Audio Asylum Thread Printer
Get a view of an entire thread on one page
|For Sale Ads|
In Reply to: RE: friend needs eBay seller recommendation for NYC posted by learsfool on July 10, 2017 at 06:32:12
If your friend sells the records himself, he is selling his personal possessions, and there is no tax hit. If he gives them to someone else to sell on consignment, whatever they sell for becomes taxable income to the seller. When you crunch the numbers and consider all the work that it takes, it's easy to see why dealers will not usually agree to sell on consignment, unless the records are extraordinarily valuable.
I understood that proceeds from the sale of personal items is technically income, but generally goes undeclared and untaxed. You are "supposed" to include it on your tax return. Ebay/Paypal were asked by the IRS to report all sellers who had proceeds of $10k or more per year. Your point regarding an agent or service is well taken, but Ebay is a platform for facilitating person to person transactions and not an agent working to effect the sale.
Not so. If you sell personal items for less than you paid for them, no tax is due. However, if you sell for more than you paid, then you should report it as a capital gain on a collectible, taxed at your ordinary rate with a cap of 28%. You would report these sales on Part II of Form 8949, with Box F checked.
For a hired seller, how eBay works is irrelevant. He would report his total revenue, but the amounts paid out to the actual owners of the records would be treated as the cost of goods on his Sched C.
I looked into this. If you make sales consistent with and incidental to a hobby interest and eBay sales don't grossly exceed purchases in a given year, it is extremely unlikely that you would be regarded as behaving criminally. You can Google around and find what constitutes a "business" versus a "hobby" to the IRS but it's all gray area.
If your proposed sales DO greatly exceed your purchases, the right thing to do would be to declare profit as schedule (?), other income. So be sure to have good enough bookkeeping to show the profit after expenses as accurately and low as possible, that you can whip out smartly in an audit.
In any case, eBay does not does not issue 1099 tax forms to sellers, nor does it report seller's sales figures to the IRS. So no eBay sales by themselves will trip any flag with the IRS and they'd have to catch it in an audit. (You *know* if you're doing stuff that will trip a flag with the IRS and get you audited!-- The downside is that some secret percentage of audits are random and you might face one regardless.)
ebay may not send you a 1099K but paypal or other third party processors will.
the threshold is $20,000 AND 200 transactions.
Post a Message!
This post is made possible by the generous support of people like you and our sponsors: