Buying on the For Sale forum. Friends and Family and sweeping paranoia
- Thread starter StuartTKelley
- Start date
Where is the line between hobby and business? There are a number of sellers here who flip unchalked "brand new" customs regularly enough to be seen as a business. Yes, it helps the cue maker, but....
Also, there are some who do production cues in a way that seems they are wholesalers.
The OP defines what he is doing as a business.
Who gets a pass, and why
Also, there are some who do production cues in a way that seems they are wholesalers.
The OP defines what he is doing as a business.
Who gets a pass, and why
Who gets a pass and why?
Simple,
The smart guy with the best argument and set of facts will be that person. You have to create a meaningful reason and support it with valid provable facts.
When you can achieve that and do it better than anyone else.
That’s who gets the pass. And that’s the reason why.
It’s not for any other reason.
Know the rules, play within them. Understand the boundaries and make it happen.
When that’s achieved
You are all set.
Most people aren’t capable or too lazy. So they suffer the consequences and point fingers at the “privileged”, who tend to be the hardest working smart ones.
That’s all, not complicated
But does take discipline
Best
Fatboy
<——-paying his dues to this dayThere is a paypal problem I have not seen discussed: their reliance on USPS tracking.
Twice this month I have been involved with sales using paypal. Both times the tracking info was sent. All the while both packages were in the system, the tracking app showed them only as having been received. This remained 48 hours after delivery. If PP is holding cash, they will not release it.
Twice this month I have been involved with sales using paypal. Both times the tracking info was sent. All the while both packages were in the system, the tracking app showed them only as having been received. This remained 48 hours after delivery. If PP is holding cash, they will not release it.
Waiting 3 to 5 days for a check to clear is incorrect information in my experience. It can take up to 14 days for a check to be completely sure according to my banker.
I agree with just paying the fees or doing it in a safer way, whenever I thought I was slick and circumvented the system , I usually wished I had not.
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I’ve been through several personal audits and several business.
It’s extremely common to not have receipts. Again, you have no idea what you’re talking about.
You’re also not reading what I posted. The focus is on people who run what should essentially be a side business.
The IRS isn’t going to audit “Bill” who sold three cues this year and used goods and services. All Bill has to at the end of the year is state he sold three cues for less than he paid. Done. If he somehow gets an audit and there’s nothing else fishy, you simply explain you don’t keep receipts for trivial recreational purposes. If they for some reason ask for documentation, you can literally get it from a cue maker or any other reputable seller.
They aren’t looking to jam bill up.
Also, by law, Bill was already required to tell the IRS about the cues he sold.
So, if you were selling cues here last year and didn’t report the sales, especially if sold for a profit, you were already in violation.
PayPal having to submit didn’t change the fact that you weren’t doing your taxes correctly.
This is the funny part.
People such as above are mad because they were already not reporting their taxes properly and now there’s one less way they can.
And somehow it’s changed the entire landscape of taxes.
No, it’s just going to make you put your tax evasion in writing if you choose to do so.
No one gets a pass. And never did.
Before the reporting requirements about PayPal…..let’s say for example:
You bought a predator Panthera cue for $2,000. They have gone up over the years as they are highly collectible.
You sell it for $2500
You as an individual were already required to show that $500 as part of your income.
Anything you make money on is required to be submitted for tax purposes.
You’re also allowed to use a fairly subjective “market value” for items. This can be done several ways. You can use for sale forums such as these, eBay, etc to show what things are selling for.
You can call up a cue maker and have them send you a quote one what it would cost to make. Or have someone do an appraisal.
The IRS likely won’t even ask for this if you sell a couple items a year. But if you sell 100 cues and report them all as losses, they may want to dig deeper.
Fair marker value is used all the time. Especially with inherited items.
How do you think you would do taxes if you sold a family Heirloom that has been in the family since 1890?
Doesn’t matter if it was acquired in 1890 or 2021, as long as a good faith effort was made to give a fair market value, you’re fine.
The IRS isn’t going to say “that cue you said was worth $1500 was actually worth $1350.” That’s not what these reporting requirements are for.
Anyone terribly upset by this new reporting was already evading taxes. Now they just have to put the evasion on paper. Or report it as income.
You can call up a cue maker and have them send you a quote one what it would cost to make. Or have someone do an appraisal.
The IRS likely won’t even ask for this if you sell a couple items a year. But if you sell 100 cues and report them all as losses, they may want to dig deeper.
Fair marker value is used all the time. Especially with inherited items.
How do you think you would do taxes if you sold a family Heirloom that has been in the family since 1890?
Doesn’t matter if it was acquired in 1890 or 2021, as long as a good faith effort was made to give a fair market value, you’re fine.
The IRS isn’t going to say “that cue you said was worth $1500 was actually worth $1350.” That’s not what these reporting requirements are for.
Anyone terribly upset by this new reporting was already evading taxes. Now they just have to put the evasion on paper. Or report it as income.
