IRS Bringing Major changes to 1099-K Reporting in 2022

Discussion in 'Marketplace Discussions' started by Spitfire, Apr 30, 2021.

  1. Spitfire

    Spitfire Senior Member Thread Starter

    Location:
    Pacific Northwest
  2. Atmospheric

    Atmospheric Forum Resident

    Location:
    Pinotville
    I guess I’ll be forced to file a sched C with an operating loss. Normally I consider it hobby income. I never turn a net profit. But if the IRS insists on me putting it on my return, I will oblige.
     
    tmtomh likes this.
  3. ScramMan2

    ScramMan2 Forum Resident

    Location:
    Portland OR
    Spitfire likes this.
  4. Spitfire

    Spitfire Senior Member Thread Starter

    Location:
    Pacific Northwest
  5. kwadguy

    kwadguy Senior Member

    Location:
    Cambridge, MA
    In some states, such as good ol' Taxachusetts, we already get a 1099-k if you "earn" $600.
     
  6. vinylbuff

    vinylbuff Forum Resident

    Location:
    North Port Florida
    I contacted my accountant and asked her about this fiasco. She told me that those 1099 forms would be submitted as "personal sales".....
    When I asked if they were still taxable, she replied with this:
    If it is property purchased to hold as investment, Yes, if not, No.

    And we all know we don't purchase music media or equipment to sell as an investment....... RIGHT??? :D
     
  7. Joseph.McClure

    Joseph.McClure Forum Resident

    Location:
    Memphis, TN
    So if what you sold wasn't purchased as an investment then you don't have pay any taxes on the sales?
     
  8. vinylbuff

    vinylbuff Forum Resident

    Location:
    North Port Florida
    Exactly..... you bought it, you played it, it sat around and then you sold it..... even if it was at a profit, it is not considered investment.
    On the other side, you bought 5 copies of a Mo Fi one step, left them all sealed knowing that once out of print they would escalate in value, you sell them at a nice profit........ then that would be taxable.
    But who determines this? You do. You never bought these with the intention of flipping them for a profit........ right? OR DID YOU...:shh:
     
  9. Dillydipper

    Dillydipper Sultan Of Snark

    Location:
    Central PA
    That reminds me, I have an old corporation "in a box" someplace, I need to close down. Been a "zombie corp" since I closed the business. That'd be one less page to file next year,

    That reminds me, I have a new corporation I need to start, for totally different purposes...:idea:
     
  10. kwadguy

    kwadguy Senior Member

    Location:
    Cambridge, MA
    Incorrect. If you sell it for more than you bought it for, you pay taxes on the amount you made. Intent is irrelevant.

    Intent can affect whether you pay self-employment tax and whether you can take other deductions (business vs hobby), but you pay taxes either way.
     
  11. Ctiger2

    Ctiger2 Forum Resident

    Location:
    US
    We seriously need an organized tax revolt in this country. Back in the day people raised hell for way less than what we put up with now. Not to mention the massive currency depreciation of the past 100yrs, the hidden tax. Outrageous!
     
    slipkid likes this.
  12. Partyslammer

    Partyslammer Lord Of The New Church

    So theoretically this site would have to report sales transactions like eBay, ect? Or not because SHF doesn’t charge or collect any sort of transaction fees thus leaving it up to the individual to report sales? Or is it strictly up to the bank(s) handling transactions? If it’s SHF in this case, I would guess the seller forums would be kiboshed.
     
  13. Combination

    Combination Forum Resident

    Location:
    New Orleans

    No, it would be Paypal doing the reporting, as that's where the actual transaction transpires.
     
  14. kwadguy

    kwadguy Senior Member

    Location:
    Cambridge, MA
    Since SH.tv isn't acting as a party to any transactions, they don't have to report any transactions.

    The difference between SH.tv and eBay or Discogs is that the latter two act as a middleman and therefore wind up with reporting obligations.
     
  15. vinylbuff

    vinylbuff Forum Resident

    Location:
    North Port Florida
    So I'm guessing that my accountant is wrong, and you are correct? I think I'll trust my tax person.
     
    ScramMan2 likes this.
  16. kwadguy

    kwadguy Senior Member

    Location:
    Cambridge, MA
    If your accountant truly said that you don't have to pay tax for an item that you sell for more than you paid for it just because you didn't intend for it to appreciate, then yeah, I think I'd get a different accountant.

    I doubt that's what your accountant actually said. I think there's a little bit of miscommunication going on here.
     
    GentleSenator likes this.
  17. vinylbuff

    vinylbuff Forum Resident

    Location:
    North Port Florida
    She's an IRS Enrolled Agent, licensed by the U.S. Treasury, and required by law to follow all the continuing education protocols.
    I have no doubt about using her services.
     
  18. kwadguy

    kwadguy Senior Member

    Location:
    Cambridge, MA
    Whatever you say.
     
    GentleSenator likes this.
  19. GentleSenator

    GentleSenator what if

    Location:
    Aloha, OR
    come on. the laws are different in florida. right?
     
  20. R. Totale

    R. Totale The Voice of Reason

    Just make sure she's signing the return.
     
  21. vinylbuff

    vinylbuff Forum Resident

    Location:
    North Port Florida
    "It's what I say"...
    Not so much the laws, but we do get a TINY break on taxes here in Paradise, although I was a little miffed at the tax increase this year.
    Between School, City, and County taxes, we went up a quarter of a mil and we're at 15.6 mils total, but we pay that after a 50K homestead exemption.
    Sales tax is 6-7% and we don't pay state income tax, any local taxes, wage taxes, or any other taxes that some people have the privilege of paying so they can write them off on their federal returns.
    Plus, it was hovering near 90 and the pool is so refreshing this time of year. :laugh:

    Yep, for the last 12+ years.
     
  22. Dave S

    Dave S Forum Resident

    To tell you the truth, I think you were always required to pay taxes. It's the reporting that changed. MA had a section on their tax form for sales tax on out of state online purchases as far back as 2003. But people complained when the sales taxes were collected automatically.
     
  23. SixthSpeed

    SixthSpeed Active Member

    Location:
    California
    The IRS did not push for this new 1099-k reporting requirements. It was snuck into the last Covid relief bill from March. The IRS may not even be prepared to handle the influx of 1099s they will start getting in 2023. The reason it was 20k/200 transactions before was to not burden the IRS or the tax filer with too much paperwork. As I see it, this new law is taxation without representation.
     
  24. RobsterK

    RobsterK Well-Known Member

    Location:
    Pasadena, CA
    Paying taxes twice on an item just doesn't sit right with me. Greedy government.
     

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