Do you like higher taxes? Too bad, they are coming like it or not...

[roadrunner]

The below is not tax advice and should be discussed with your personal tax advisor.

Losses on personal assets are non-deductible. So you won't see any benefit from the loss, but you should have to pay tax on the income. Deducting personal losses is a violation of the tax law.

For most people they income from these sales would be considered hobby income. You would be allowed to deduct the cost of the item, so for 99% of these sales you will be selling for less than you paid, meaning there will be no taxable income. Deductions for hobbies are limited to hobby income, so again you derive a tax benefit from the loss other than offsetting the income earned directly from the sales.

If you could demonstrate your gear sales were a business and not a hobby ‐ this would be quite difficult for most ‐ the losses may then be deductible.

The link below discusses this in depth and most of the info comes from the AICPA.

It's going to become harder to avoid telling the IRS about income from selling stuff online. Here's what to know

The recently enacted American Rescue Plan Act significantly lowers the threshold for when online sellers will receive a tax form.

www.google.com

One last time just to make sure no one sues me ‐ this post is not tax advice and should not be relied upon as tax advice. You should discuss this issue with your personal tax advisor.

Senators and Representatives do way worse on breaking the law and we have to worry about this petty horsecrap.

IRS is the first entity that should be defunded...

 

[Bubblehide]

lol, First just tell me whether you're a farmer or not. If that's not the case then just lay out one hypothetical scenario to satisfy my curiosity. You don't even have to spell it out all the way.

A friend of mine that is on here has an ADC company, I have a hunting related company. Seriously, just find a good tax person that is willing to work with you.

 

[Justinjs]

A friend of mine that is on here has an ADC company, I have a hunting related company. Seriously, just find a good tax person that is willing to work with you.

I agree with you.

Anyone who complains about this, start a related LLC for $50 and you just loopholed their closed loophole.

 

[Silveroddo]

Lol, there's no loop hole. For the guys that are writing off their equipment, nothing has changed, before and after this change in legislation, you were determining your basis when you sold your equipment. The difference is depending on how you get paid, you'll be getting a 1099 over it which is only part of it because your accounting records are what will be used to determine your losses or gains.
What's changed is anyone that isn't trying to write off their equipment now has to submit documentation on anything they yard sale and receive electronic payment for, or they get double taxed on it. That's the bogus part.
The simple route is to save your receipts and just show you didn't make a profit on a sale, you don't need an LLC to do that. Just pointing this out before everybody goes on legal zoom and starts creating LLC's for no reason.

 

[MattB]

There's a bill making its way through congress now that would require banks to report all transactions over $600, so about that check...

Can you post up the bill # and details?

 

[rooster440]

Senators and Representatives do way worse on breaking the law and we have to worry about this petty horsecrap.

IRS is the first entity that should be defunded...

And the ATF


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[Rich M]

There's a bill making its way through congress now that would require banks to report all transactions over $600, so about that check...

The current threshold is like $10K. I think.

 

[Rich M]

A friend of mine that is on here has an ADC company, I have a hunting related company. Seriously, just find a good tax person that is willing to work with you.

As a guy who used to own a company - tax prep for a regular Joe is $500, tax prep for a business starts at $1,000. (At least those are the prices I pay/paid)

They charge based on the work involved. Paying twice the regular rate for tax prep to write off your "losses" on expensive hunting equipment is gonna cost ya.

Folks should be very concerned with every $600+ transaction being tracked and logged by govt - if it passes thru congress.

 

[roadrunner]

As a guy who used to own a company - tax prep for a regular Joe is $500, tax prep for a business starts at $1,000. (At least those are the prices I pay/paid)

They charge based on the work involved. Paying twice the regular rate for tax prep to write off your "losses" on expensive hunting equipment is gonna cost ya.

Folks should be very concerned with every $600+ transaction being tracked and logged by govt - if it passes thru congress.

Easy fix. Just make all merchandise and services equate to $599 total...

