questions about buying/selling

@stereo5 

It would be political suicide for any party to cut SS. It would require
60 votes in the Senate and a president's signature. Not going to 
happen. Move to Canada if you wish, healthcare isn't free, the taxpayers
pay for it. Enjoy the longer wait times for health care.
 

@tony1954,

My wife and I have been looking into moving to Canada as a couple of our friends have already done it.  If the House and Senate get taken over with republicans in the mid-term elections in a couple of weeks, that will be a very serious discussion for us.  The thought of us losing or getting less SS is a big reason.

Speaking as a Canadian citizen. Paying tax when you sell used equipment is criminal.

Maybe you should head north. Less tax and free healthcare.

That sounds right to me! 

I'm really just thinking that sellers are "disincentivized" (ugly word) to use PayPal goods/services, which in turn leaves buyers with little or no protection. 

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/

Facten: I'm sure that Mesch is right. You have to file the 1099k as part of your income.

So for a seller, there is either tax to be paid or the hassle of finding the original receipt and then paying an accountant (if you use an accountant, as I do) to file it correctly. 

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. 

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, 

@minorl "Hmmm, if you purchased an item new for $10,000 and sold it for $5,000 did you actually make money? or is it a loss?"

What's hard about it you didn't make money. All you need to do is have documentation for the purchase price vs the sales price ; if the former is higher than the latter you report no income, hence no tax

Hmmm, if you purchased an item new for $10,000 and sold it for $5,000 did you actually make money? or is it a loss?

Also, Paypal does not protect the seller at all.  Paypal protects the buyer only.

I actually prefer that the buyer come, to pick up the unit personally if possible.  Then I will have it connected and play their favorite music.  That way they see the condition and can determine if it matches the description I listed and they can also hear it operate. 

I'm not a shop.  I'm a private person selling something I no longer wish to keep.  My listings are always accurate.  I hide nothing.  I'm not desperate to sell anything.  

If the buyer wants the unit shipped and prefers paypal, then the buyer will be responsible for the additional paypal fees.

Paying taxes on something that one already paid taxes on previously seems sort of wrong to me.  But, oh, well.

enjoy

Outstanding, Mike. Thank you for confirming all that. I appreciate that you took the time to respond.

I understand why many sellers prefer to use friends/family, and I've bought that way with a seller out here on 'Gon--but in general I'd have to really trust the seller to do that.

It is only gain (profit) that is taxable. If you lose money, you don’t pay taxes. However, there may be more paperwork and you might need to consult a tax professional to handle that correctly on your tax return.

PP friends/family specifically excludes protections. And yes, your basic protections in the used market are (AFAIK) provided by PayPay. There can be minor assistance by the marketplaces, but PayPal is the main one, though if you are buying, your credit card company can be quite helpful if there is a problem.

Thanks, fuzztone. Do you know whether that "income" is offset if I'm selling something for less than I bought it for?

And can anyone confirm that, as a buyer on Audiomart, my basic protection would be PayPal goods/services? I don't see much in the way of protection using friends/family.

$600 limit starting this year for federal but our nanny state has been doing it for years. Once you get a 1099K you have to file it.