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Check out the link. In 2022 if you sell something on Ebay, etc, and get payment from Paypal, etc, THIS WILL BE TAXABLE INCOME.
No kidding. So if I buy a two thousand dollar amp and sell it for a thousand dollars that's a thousand dollars of taxable income.
Between this and shipping rates going through the roof it looks like the golden age of being able to sell gear online is coming to an end.
'A lie is halfway around the world before the truth gets its boots on'. -Mark Twain
Follow Ups:
They have got to pay for the trillions in new spending somehow, this is merely the beginning
the rest of us won't be able to afford anything, anyway.
Face-2-face cash or trade only.Screw the credit and banking companies.
Leave your smart phones at home.
Edits: 05/01/21
.
Have Fun and Enjoy the Music
"Still Working the Problem"
You buy an amp for $2000 and sell it for $1000 you have a $1000 LOSS that you can use to offset any gains on something you actually made money on. Keep records!
If you are taxed on the selling price that is called a SALES tax.
In California, sales tax is added to registering a used car even if it's a private sale. That would be a huge windfall for some states if all Paypal transactions for merchandise had sales tax added.
-Rod
They're working on it.
Sellers haven't had to worry about collecting it.
I sell quite a bit on Ebay. If I had the burden of collecting sales tax and reporting it and paying it in every state (the rates vary), I would not be selling. It would not be worth the hassle.
Ebay does charge their fees based on the full amount of the transaction, including sales tax. I have a problem with that, but there's nothing I can do about it. I look at it as a service charge.
Come to think of it, I've been charged sales tax for buying on eBay, but not when I sold something which would get added to the buyer on PayPal.
-Rod
If the seller or you is a business, PayPal can be set-up to automatically do all the tax collecting.
If you are selling personal stuff occasionally, not for profit or income, you would not need to collect sales tax. You would have a separate PayPal account for this. But of course it's always best to check state rules for personal vs business.
Cheers!
Jonesy
"I know just enough to get into trouble. But not enough to get out of it."
This is also a form of double taxation.
and that's about all the Feds can tax one on in the case of selling a used piece of audio equipment.
This is NOT a change in tax law, it is merely a change in reporting rules for payment settlement firms like PayPal. You tax liability under the law is unchanged.
Now you MAY have had a tax liability with all of those tubes and LPs you've been selling over the year (likely not) but now Uncle Sugar will be receiving solid documentation of your activities and if you DO owe taxes on your sales, and you likely will not, you will have to pay.
.
The authorities get their cut, but they also get cut, so to speak.
While the businessman or consumer may resent the additional paperwork and/or surveillance, consider it from the libertarian's point of view. On the surface, another piece of data or paper sounds like more power to the government, right? But that's just the point: it's another datum for Colossus, who is already overburdened. Big data just keeps getting bigger. More to keep track off, less capably, by an ever-more incompetent work force. Have you ever worked in a Federal or State government agency? Capable, motivated and competent are not adjectives you'd commonly use to describe the average employee. And don't give me that "AI" BS -- the tools are no magic solution. The same tools that can make an expert work more effectively also amplify the ineptitude of mouth-breathing government employees. As my late Dad, who did his own taxes, used to smile with glee when the IRS asked for documentation. His motto was, "If they ask for a piece of paper, GIVE it to them!"
that's how bureaucracies become bloated, and this may sound redundant but ...
redundancy is a function of bureaucracy
also a fine example of a closed loop self fulfilling prophesy
regards,
That may or may not hold up. There is already a dispute, used by some in tax court about what is and what is not income. That is based on the Constitution and the IRS cannot override it.
It doesn't matter to me, I deal in cash.
In Ohio they want you to tattle on yourself about online purchases, and remit the sales tax. I figure the compliance rate to be between 0% up to 0%.
Nt.
Mark in NC
"The thought that life could be better is woven indelibly into our hearts and our brains" -Paul Simon
the difference between a lie and a mistake being 'willfully & knowingly'
in tax land, calculations are in 'compliance' territory
but yeah ...
Are you sure ?
If the item was purchased from a retailer, then tax was likely paid at the point of sale. Now another tax may be due at the point of re-sale. Looks like the person would be taxed twice.
In the present, any purchase made through an online or virtual portal will incur tax at the point of sale EVEN IF THE ITEM IS USED.
So again, the purchase likely incurred a tax to the buyer.
