PayPal and IRS

[Titan]

So let's say you inherit/get tired of an unknown/untraceable/not-easily-valued pile of stuff

It would have to be transacted through a single party for the $5k limit. One party doesn't care what the other party is doing.

You could sell $10k worth of hunting stuff - most likely you paid more than $10k for the stuff. No tax issue.

 

[Swamp Fox]

It would have to be transacted through a single party for the $5k limit. One party doesn't care what the other party is doing.

You could sell $10k worth of hunting stuff - most likely you paid more than $10k for the stuff. No tax issue.

Understood about the single party and the cost basis.

I'm wondering about the documentation of the cost basis more than anything else..

 

[Titan]

I doubt your tax preparer would require any documentation. But in the event of an audit, I doubt you would run into any issues unless it's fairly apparent you are operating as business.

 

[Swamp Fox]

I doubt your tax preparer would require any documentation. But in the event of an audit, I doubt you would run into any issues unless it's fairly apparent you are operating as business.

Yes. This is what seems common sense to me. The catch is how eager is the IRS to define down "operating as a business" and how big a fishing expedition they want to go on, to cast a wide net to scoop up a few fish not showing up on their sonar.

Also, the whole idea of requiring private transactions to be reported to the government just rubs me the wrong way, anyway.

 

[fwafwow]

Just for clarity's sake, it was my understanding that it was net profit vs a profit on an individual item.

Hypothetical: I sold a rifle this month at a loss of $150. I sell some primers next month for a $150 profit. I have zero income and don't owe tax.

Unfortunately you can’t use the $150 loss to offset the $150 profit, unless you are in the business of selling those goods.

So 5 K is the limit

Only for 2024 as an additional “transition” year. The limit will eventually go to $600 unless Congress acts to change the law. The IRS doesn’t have that authority.