Paypal 1099K Tax Law

[Roc74]

you need to speak to an accountant. i believe you would only pay on the profit you claim since they are collectibles. i believe you can also get a deductible if you lose money on selling the same collectibles. bottom line is talk to your account or whomever does your taxes

You can talk to your accountant all you want, but if you dont have the paperwork to support your claims, then it wont help. How many people keep all thier reciepts of Collectibles they purchased many years ago?

I wonder if you can ask Sideshow to reprint reciepts for you from certain years?

 

[hydrobud]

You can talk to your accountant all you want, but if you dont have the paperwork to support your claims, then it wont help. How many people keep all thier reciepts of Collectibles they purchased many years ago?

I wonder if you can ask Sideshow to reprint reciepts for you from certain years?

i believe in your SS account there is a order history and PP has a order history as well. he needs to talk to his accountant to find out the rules on buying and selling collectibles.his PP deals may only reflect part of the picture . im sure all his buying did not happen through PP. if the overall is a loss he can get a deductible. he needs to find out what the rules are hence needs to speak to a accountant. maybe if he sold a car at below book value may be a game changer wether he owes or is owed. only his accountant will know for sure.

 

[Star Puffs]

How many people keep all thier reciepts of Collectibles they purchased many years ago?

Those of us who are accountants.

 

[King Darkness]

So, what you're saying is $200 and 20,000 transactions???

That makes no sense at all.

 

[Kingofthehill78]

So, what you're saying is $200 and 20,000 transactions???

That makes no sense at all.

No, In order to trigger the tax form issue from PayPal you have to sell 200 or more paypal transactions ( either through eBay or off) AND make $20,000 in sales. So say you sell 180 items last year and make $75,000 you will not trigger it . Or if you sell 600 items and earn $18,000 it doesn't trigger. It only triggers if you sell over 200 items and earn $20,000 in a single year.

 

[galactiboy]

200 transactions alone is a trigger. I am absolutely certain that I received no more than $5,000 last year, but still had them requested my SSN.

It may be a trigger to request your SSN (which I don't plan on giving them)... but they do not report anything to the IRS unless you have 200 sales transactions and $20,000 in sales.

So if you do not meet both one of those criteria you are safe for this year.

 

[karamazov80]

So, what you're saying is $200 and 20,000 transactions???

That makes no sense at all.

I've got 23,000 transactions, but only for $45. I'm good

 

[galactiboy]

Sorry to ask you this are you referring in your quote to 200 incoming payments and 20,000 correct? While on the phone just a bit ago with PayPal they said gifts received do not count and payments going out either
Only when you are the recieving end they said.

Yep, that is correct... gifts do not count and its only payments coming into you; ie you were the seller.

 

[Star Puffs]

It may be a trigger to request your SSN (which I don't plan on giving them)... but they do not report anything to the IRS unless you have 200 sales transactions and $20,000 in sales.

So if you do not meet both one of those criteria you are safe for this year.

You and Spekerol are correct. I assumed the SSN request was a 1099K trigger, but as someone else pointed out, the deadline is past and I for one have not received any 1099K or notice thereof at the PayPal site.

I guess the IRS considers $20,000 a reasonable materiality threshold and the 200 transactions signals a recurring business activity.

This is why I am not a tax accountant by the way. That takes a special breed.

 

[phobicsquirrel]

Dang, that really bites. Another reason why I won't use paypal with my bank account. There are thousands of complaints against them and the way they operate. Not saying that it's their fault on the tax thing just in general. I also had an account years and years ago and got really screwed by them with a sale I made via ebay. I mean I gave them all documentation including confirmations, signature confirmations, pictures and it wasn't enough. The buyer got their money back, I never got the item back and I was out both the item and the money. I couldn't even talk to them about it.

 

[MadCow]

I've been a seller on eBay for 14 years and I've NEVER hit 20k in sales ever.

 

[mmmmBrains]

Sweet ____. I'm in the clear....

*ninja vanish*

 

[ashkanls]

Be advised your car registration can be used as a write off because you paid the state.

 

[DarthKry]

Some of you guys are cold hearted.. I've had a growing collection of over 12 years which I ended up selling part of to make ends meet; my own personal goods which were purchased using my hard earned already taxed money. Yes $24,000 seems like alot of money, but I did not pocket anywhere near that amount. Just think of what your collection is worth and I've seen some of these huge collections. Imagine you had to sell your beloved collection because you needed to pay rent and other expenses so you and your kids could have a place to live. You know how rotten of a father I felt when my teenage daughter wanted a sweet 16 party and all I could give her was a small house party with pizza and chips. She was so embarrassed that she only invited 4 friends. Imagine explaining to that girl that dad is having a hard time right now because of the economy. Then having her tell you, "well can't you sell some more of those toys?" I was never a business; I never intended it to be one. I needed to survive, so I sold my prized stuff. Now it turns out that I will have to pay more money then what I actually made. How is any of this funny? Instead of trying to help with supportive comments, I get wise cracks and jokes from some people. How dare you.. Have you no hearts. This is really depressing for me and has me in shambles at the moment. I don't have the money to cover what they will charge me. What will I do come April 14th? Be in debt, hit with penalties and interest? Which I will never pay off.. Maybe even go to prison? My wife is not speaking to me as a result of this. She says I was irresponsible. I seriously am on the brink right now. I figured people in this community would understand my situation since I collect what you collect and offer me some sort of moral support. I do thank those of you who have offered suggestions and actions to take. Thank you. I'm sorry if I sound crazy right now, but I'm just about at the end of my rope here.

