IRS Delayed the 1099 600$ rule for one year. See article

[SHTF]

IRS delays much-criticized new tax rule on side hustles over $600

Plans to force millions of Americans to report third-party payment app transactions over $600 have been delayed by the IRS after it admitted 'confusion' around the controversial policy.

www.dailymail.co.uk

At least we have another year to buy and sell gear. its a damn shame this is what our country has resorted too. Hoping a new Administration will throw this crap out.

 

[fwafwow]

Thanks for the post. A few thoughts/opinions.

1. The one year deferral is on the reporting. I don't think that it means that transactions in 2023 are not going to be subject to the new threshold and reporting requirements (unless Treasury gives another "transition period") - so there is not another year to buy and sell gear. 2022 was that year.
2. I don't think a change of Administration would work - there needs to be enough of a change in Congress, and the will to do something, to change the law.
3. In the category of almost no one cares:
   • Selling gear for more than what you paid yields income - regardless of G&S vs FF, etc. Selling it for less doesn't produce income.
   • You are supposed to self-report your income. Whether you do or not is up to you - but the new $600 rule will eventually make it harder for those to choose not to do so if they use these payment forms.
4. I currently hate all politicians and think the bold portion of #2 means that this rule will eventually be implemented and is unlikely to change.

 

[Springer5110]

I thought taxing the most wealthy people would fix all the problems? Guess all those billionaires not reporting $600 transactions is what this is intended for and not the working middle class.

 

[fwafwow]

I thought taxing the most wealthy people would fix all the problems? Guess all those billionaires not reporting $600 transactions is what this is intended for and not the working middle class.

Now you have me curious as to whether there is anything out there that gives clarity (hahahaha) on why they went from $20k and 200 transactions to $600. Bizarre.

 

[Springer5110]

Also, the thing I agree with most from your post is #4. I am fighting stepping up on my soap box for this topic because I know it won't do any good but its tough.

 

[fwafwow]

Also, the thing I agree with most from your post is #4. I am fighting stepping up on my soap box for this topic because I know it won't do any good but its tough.

You know the normal rule of thumb to not talk about politics (at least in certain settings)? I still do my best to follow it, but when someone else brings up politics, it's surprising to me as to how many people nod in agreement (even if they are probably of another "party" or mindset) when I say "I think all politicians suck. All of them."

 

[74Bronco]

^Similar. I tell people that "I don't trust anyone that WANTS to live in DC." Either Party.

 

[Billy Goat]

 

[fwafwow]

More info from the IRS yesterday:

https://aboutbtax.com/6dg

 

[Roosterstraw]

So you don’t have to pay taxes on items sold in 2022?

 

[fwafwow]

So you don’t have to pay taxes on items sold in 2022?

For such a short and straight forward question, I'm not sure how to answer in a simple way. The article in the OP describes how the Form 1009-K *reporting* obligation for PP, Venmo, etc. does not apply for 2022. Whether you have to pay taxes on items sold in 2022 is (technically) not determined by the reporting obligation, but is instead based on whether you have income - if you sold items for more than you paid. Then you are supposed to report, and pay taxes, on the income (subject to deductions, etc.)

Clear as mud?

 

[Gmr777]

There is a lot of confusion on here, rightfully so, about the new (postponed) reporting.

Even if you received a 1099 for sales it is only taxable IF you sold items for a gain, over what you originally paid.

Sales of personal items, at a loss, are not reportable or deductible on your tax return. The IRS only wants to tax any “income” but will not allow losses, unless they are for a legitimate business purpose.

In short, if and when you receive 1099s for selling items on here or other sites and the cost to you of the items sold is more then what is reported on the 1099 there will be no income to tax.

When it goes through just Inform your tax preparer that the sales generated per the 1099 were sales of personal items at a loss, if that is truly the case.

There’s no reason for people on here to stop accepting G&S transactions other than it may create an additional piece of paper to include with your yearly tax information.