As to the example, it is likely that a loss can be declared. Purchase for $2k...sell for $1k after 5yrs. Useful life is likely 20yrs. To make it simple, assume 20yr depreciation; or 5% per year.
5% x 5yr = 25%. $2000 - 25% = $1500, which becomes the cost basis at sale.
$1500 - $1000 = $500 potential loss.
Taxes rates do not have to go up for the average person to pay more in taxes. My opinion is if we have to have taxes, make sure that loopholes are eliminated. If we increase the collection rate, then we can support lower aggregate tax rates. Result is a benefit for most, and fairness for all.
Consider the situation from the perspective of the original purchaser.
The buyer paid a tax at purchase.
The buyer may be liable for a tax when they sell the item at some point in the future.
One person, paying taxes on the same item, at two separate points.
A casual infrequent seller previously did not have to worry. Now gross proceeds will be reported to the IRS, and it becomes the responsibility of the seller to prove that a tax is not due.
"One person, paying taxes on the same item, at two separate points."
The tax is not on the product but on the sale. There were two sales.
The average person does not care for such distinctions.
The average person notes the amount of tax paid at purchase, the amount of tax levied against the (re)sale, and concludes that 2 taxes were paid.
Sales Tax, Excise Tax, Income Tax, Capital Gains Tax.....all are taxes in the eyes (and wallet) of the payer.
you're saying that you're the guy that's representing average people?
I always though it was an urban legend and his name was 'Joe Blow'
but you're the guy!
I'm a bit skeptical, but should questions come up ...
regards,
You are confusing sales tax paid at point-of-sale, and a potential capital gains tax (on net profit) at an eventual asset sale.
yes, he's sure. this is long settled tax law ... look up 'garage sale tax'
'rates do not have to go up for the average person to pay more in taxes'
that's an example of a 'true oxymoron' ...
if a loophole closes the rate went up whether or not the tax brackets moved
aka ... 'income capture'
regards,
Even the retailer pays tax twice. Once locally in the form of a sales tax based solely on the selling price and irrespective of new or used and any profit he might make on the sale, then, should he profit on that sale, a tax on that profit.
That's not 'double taxation' any more than if the merchant paid property tax on the building where the transaction took place.
Where claims of 'double taxation' might make sense is in the case of inheritance tax where one pays tax upon the inheritance of a property, at it's current value, then when selling it and pays taxes again on the total gain based on the original purchaser price.
No matter how you slice it, taxation is legalized theft.........
Hogwash Herr Krieger. It's how we create a society and pay for civilization. You know where you can place your Randism.
When they discover the center of the universe, a lot of people will be disappointed to discover they are not it. ~ Bernard Bailey
of organized society.
Eliminate all taxation and see what happens.
You wouldn't like it, no matter what you believe now.
Mark in NC
"The thought that life could be better is woven indelibly into our hearts and our brains" -Paul Simon
"Eliminate all taxation and see what happens.
You wouldn't like it, no matter what you believe now."
I haven't read any posts from people which suggest "eliminating all taxation". As far as I can see, your argument is completely unfounded in this thread.
Rather, I see posts from people who advocate for either higher taxes or lower taxes, or better use of tax revenue taken from the populace.
****
We are inclusive and diverse. But dissent will not be tolerated.
someone that it's all illegitimate, and therefore should be done away with. You clearly failed to pay attention.
Mark in NC
"The thought that life could be better is woven indelibly into our hearts and our brains" -Paul Simon
indeed ... but further to your point, there exists administrative laws as written, interpreted, and implemented [broadly as 'rules'] by the various agencies in their areas of responsibilities ...
so IRS tax rules / code is standing law & remains so until it's adjudicated
same for the FAA, FDA, FCC rules .. every agency starting with 'F' except the FBI, and then a bunch starting with 'H' amongst a few others
then it either stands or falls
in other words, if it's law it's legitimate, until it's not
best regards,
Not.
Without taxation you could have said that in the official language of the
United States, be it German, Russian, Japanese, German or Spanish, etc.
The French are losers, so French was never really an issue.
Instead you wrote it in English, but not PROPER, King's English.
"Once this was all Black Plasma and Imagination" -Michael McClure
Selling a product or service for a profit is not a capital gain at all. If the IRS was interested it would be taxed as income, cost adjusted if you made repairs or improvements.
live in it for decades and sell it for $2,000,000 and you will pay capital gains tax on the difference, less the cost selling it, 'improvements' (but not maintenance) and less any allowed homeowners exemptions (currently 500,000 for a couple?).