 

[tnaig001]

Some of you guys are cold hearted.. I've had a growing collection of over 12 years which I ended up selling part of to make ends meet; my own personal goods which were purchased using my hard earned already taxed money. Yes $24,000 seems like alot of money, but I did not pocket anywhere near that amount. Just think of what your collection is worth and I've seen some of these huge collections. Imagine you had to sell your beloved collection because you needed to pay rent and other expenses so you and your kids could have a place to live. You know how rotten of a father I felt when my teenage daughter wanted a sweet 16 party and all I could give her was a small house party with pizza and chips. She was so embarrassed that she only invited 4 friends. Imagine explaining to that girl that dad is having a hard time right now because of the economy. Then having her tell you, "well can't you sell some more of those toys?" I was never a business; I never intended it to be one. I needed to survive, so I sold my prized stuff. Now it turns out that I will have to pay more money then what I actually made. How is any of this funny? Instead of trying to help with supportive comments, I get wise cracks and jokes from some people. How dare you.. Have you no hearts. This is really depressing for me and has me in shambles at the moment. I don't have the money to cover what they will charge me. What will I do come April 14th? Be in debt, hit with penalties and interest? Which I will never pay off.. Maybe even go to prison? My wife is not speaking to me as a result of this. She says I was irresponsible. I seriously am on the brink right now. I figured people in this community would understand my situation since I collect what you collect and offer me some sort of moral support. I do thank those of you who have offered suggestions and actions to take. Thank you. I'm sorry if I sound crazy right now, but I'm just about at the end of my rope here.

Hang in there.


You know how some of these guys are like. Put your *idiot* filter on and ignore them.

It's hard, I can understand and your wife not speaking to you is probably not helping.

Compartmentalise it. Don't let it get to you.

Can you seek legal aid? Ask what can be done.

It's common sense to say that receiving 24k doesn't equal having 24k profits.

I'm sure you'll come out of this.

Hang in there.

 

[jye318]

Some of you guys are cold hearted.. I've had a growing collection of over 12 years which I ended up selling part of to make ends meet; my own personal goods which were purchased using my hard earned already taxed money. Yes $24,000 seems like alot of money, but I did not pocket anywhere near that amount. Just think of what your collection is worth and I've seen some of these huge collections. Imagine you had to sell your beloved collection because you needed to pay rent and other expenses so you and your kids could have a place to live. You know how rotten of a father I felt when my teenage daughter wanted a sweet 16 party and all I could give her was a small house party with pizza and chips. She was so embarrassed that she only invited 4 friends. Imagine explaining to that girl that dad is having a hard time right now because of the economy. Then having her tell you, "well can't you sell some more of those toys?" I was never a business; I never intended it to be one. I needed to survive, so I sold my prized stuff. Now it turns out that I will have to pay more money then what I actually made. How is any of this funny? Instead of trying to help with supportive comments, I get wise cracks and jokes from some people. How dare you.. Have you no hearts. This is really depressing for me and has me in shambles at the moment. I don't have the money to cover what they will charge me. What will I do come April 14th? Be in debt, hit with penalties and interest? Which I will never pay off.. Maybe even go to prison? My wife is not speaking to me as a result of this. She says I was irresponsible. I seriously am on the brink right now. I figured people in this community would understand my situation since I collect what you collect and offer me some sort of moral support. I do thank those of you who have offered suggestions and actions to take. Thank you. I'm sorry if I sound crazy right now, but I'm just about at the end of my rope here.

Don't be mad, when I post something here ppl do stupid common, just ignor them.

 

[DarthKry]

Thanks guys.. Yeah I need to take a breather from this. I'm on over reacting mode. Wife is freaking out causing me to do the same.