 

[fwafwow]

There is a lot of confusion on here, rightfully so, about the new (postponed) reporting.

On RS and other forums, definitely.

Even if you received a 1099 for sales it is only taxable IF you sold items for a gain, over what you originally paid.

Agreed. But technically the sale of any item for more than paid results in income, whether you get a 1099 or not. This is one part that I think is causing some confusion, as people think they won't have income if they accept via F&F instead of G&S - but that's just a way around the reporting rule, not to prevent income from being realized.

Sales of personal items, at a loss, are not reportable or deductible on your tax return. The IRS only wants to tax any “income” but will not allow losses, unless they are for a legitimate business purpose.

Agreed. And there are specific examples of this here - https://aboutbtax.com/6dg

In short, if and when you receive 1099s for selling items on here or other sites and the cost to you of the items sold is more then what is reported on the 1099 there will be no income to tax.

When it goes through just Inform your tax preparer that the sales generated per the 1099 were sales of personal items at a loss, if that is truly the case.

I think the above outcome is correct, but at least the IRS wants the 1099 either to be corrected, or for more info to be reported on the return

There’s no reason for people on here to stop accepting G&S transactions other than it may create an additional piece of paper to include with your yearly tax information.

Agreed. Just keep records, and as the above IRS FAQ makes clear, even if you have to reconstruct, or give "oral testimony" during an audit, that's doable.

 

[Billy Goat]

So if someone sold duck calls for more than they paid, does that income get offset by losses they took on bows??


Asking for a friend.

 

[Conrad101st]

That’s exactly right. You sell 2 guns for $1000 over your cost basis then you have a capital gain. If in same year you sell your 5 year old bass boat for less than what you bought it for then you can offset the the profit. It’s all about the total net gain in any given year.

I think what’s irritating is that the record keeping required to track the vast amount of crap we tend to flip out every year in our daily lives.

With stocks the broker can generally tell you the basis. But honestly, I have no idea what I paid for most of my guns for example, so how the hell do I know if I’m making a profit or not if I sell an old rifle on gun broker. It’s just creating a ridiculous amount of extra work to log everything you own to determine your cost basis on the off chance you sell something years down the road. They must think everyone keeps a running excel sheet of all the crap they own.

 

[Laramie]

Mail checks. Problem solved

 

[EJFS]

Time to start transacting with crypto, f-em they're all crooks and we have the technology to operate outside of their controlled and monitored system

 

[fwafwow]

Time to start transacting with crypto, f-em they're all crooks and we have the technology to operate outside of their controlled and monitored system

One risk of crypto is losing more in the crypto than taxes that could be due.

 

[fwafwow]

So if someone sold duck calls for more than they paid, does that income get offset by losses they took on bows??


Asking for a friend.

No. See Q7 at https://aboutbtax.com/6dg. Sorry (for your friend).

 

[carter33]

Most of the responses so far have been pretty educational and informed and I like to think I’m not the one to typically bitch or rant but think I just might here.

The government just passed a 1.7 trillion spending bill, the bill being over 4,000 pages long. The government and DoD specifically can only account for a shockingly low amount of assets and spending in a given year. But somehow my potential $600 payment even if it’s all gain must absolutely be accounted for by the IRS. To accomplish making sure I pay my gains they’re giving the IRS $80 billion. Then they claim the money given to the IRS is to go after the wealthy. Sure sounds great but the reality is the truly wealthy have lawyers and accountants that are top notch and “cheat” the system by utilizing the loopholes created by the system. Sure they might find an illegal scheme here or there and tangle up some athletes and Hollywood celebs but they won’t get at the true ultra wealthy. Then they’ll look at how they can make up for the claimed expected tax profits, watch out medium to small family owned businesses. Wether republican or democrat I always see “x” official is giving “y” amount of money to Ukraine or to some foreign area that had a natural disaster. Well the government doesn’t give anything, the taxpayers do and they take credit for political score when applicable.