As I understand it one should file the 1099, state that the selling price was lower than the purchase price (have receipts) and therefore represents a loss. Do to this being a hobby as opposed to a business the loss is not deductable,
questions about buying/selling
I know these topics have been covered but the last, long threads have been about specific situations, with lots of emotion. I have a couple basic questions about buying and selling. I should say that I have no feedback on Audiogon or Audiomart; I have a modest number of positive reviews on eBay.
These questions are in the context of Paypal reporting income and issuing a 1099k. If I'm understanding it correctly, any sales over $600 generate this taxable income requirement. It looks like many online sales now use the "family and friends" option.
BUYING: It looks to me like Audiomart offers no buyer protection. What protections are available to me as a buyer (other than research and due diligence)? If I insist on using PayPal goods/services (3%), does that provide me with adequate coverage through PayPal? I've read that using friends/family with a credit card offers coverage from the cc company, but I wonder if anyone out here has actually made a claim to a cc company this way. I wouldn't be surprised if a cc company was hesitant since family/friends is not supposed to be used for a purchase. Why would a cc company offer coverage on what should essentially be a cash transfer between friends/family? (And--there's a 3% charge to use a cc for family/friends, as I understand it.)
SELLING: I may want to sell a few things (CR-1, amp, etc). Without an established record, what assurances can I give a potential buyer here or on Audiomart? (I'm fine on eBay.) If I offer to use PayPal goods/services (and pay for it!), would that go far in reassuring a potential buyer that they're protected?
Finally: I think I read that I wouldn't have to pay tax on income from sales if I can show that I am selling the items for less than I purchased them for. Is this true? And is it easy? (Sigh. I'll just end up paying my accountant to do all the filing work. There's no free lunch.)
I appreciate any general advice here and I'm sorry if I'm misunderstanding how PayPal works. If there's a *recent* thread on this topic that doesn't get into outraged specifics about individual situations, please redirect me. I'm only interested in how the policies work.
- ...
- 14 posts total
This interests me: "If the buyer wants the unit shipped and prefers paypal, then the buyer will be responsible for the additional paypal fees." It seems to me more complicated than that. As a buyer, I would prefer not to send thousands of dollars via friends/family without any buyer's protection. What strikes me, though, is that if I request that the seller uses PayPal, and even if I pay the fees, the seller will get a 1099k (over $600) that he has to deal with. If I'm understanding it correctly, that would mean that the seller would be responsible for paying taxes on that income or somehow proving that he sold the item at a loss. At the very least, that's a hassle and very possibly an expense (paying an accountant). It seems to me that this is a change to the way that the used audio market does business, and I wonder how it is impacting sales. |
I didn’t say that you don’t have to file the 1099k with your return, I said in the example above that there is no taxable income from the transaction provided you can document your original cost. Watch the video incorporated in the below link, the CPA gives a detailed example of personal use transaction 1099K . Note the video gives a specific example using of how transactions were handled when the Federal reporting was $20K in transactions but the Vermont’s was $600 and the implications to the Federal return. Video still applies since the Fed threshold is now $600. https://www.lawofficesofjasonknott.com/where-to-report-form-1099-k-on-your-tax-return/
|
- 14 posts total