 

[Justinjs]

Lol, there's no loop hole. For the guys that are writing off their equipment, nothing has changed, before and after this change in legislation, you were determining your basis when you sold your equipment. The difference is depending on how you get paid, you'll be getting a 1099 over it which is only part of it because your accounting records are what will be used to determine your losses or gains.
What's changed is anyone that isn't trying to write off their equipment now has to submit documentation on anything they yard sale and receive electronic payment for, or they get double taxed on it. That's the bogus part.
The simple route is to save your receipts and just show you didn't make a profit on a sale, you don't need an LLC to do that. Just pointing this out before everybody goes on legal zoom and starts creating LLC's for no reason.

Alright you're right, loop hole is not the best way to say it.

 

[Elcy]

This has no bearing on majority of us that sell used gear. You will not be taxed on your used personal items that you sell for less than what you purchased them for. If you're operating a business to generate income, the rules haven't changed either. This isn't hard stuff.

@TK-421 please explain. If I understand the new rule correctly, any $ received though paypal for selling used stuff will generate a 1099-k. How would an individual prove it was sold at a loss, and where is the provision saying it won't be part of gross earnings?
Thanks!

 

[justin davis]

Vote Red

 

[Wapiti7]

You guys should talk to a CPA.

If you are selling personal assets (assets that have not been used/deducted in a trade or business), you should see no tax effect from this, unless you are selling these personal use assets at a gain (which is doubtful). The key here is personal and not business.

Personal - if I buy a pair of binos for $1,600, use them personally for 2 years then sell for $1,000. I have a loss on a personal use asset which is not deductible. If the $1,000 gets reported to IRS, then I would report the $1,000 of income but would show my basis equal to $1,000, showing no gain or loss. Yes, you do get to use your basis to offset the income.

Business - if I'm a guide and report that activity as a trade or business and I buy bino's for $1,600 and write them off on my schedule C and then sell those bino's for $1,000, then I do have a taxable effect...and report the $1,000 of income. This is only fair because you previously wrote off the full amount.

Business of selling goods - if I buy stuff ebay and then re-sell it, then absolutely this is a taxable transaction and likely yields ordinary income/loss (reported on schedule C for sole proprietors).

The only thing that has changed here is reporting thresholds, not the actual taxability of personal use assets sold. Realistically, what IRS is trying to do is to catch people that buy and sell large volumes of items (i.e. this is a trade or business) that do not report it. They are not going after bad hunters like me that sell shit when they don't kill an elk.

 

[Fartrell Cluggins]

Can you post up the bill # and details?

Biden’s proposal will require banks to report transactions over $600 to the IRS

WASHINGTON (WTVO) — President Biden’s American Families Plan will require financial institutions to report personal transactions of $600 or more to the IRS. Currently, financial institu…

www.mystateline.com

 

[MattB]

The current threshold is like $10K. I think.

I believe that relates to CTR/SAR reporting and only applies to cash deposits, not all transactions.

 

[MattB]

Reading more about this, it looks to be financial system-wide. It will really increase the reporting/compliance burden on financial institutions and related entities.

 

[MSElkHunter]

This isn't new, it's a clarification, due to people skirting paying taxes for goods or services. The $600 has been in place for a while, it's only requiring PayPal,Venmo, cash app, ect. to issue a 1099-k when it's hit.
Not news worthy.

The proposed legislation is not just directed at PayPal, Venmo, etc. It will also affect all bank accounts. So any bank account that have aggregate transactions over $600 for the year will have to be reported to the IRS. This will be a huge record keeping burden on the banks. It will also be a huge record keeping burden on the affected citizens. For instance, you pay for the house rented for a vacation and a few friends pay you back. It looks like you would have to document that the funds received were reimbursement and not income.

FYI, I work at a bank.


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[Fordguy]

I had 1099 income for the first time last year for some consulting I did. I didn’t know at the time there is an additional 15.3%. That was an unexpected kick in the nuts. So if you are in a high tax bracket, you’re paying >50% on that money. I guess we still aren’t paying our “fair share.” So I agree with @*Zap*. Those that want more of what I earn to support those that don’t want to work can suck it. I still cannot comprehend how people vote for this. Oh wait, they think everything is free. Sheepish.


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This is the first year I've done any consulting- i hadn't looked into the tax situation before hand. It doesn't sound very encouraging.

 

[tradman]

Yup - Biden has to support all the free-loaders somehow, might as well be on our backs.

Exactly, all the free- loaders and refugees coming in.

 

[chutinlead]

Does the PayPal part of this apply to friends and family or just goods and services?