TroutFishingInAmerica
Well-Known Member
- Joined
- Jul 19, 2020
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You have probably heard about the new lower reporting limit, it's $600. The previous limit was $20,000, and/or 200 transactions.
What this does is if you sell something over $600 and use a 3rd party, such as PayPal Goods and Services, you are going to get a 1099k and be required to pay taxes on whatever your amount was. The 3rd party that handles the money transaction will send you and the IRS 1099k forms. Ok, what if you bought tires and wheels and decided you didn't like them and sold them for a loss, but more than $600, well, I hope you saved that receipt, you can fill out a form with the receipt when you file your taxes and avoid the tax on the loss item. Don't believe me, I'm not giving advice, I'm just a just a bonehead on the internet. So now I asked my Tax Lady if I sold my original equipment bumpers, shocks, springs, tires and wheels, with no receipt except maybe a title or registration, what would happen? She is not a lawyer, she is an accountant. She told me without receipts showing a loss for each item, I would be paying taxes on everything. 20+%
This could easily turn into a cluster. Who has receipts for everything that they own? You have no receipt for take offs. There is some proposed items in Congress right now try to avoid this train wreck, we will see what happens. Things could change. Just be prepared you might be paying taxes on the take offs you sold. This is just my opinion, I don't give advice. I'm sure there is more knowledgeable people here that could contribute more information or correct any errors I might have made.
What this does is if you sell something over $600 and use a 3rd party, such as PayPal Goods and Services, you are going to get a 1099k and be required to pay taxes on whatever your amount was. The 3rd party that handles the money transaction will send you and the IRS 1099k forms. Ok, what if you bought tires and wheels and decided you didn't like them and sold them for a loss, but more than $600, well, I hope you saved that receipt, you can fill out a form with the receipt when you file your taxes and avoid the tax on the loss item. Don't believe me, I'm not giving advice, I'm just a just a bonehead on the internet. So now I asked my Tax Lady if I sold my original equipment bumpers, shocks, springs, tires and wheels, with no receipt except maybe a title or registration, what would happen? She is not a lawyer, she is an accountant. She told me without receipts showing a loss for each item, I would be paying taxes on everything. 20+%
This could easily turn into a cluster. Who has receipts for everything that they own? You have no receipt for take offs. There is some proposed items in Congress right now try to avoid this train wreck, we will see what happens. Things could change. Just be prepared you might be paying taxes on the take offs you sold. This is just my opinion, I don't give advice. I'm sure there is more knowledgeable people here that could contribute more information or correct any errors I might have made.
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