Again, nothing in the above noted change of reporting requirements represents a change in tax law.
Real estate and art are separate issues; the former sensitives to the will of congress and the taxpayer,art because it is not a commodity. If that was not the case all revenue(subtracted by cost and depreciation) earned by US companions would be taxed as 'capital gains ' which it is not, hence the complicated institution of business law to avoid overt taxation. Fortunes were and are made in real estate for good reason. Oil, gold, air line, Amazon pay their taxes not as capital gains but income.
for $5 and sell it through Southey's for $5 million, ya think they will report it to the IRS?Think I'll end up with a bill from IRS based on the selling price?
Will the %4,999,995 be taxed as income or capital gains?
Edits: 05/01/21
I'll give ya $100 for it and no one will be the wider.
capital gains
Collectibles(autos planes, books etc) are all taxed as income. Best to put them in a Roth IRA and avoid taxes all together. Congress created the Roth IRA for just that purpose knowing the full breath of tax avoidance.
no they're not, you've 'over generalized' ... there's a tax category for collectibles and it's very specific ... yeah, it does get complicated
but that's both by design and by unintended consequence / happenstance
there's sharp minds with sharp pencils and then there's just sharp pencils
*yeesh*
Simple rule; all commodities and services(trading gold oil, futures, options etc) if they produce profits(less cost and depreciation) are taxed as income. Art is not considered a commodity but electronics, vehicles are.Decades ago I used to trade autographed baseball cards and learned the hard way they cannot be reported as capital gains, even if you claim it is a hobby. IRS is not interested in that. Given the fact has little resources,(not my advice) they have a thresh hold in what would interest them So sell your Rembrandt-you will be fine. Lightening strikes. Some one last year found a Giotto in the attic of the house they bought.(that was great law suit between buyer and seller , regarding ownership painting.
Profit from LEAPs or Stock Options that expire more than 12 mos from day of purchase is treated as Cap Gains. Options are derivatives which is the same classification as commodity and currency contracts.
A few years ago the IRS declared that profits made from BitCoin trading would be treated as Cap Gains. BC is a virtual currency, and only trades in a commodity like market.
Profit from Options, Commodities, Currencies etc is generally short term (ie captured less than 1yr from date of purchase). Short Term Cap Gains are taxed as income. Long Term Cap Gains are subject to a lower tax rate.
"Art experts said on Monday that the painting, which depicts a crowd mocking Christ and was found during a house clearance in June in the French town of Compiegne, was actually a piece called Christ Mocked, by the great 13th-century Florentine painter Cimabue".
Legend has it that Cimabue "found" Giotto.
Hey Tinear, I am not giving up-even though a three dollar Chinese vase/jar was found at a garage sale a 100 miles from house and was sold for millions. Or the Jackson Pollock found accidentally house that was being sold worth 30 mill in Az. But I would settle for Lionel train set.
Well at least my memory is not completely faulty, but obviously faulty enough . Cheers.
Thanks!
d
HA! There are three, thankfully, at the Frick NYC and four at the MET in NYC. Those raw sienna and umbra palate colors may have tempted the deranged to place near the fire place hoping to extract the gold leaf.They are gorgeous and inspiring paintings.
I have friends who hunt the flea markets in NYC-One found a W. Blake water color on thick linen and thought he made the killing of lifetime(he was a school teacher with 3 alimony's and went back to smoking 2 packs of cigs a day but it took him a year to take it to Christie's-so firm was his delusion.Still believes it.
those transactions are [mostly] still treated as capital gains, just not as favorably under the 'collectibles' category ... there's certain dollar amount triggers on charged rates up to *gulp* 35%, and also time and frequency considerations ... 'flipped' under a year and I believe it's still a whopping 28% ... so hobbyist or not you're better off having proceeds treated as income in many cases when it comes to collectibles
as you pointed out, electronics aren't considered collectibles tax wise
yet
d
'if I buy a two thousand dollar amp and sell it for a thousand dollars that's a thousand dollars of taxable income'
actually, after depreciation, it's either a capital gain or a net loss
you just described a loss on the sale of real goods, not income on services
the Uber and Lyft drivers of the world will definitely be affected, but the bloke who runs through used gear in flips? meh.
save your receipts, set up a spreadsheet, apply reasonable depreciation
if you're an Ebay seller [etc.] of any volume you should be doing this anyway ... but the sky's not falling here gents
with regards,
Oh a sane voice!
