Is this the end of buying/selling parts?

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Paul Hatfield
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Re: Is this the end of buying/selling parts?

#31 Post by Paul Hatfield »

Adam- the law has changed. The threshold is $600 total sales for a year. This is new, starting 1/1/2022.
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Mark Roth
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Re: Is this the end of buying/selling parts?

#32 Post by Mark Roth »

No more political comments please.
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Paypal Sales

#33 Post by Jim Wayman »

Perhaps three is a better heading that this topic should be under, but I will try this one. Like most of you, I have accumulated 356 parts over decades and occasionally sell some of them. I am not in the business of doing this. New regulations now require sites like Paypal to provide you with an IRS form 1099 if you receive over $600 per year thru them. This will create quite a hassle for those of us who are just pursuing our hoppy and not in it as a business. How many of you keep track of what you paid for any of the parts you accumulated 30 years ago? How do you calculate the basis of a part you sell so that you can prove what actual profit was realized? Because of this development, I plan to quit using Paypal or any similar platform as a means of getting paid if I sell something. Any thoughts out there on how best to deal with this and keep this a hobby, not a business for most of us?
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John Brooks
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Re: Paypal Sales

#34 Post by John Brooks »

Not an accountant, but I would make up a loose inventory of what you have. Print it with a date prior to Dec 2021. Put it in a spread sheet with cost, date bought. date sold, amount etc. IRS likes list.

I would price everything a little high, like the set of Lodge platiminum spark plugs , @ $ 278.00 you bought in 1968. After inflation, at that price, you will have a loss grater than the PayPal 1099.

I don't think the 1099 requirement will last too long
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Adam Wright
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Re: Paypal Sales

#35 Post by Adam Wright »

jim wayman wrote: Wed Jan 12, 2022 10:57 pm Perhaps three is a better heading that this topic should be under, but I will try this one. Like most of you, I have accumulated 356 parts over decades and occasionally sell some of them. I am not in the business of doing this. New regulations now require sites like Paypal to provide you with an IRS form 1099 if you receive over $600 per year thru them. This will create quite a hassle for those of us who are just pursuing our hoppy and not in it as a business. How many of you keep track of what you paid for any of the parts you accumulated 30 years ago? How do you calculate the basis of a part you sell so that you can prove what actual profit was realized? Because of this development, I plan to quit using Paypal or any similar platform as a means of getting paid if I sell something. Any thoughts out there on how best to deal with this and keep this a hobby, not a business for most of us?
The business is changing, even for people who do this as a hobby. I think this is why more guys are calling me these days to just come take it all, and leave cash. I'm sure they are reporting the cash to the IRS...
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Re: Is this the end of buying/selling parts?

#36 Post by Paul Hatfield »

I just did a quick scan of our Classified Ads. I was counting the ads where the asking price was $600 or higher. I stopped counting at 50. I sure hope members are aware of this new regulation.
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Re: Is this the end of buying/selling parts?

#37 Post by Wes Bender »

It's not the regulation that's new. It has always been required that you pay tax on profits from the sale of goods, either as a business or as an individual. What's new is the means the government is putting in place to better enforce it. Do I like it? No, but I have been in business (before I retired in 2002) and I understand it. There is a parallel situation with state sales tax in those states that charge one. If you don't pay an out-of-state vendor sales tax on a purchase, you're supposed to pay a use tax to your state. Let's face it. As more computerization happens, all of the taxing authorities are going to be able to share data. Again, do I like it? No. I am reminded me of the old song, "Skip a Rope".

I make my profits. I pay my taxes. I sleep soundly at night.
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Re: Is this the end of buying/selling parts?

#38 Post by Paul Hatfield »

Wes-
I understand and appreciate your comments. By "new regulation" I should have been more specific. What I really meant was the $20,000/year reporting from institutions is now changed to a much lower $600. Clearly, that level involves hobby people such as those selling here. PayPal and other electronic payment companies will be required to report the income. Hope I am stating this correctly.
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Emil Wojcik
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Re: Is this the end of buying/selling parts?

#39 Post by Emil Wojcik »

Paul Hatfield wrote: Thu Jan 13, 2022 2:56 pm Wes-
I understand and appreciate your comments. By "new regulation" I should have been more specific. What I really meant was the $20,000/year reporting from institutions is now changed to a much lower $600. Clearly, that level involves hobby people such as those selling here. PayPal and other electronic payment companies will be required to report the income. Hope I am stating this correctly.
I agree with Wes. Those "hobby people" were always required to pay tax on that $600 income. But obviously most never did. The new regulation basically makes that reporting mandatory -- you can't hide it anymore. It's forcing you to follow the already existing law, like it or not.

Although I understand why everyone is complaining about it, to me this just shows how many really never did include this as income -- no judgment from me, just an observation. Sounds to me like everyone's angry they can't cheat on their taxes anymore, unless of course it's cash...

Personally, since I was lucky enough to be able to retire from my corporate job when I was 44, I've needed to account for every payment I've ever received, no matter how small, in my current online business to make sure I qualified for the highest Social Security payments possible. And having just started receiving those SS checks last year, I'm glad I did, it was definitely worth it for me.

I understand not everyone's in this position and most will be unhappy about this change, but reality is the change is more of a formality to force people to declare income they were always required to declare anyway. Much harder to cheat now. It's that simple.
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Re: Is this the end of buying/selling parts?

#40 Post by Dan Epperly »

I think people are missing the point.
If I buy a part for $100 and stick it on the shelf for five years and then sell the car and no longer need the part and sell it online for $50 how is that “income” if anything it’s a loss. Same with a garage sale, how many people make “profit” on their garage sales? Yet the IRS would have us claim that any sales we make are profit? This would force people to file as a business so they can report loss in order to avoid paying tax but then they will be hit with other fees since this is reported to local authorities they will seek out business license fees, etc.
To me this seems like the governments way of going after low hanging fruit. Most people will simply pay tax on these sales since it’s too expensive or time consuming to fight it meanwhile the high roller tax cheats have their legions of lawyers to avoid paying their fair share. Business as usual I suppose.
The end around is to tell people they have to send funds as “friends and family” as that is not reported. Or send a USPS money order.

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Bob Forman
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Re: Is this the end of buying/selling parts?

#41 Post by Bob Forman »

What is going to happen when you take $600+ cash to post office and buy a money order? Will the PO take your SSN and report it to the IRS?
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Re: Is this the end of buying/selling parts?

#42 Post by Emil Wojcik »

In your example of selling a part for $50 that you paid $100 for years ago, it's a loss and you would need to declare it as a loss. So you would not be paying taxes on that loss even though you are (and have been for years) required to report it on your taxes. Pretty simple. As I've already said, this is nothing new, it's been the law for a very long time.

As far as garage sales go, you're talking about cash sales in almost all cases. Do with them as you see fit.
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Re: Is this the end of buying/selling parts?

#43 Post by Jim Wayman »

The discussion back and forth seems to be whether the IRS should be going after incidental sellers. For me, the hassle of filing taxes on gross sales of $600 that might equate to $100 of profit is not worth the time, forget about the legalistics.
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