OT But probably affects most on this board

[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.