year holdings of stocks, you would expect to have some winners and some losers. You would know that you owe tax on the net amount of any profit. You would expect to pay that amount. The fact that it's cards makes no difference.

[BleedinBlue]

No doubt I would expect to record stock transactions and record them for tax purposes. However, I've never thought about buying a $20 blaster box at the Walmart checkout and writing off that $20 from my income when the contents ended up being worthless commons.

Considering that most of my collection was purchased out of wax boxes over the last 30 years I'm sure I've lost about 90% of my invested capital on those transactions. How do I write that off from my income?

Originally Posted by Jim VB

My first advice is to get a professional tax advisor, and ignore all advice (including mine) that you get from a message board.

As an aside, I would go back and re-read your post, removing any reference to cards, and insert the words "stocks." If you were reducing your 30+ year holdings of stocks, you would expect to have some winners and some losers. You would know that you owe tax on the net amount of any profit. You would expect to pay that amount. The fact that it's cards makes no difference.

[ChiefBenderForever]

Based on what Jim is saying ebay is going to lose millions in income, and sellers not reporting are going to have to get creative, using a spouse, relative, or someone they can trust to set up accts and bail out at 19k, and of course they will want a cut. The card market probly wont be affected as much compared to electronics, dvds, ect. On the bright side maybe some will see the light and get legit. I wonder how many don't have a clue and end up getting slapped by the big man, my guess is more than a few. With the huge sales the past few months of all the dumping of merch my guess is ebay will surpass earnings so maybe hold off selling for a few months, if they don't adjust earnings expectations they could get slaughtered the next quarter. As always I have no clue what I am saying but find it interesting, I have never understood how this whole situation was off the radar all these years.

As far as bleedinblue situation goes, my unprofessional advice would be go to the national and take the best cash deal you can get !

[Jim VB]

Originally Posted by JohnnyHarmonica

Based on what Jim is saying ebay is going to lose millions in income, and sellers not reporting are going to have to get creative, using a spouse, relative, or someone they can trust to set up accts and bail out at 19k, and of course they will want a cut.

Johnny,

Where do you think those sellers will turn? Right now, your premise is that these sellers would rather not sell than pay the taxes they owe. I don't think that's a very sustainable business model.

[ChiefBenderForever]

Thats a good question Jim, I'm not sure. Ebay made it possible for a lot of people to make a lot money on the side or full time but many never filed anything on it and I doubt will want to start now. I'm not talking about a business model, more of the cash cow that worked out for a lot of people that won't work as good anymore. Maybe pawn shops, flea markets, and action in the streets will start to pick up. I don't think it will have much of an impact on our hobby, but some sellers will have to be careful.

[jtschantz]

Originally Posted by Jim VB

Johnny,

Where do you think those sellers will turn? Right now, your premise is that these sellers would rather not sell than pay the taxes they owe. I don't think that's a very sustainable business model.

Bingo!..you are correct that this is not a sustainable business model for a business, but my guess is that most collectors don't consider themselves or thier collecting "habits" as a business. They collect items that interest them and sell off items when they get tired of them or want to free up cash for something else that has caught their eye. These (and I think there alot of them) are the people that are going to have to either run their hobby (obsession) more carefully in the future or get out. Ebay, paypal, and this board have made it much easier for the collector to obtain and sell items. I am not sure everybody is up for turning their hobby into a business. I think some will slow down or get out all together. I am glad this thread is going where I was hoping it would go.

I hear people complain all the time about buyers premiums (12-19%), ebay and paypal fees (10%+), but I have seldom heard anyone mention that they are taking a 20-30% tax hit on everything they sell. Why not? I really think this is going to have a huge affect on the hobby starting Jan 1. Hope I am wrong.

[Exhibitman]

Originally Posted by jtschantz

I hear people complain all the time about buyers premiums (12-19%), ebay and paypal fees (10%+), but I have seldom heard anyone mention that they are taking a 20-30% tax hit on everything they sell. Why not?

Because your statement is not accurate. If you are running a proper business you pay income taxes on net income (after expenses), not on gross sales. Roughly speaking, if a card costs you $100 and you sell it for $110 your taxable income from that sale is $10, not $110. BP, Paypal and Ebay fees are charged against the gross, regardless of the net profit or loss on the item. A 10% hit on a $110 sale is $11, leaving you at a net loss of a buck for the sale if the item cost you $100. A 30% income tax on $10 is $3, leaving you at a profit of $7 on that $110 sale. That's why the sales costs hurt so much more than the taxes.

Like I've always said, I wish I was paying a million dollars a year in income taxes.