Why would there be depreciation if you have not claimed a business deduction for it in the past? If the purpose is to recapture depreciation, or tax a gain, this may not affect those of us who just hobbyists.
Obviously, this issue deserves further study and clarification.
'this issue deserves further study and clarification'already done long ago and there's been IRS rules in place for decades
what's being discussed isn't new code it's just a downward adjustment on $$
also see: 'garage / yard sale tax'
be well,
Edits: 05/01/21 05/01/21
.
Have Fun and Enjoy the Music
"Still Working the Problem"
nt
all the best,
mrh
From the attached link -
"What Does This Change Mean For You?
If you're a contractor or an entrepreneur or a company that uses e-commerce platforms like e-Bay to sell or resell products or services, the Payment Settlement Entity (think PayPal or your Credit Card Operator) involved between you and the e-commerce company would send you a 1099-K form.
You will have to read and validate the transactions and adjust your reports accordingly. What may be treated as an income by the merchant entity may not be an income for you. So, you have to be extra conscious about your 1099-K reports and maybe even get expert tax advice from a tax professional. "
That's a big 10-4, as we used to say in the CB radio days.
all the best,
mrh
I suppose it's something to do.
"Once this was all Black Plasma and Imagination" -Michael McClure
if I had something better to do don't you think I'd be doing it?
[can't seem to remember so I was hoping that you'd know]
regards,
comment on other poster's having something better to do I would be doing something better.
However, I've washed the dishes, taken out the trash and cleaned the bathroom.
So here we are.
"Once this was all Black Plasma and Imagination" -Michael McClure
I simply despise detailing the latrine ...
but like Mom always said: 'hold yer nose pretend it's a rose'
and that was just the pillow talk I overhead!
the tax change has been distorted to mount a lame attack on Biden
no, it really won't affect hobbyist ...
or even people selling their own cars from time to time as private sales
though that would be 'visible' if a CC company or PayPal is involved
as always, do keep your receipts
regards,
Nt.
Mark in NC
"The thought that life could be better is woven indelibly into our hearts and our brains" -Paul Simon
it's old settled tax law Mark ...
small time evaders might get squeezed but there's a plan afoot for bigger fish
if you can't change the world, build a new one! that cost some big time $$!
regards,
you don't need any lame attacks on Biden...there are plenty of valid ones out there
do tell? wrong 'party' or not enough russian dressing for your salad?
something, something, ....
I guess we'll find out, either way, by whether we start receiving 1099s in the mail........
More RULES, FORMS, LAWS and REGULATIONS written by and FOR Lawyers.
Too much is never enough
We are just discussing audio gear here but obviously this means anything sold this way. So it's a really big deal, much bigger than just audio.
The politicians are pocketing the money..... To them, that's all what matters.......
Or in other words, they want our money to become their money. And they'll find any means possible to take it.
but it isn't that simple or nefarious.
Mark in NC
"The thought that life could be better is woven indelibly into our hearts and our brains" -Paul Simon
Todd check out some of the countries that don't collect much taxes.
See if you would like living there. I'm thinking of all those nice places like Mexico and all the other corrupt dicatatorsips that can't pay for roads, bridges, fire departments, police, schools etc.
Check them out, see if you think you would like it...
. I judge any sound system by how tiring it is to listen to.
Linkwitz
"Todd check out some of the countries that don't collect much taxes.
"See if you would like living there. I'm thinking of all those nice places like Mexico and all the other corrupt dicatatorsips that can't pay for roads, bridges, fire departments, police, schools etc.
"Check them out, see if you think you would like it..."
It's a lot easier to compare American states based on taxation......
I live in Arizona, which is a relatively low tax state (although it has gotten worse in recent time)..... I cannot afford to live in California or New York.... I've thought about relocating to Texas, whose taxes are even lower.......
People are migrating from high-tax states to low-tax states..... The population of New York City and the state of California is falling like a rock.......
California lost .46% of it's population in 2020 and is expected to gain it back this year. But never let actual facts get in your way.
pretty evasive answer.
And even if you look at state based taxation: look at the school systems, the road networks, the quality of the police, fire departments, institutions of higher education, etc. etc. etc. for higher tax rate states like Massachusetts vs. Texas, the analysis is incontrevertable.