I will not use USPS for sales any longer due to their poor tracking system- unreliable. I use Fed Ex now. Also, USPS has put a $15 surcharge on anything shipped that is even close to the length of a cue or cue case- this began in April. So Fed Ex is now much cheaper to ship a cue than USPS in most cases.
Obviously, now that in 2022 the laws require Pay Pal and Ebay to report all income of any seller who reaches the $600 limit in sales- that the only "pass" is if you sell less than $600 in the G&S category of E bay or Pay Pal within a given tax year. However, as VApool player stated, it is not in reality a pass since everyone was supposed to report all sales revenue anyhow - if they were so inclined to be a contributor to our growing welfare state gov't.
The point of all of this is not to argue or defend. I just think that many people here did not realize the magnitude of the tax law changes for internet sales in 2022 in terms of how your cue and case sales will be reported if you accept Pay Pal G&S or sell via e bay, etc. The reporting requirement for the internet hosts went from $20,000 per year per seller to $600 per year per seller.
The 1099-K reports WILL be computer matched by state and FED tax authorities to ALL of our tax returns starting this year. If your total reported revenue on W-2s, interest income, dividends, internet reported sales, etc. does not match the total reported income to the IRS etc. the computer mis -match WILL generate an audit letter - this is automated- it does NOT require an IRS agent to physically look at your return and single you out for a general audit.
I am just making all the folks here AWARE that they should prepare to have some form of documentation, substantiation, of their original cue and case COST BASIS, in order to respond to IRS audit letters. As all of us who sold cues or cases above $600 this year and accepted a reportable form of internet payment should now, for your own benefit try avoid future problems by reporting those sales to minimize your chances of an audit letter; and also being prepared to defend any profit or loss declared on those sales.
You just verified what I have been saying all along- for a cost basis- fair market value is the value or price on the date that you acquired the item, not on the date that you sold it. As for an inheritance- the stepped up basis rules ( which our present government is now also trying to change BTW) is the fair market vale on the date that you acquire the property as an inheritance- they are two completely different dates of valuation.
Please do not try to insult folks here with words like" you have no idea what you are talking about" I worked for the largest accounting firm in the world and was very involved in tax strategy, The idea here was just to inform folks that this year they should begin to pay attention to the new tax laws to avoid future issues with the IRS- not to pass judgement on whether folks here were right or wrong for not reporting sales in the past.
Any reputable business cannot use Friends and Family, beware of any business who asks you to use it.
At times I have had people ask if they can send it that way, I tell them no, PayPal knows it's business and they get theirs no matter what.
Mikemosconi makes a great point, stop the insults, let us all hit the LIKE button for that comment.
At times I have had people ask if they can send it that way, I tell them no, PayPal knows it's business and they get theirs no matter what.
Mikemosconi makes a great point, stop the insults, let us all hit the LIKE button for that comment.
One could also argue the rate of inflation is a factor. $1000 dollars today is not worth what it was 30 years ago...
Let's assume you paid $1000 for a cue in 1992. Then you sell it for $1800 in 2022.
Based on inflation, you just experienced a loss, not a profit.
its just like any 1099 you get it reported and you include it on your taxes. and can deduct your cost from that.
only if you get audited and may, by not including it will you have any issues.
however by using f&f for multiple transactions then its clear you are evading taxes and its a federal felony, unless you show it on your returns.
only if you get audited and may, by not including it will you have any issues.
however by using f&f for multiple transactions then its clear you are evading taxes and its a federal felony, unless you show it on your returns.
This would be something a tax lawyer or accountant would need to explain, but I don't think any purchase counts inflation in tax calculation. If you bought stock for $10, it went up to $40 in 20 years and you sold it, the tax would be on the profit not profit minus inflation. I think the only time I have seen things like that is for business where they take depreciation for assets they own over time, and I have no idea how it affects the taxes if any.
Funny tax story, not sure is it's entirely true, but it was told to me by a chemist I was doing a job for many years ago when interest rates were really high. We got talking about doing taxes and he tells me about how he got back at the IRS that year. He said that while you were required to pay interest to the IRS if you were late, they were also required then to pay interest to you beyond a certain length of time, same as you having to pay them. Said he always had money coming back and one year when what rates they had to pay you if they were late, was more than he could earn on the market, what he did was to sign his tax form but leave the figures blank. Then he sent along a check for thousands of dollars with his return. They cashed the check and deposited it, but it would take many months to get back to him to straighten out what his tax liability actually was, and that was that he was owed a return, even before the check he enclosed. They then owed him a massive return with interest.
You have to keep in mind this was well before computers. According to him, at the time there was a loophole that only required you to return your signed tax form by the 15th, but no requirement to actually fill it out. Seemed a little out there, but I knew him well and he was not one to lie.
You have to keep in mind this was well before computers. According to him, at the time there was a loophole that only required you to return your signed tax form by the 15th, but no requirement to actually fill it out. Seemed a little out there, but I knew him well and he was not one to lie.