 

[gagaliya]

Some of you guys are cold hearted.. I've had a growing collection of over 12 years which I ended up selling part of to make ends meet; my own personal goods which were purchased using my hard earned already taxed money. Yes $24,000 seems like alot of money, but I did not pocket anywhere near that amount. Just think of what your collection is worth and I've seen some of these huge collections. Imagine you had to sell your beloved collection because you needed to pay rent and other expenses so you and your kids could have a place to live. You know how rotten of a father I felt when my teenage daughter wanted a sweet 16 party and all I could give her was a small house party with pizza and chips. She was so embarrassed that she only invited 4 friends. Imagine explaining to that girl that dad is having a hard time right now because of the economy. Then having her tell you, "well can't you sell some more of those toys?" I was never a business; I never intended it to be one. I needed to survive, so I sold my prized stuff. Now it turns out that I will have to pay more money then what I actually made. How is any of this funny? Instead of trying to help with supportive comments, I get wise cracks and jokes from some people. How dare you.. Have you no hearts. This is really depressing for me and has me in shambles at the moment. I don't have the money to cover what they will charge me. What will I do come April 14th? Be in debt, hit with penalties and interest? Which I will never pay off.. Maybe even go to prison? My wife is not speaking to me as a result of this. She says I was irresponsible. I seriously am on the brink right now. I figured people in this community would understand my situation since I collect what you collect and offer me some sort of moral support. I do thank those of you who have offered suggestions and actions to take. Thank you. I'm sorry if I sound crazy right now, but I'm just about at the end of my rope here.

Sorry to hear about your situation. But I dont get why you keep ignoring the advice offered here which is to see a tax accountant, they charge ~$100 and can get this sorted out in no time.

 

[Hirogen]

Some of you guys are cold hearted.. I've had a growing collection of over 12 years which I ended up selling part of to make ends meet; my own personal goods which were purchased using my hard earned already taxed money. Yes $24,000 seems like alot of money, but I did not pocket anywhere near that amount. Just think of what your collection is worth and I've seen some of these huge collections. Imagine you had to sell your beloved collection because you needed to pay rent and other expenses so you and your kids could have a place to live. You know how rotten of a father I felt when my teenage daughter wanted a sweet 16 party and all I could give her was a small house party with pizza and chips. She was so embarrassed that she only invited 4 friends. Imagine explaining to that girl that dad is having a hard time right now because of the economy. Then having her tell you, "well can't you sell some more of those toys?" I was never a business; I never intended it to be one. I needed to survive, so I sold my prized stuff. Now it turns out that I will have to pay more money then what I actually made. How is any of this funny? Instead of trying to help with supportive comments, I get wise cracks and jokes from some people. How dare you.. Have you no hearts. This is really depressing for me and has me in shambles at the moment. I don't have the money to cover what they will charge me. What will I do come April 14th? Be in debt, hit with penalties and interest? Which I will never pay off.. Maybe even go to prison? My wife is not speaking to me as a result of this. She says I was irresponsible. I seriously am on the brink right now. I figured people in this community would understand my situation since I collect what you collect and offer me some sort of moral support. I do thank those of you who have offered suggestions and actions to take. Thank you. I'm sorry if I sound crazy right now, but I'm just about at the end of my rope here.

I hear you, so sorry you are going through this! I also received a notice from Paypal saying I needed to supply my SSN. I did b/c I kept getting notices. But I have not heard anything since. I have been selling on ebay mostly. All items I sold I have collected throughout the years taking up too much room at present time. I ended up taking a loss on I would estimate 95% of it. I have had a lot of transactions but have not made anywhere near $20,000.

I know it is ten times worse when your wife is freaking out, that directly impacts you.

Hang in there.

 

[Kozin]

It does suck, I'm hit by the same deal, and got the email last week when I was in the middle of calculating my taxes. <insert profanity here>

While I'm not an accountant, or tax professional, what I've been able to gather is that even if you are not a business, you have to report all income. They're looking at profit. By law you are responsible to report any sale in which you made a profit.

So there's several things here.

Part of your sale includes shipping. You'll need to have all your ACTUAL shipping costs for this. (If you charged $5 for shipping, received $5 for shipping in PayPal, but paid $6 for shipping, the $6 is the deduction)

You use PayPal and ebay fees as deductions.

Actual sale of the item - (original cost of item + shipping + fees) = profit. It's the profit that factors into your income. (The actual sale of the item is the item selling price + shipping charged)

Unfortunately you have to remember the cost of what you paid for the item. And the loose parts I sold from my collection? Oh dear God I'm gonna start drinking now!

Form C is to report gain or loss from a business, but I believe there's one for personal.

Calling yourself a business now to try and save some funds or get tax breaks won't work for 2011 taxes as you would have needed to been a business last year. PLUS, you'll now have to show invoices for the purchases, and if you sold to anyone in the state you live, you are guilty of failing to pay state sales tax. You'll also need to pay for licenses (CT has an LLC fee of $250 every year). I have an official business for the shows I do and just like the folks that are online resellers, there's a lot to it.

Again, I have the same issue as I'm selling off over 20 years of my collection. Figures, loose parts, Legos, etc. Who'd a thunk I'd ever sell that much on ebay? More so, where's the cash?

I can't blame PayPal for this. It's our elected officials and various federal agencies that wanted a bigger slice of the 99%'s pie. What pisses me off about ebay is they no longer allow money order or check, and given that the feds never investigated them for it, helps me put 2 + 2 together.

John