All those mainstays of higher quality communities are in the relatively higher tax states.
Are people going to sometimes gravitate to lower tax situations for their own personal benefit? Sure.
Are people going to cheat on taxes? Sure.
Are people going to whine incessantly about taxes? Sure.
But the comparison is incontervertable. Overwhelmingly, higher taxes go to public services that benefit their populations.
. I judge any sound system by how tiring it is to listen to.
Linkwitz
I've been thru most of the lower 48 states many times over, and I see little difference in road quality, and quality of education. Yet I can tell you that those so called high tax states are at the bottom of the list education wise. I should know this as I interviewed them over and over.
Those so called tax dollars are high because your greasing somebody's palm, or meant to be skimmed somewhere along the way. Just happens everyday.
My all time favorite is a guy I know who had a manufacturing business making race car parts used in NASCAR and IMSHA. He did OK in California, but not what I'd call great. He and his wife would visit three or four states every year for a month while vacationing. Mark was in the Virginia / Tennessee area and out of curiosity contacted the local Chamber of Congress about what they could offer him in moving his business east. They offered him the moon and the sun to move east. But not a great big deal till the tax situation come into play. His moving east meant automatic 33% increase in wages for him alone! They even offered him land and all the essentiales need to build on. They offered training for new hires, He moved and has never gone back. Took his employees with him (close to two hundred people). About 25% of his staff stayed behind, and now all but a dozen or so have came to the new place (which gave them an automatic forty percent raise). The state gave him a tax abatement with the stipulation that he must hire within the state border, but they also trained them. Only thing California asked for was more money.
gary
Gary
'I've been thru most of the lower 48 states many times over, and I see little difference in road quality, and quality of education'
the lower 48 states are all of the contiguous states of the continental US
you didn't notice any differences? how fast did you go thru them?
'Yet I can tell you that those so called high tax states are at the bottom of the list education wise'
no they're not ... that's simply not true
what else isn't true in your post?
be well,
" Yet I can tell
you that those so called high tax states are at the bottom of the list
education wise."
of course, everyone knows Massachusetts educational system and high education is pathetic.
LOL
. I judge any sound system by how tiring it is to listen to.
Linkwitz
well I wouldn't call it great if that's where your headed. I would not begin to think about accepting a resume from a Harvard grad, but there are other schools there that are fantastic. MIT for one, and yet no better in the end than Rose Hulman or Cal Tech. Honestly; for 80% of the ap's I would take Stanford over Cal Tech. Engineering wise, I liked Georgia Tech and Texas A&M over 85% of the others. After you hire them, you see where you went wrong in 60 months or less. You almost never go wrong with Rose Hulman or Georgia Tech
gary
Gary
That said, only profit should be taxable. I.e., buy something for $500, sell for $1000, $500 should be taxable.
Keep receipts!
If you don't currently use a CPA, you might want to start.
We started using one to do our taxes when I retired and started a small consulting LLC. I love having the CPA do our taxes!!
all the best,
mrh
I bought a Threshold Stasis in 1981 for $2050 including tax and sold it a couple of years ago for about $800.
With the new guidelines, could I claim a capital gains loss?
When it requires a Tax Attorney to buy or sell a 40 year old amp? I QUIT......
Looks like you made 1250$ on the amp. Followed by 400$ in attorney / accountant fees than the flurry of paperwork drones, each of whom has a palm out......
Too much is never enough
He actually lost $1,250.
----------------------
"E Burres Stigano?"
I didn't follow that logic either.
Any time you sell something, the gov may hold you 'made money'....even if you are selling at a non-inflation adjusted LOSS.
It'll get figured by the method that screws you the worst.And if you want to get down to it? That 1200$ or so loss is actually worse. Inflation adjusted cost of a 2000$ amp from 1980 to 2015?
2000$ in 1980 is OVER 5500$ in 2015......5500-850=4650 which is quite a sting......A good case could be made for the guys that buy used?
Too much is never enough
Edits: 05/01/21
nt
all the best,
mrh
Government should not care if someone sells a used dvd player online for fifty bucks.
'A lie is halfway around the world before the truth gets its boots on'. -Mark Twain
used dvd player. They want in when you sell 12 of them and get 600 from your processing company. then you deduct your cost of those units...i.e. sell one you bought new for a few hundred and your taxable will be peanuts.
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