what exactly does ebay send now for tax purposes?

[Nostalgiabuff]

this is the first year I am selling since the new tax laws went into effect regarding ebay sales. do they send something that breaks down the sale price less ebay fees and showing the shipping charges?

the info on ebay said that we should only get taxed on any funds over what we had paid for said item. how is that documented? i am sure most collectors, like me, did not save any paperwork on what we paid for things on ebay.

i'm just trying to get an idea of what i might need for filing my taxes for this year, so any input is appreciated. it was so much better when they only taxed if your sales were over 20K

[LonnieFisher]

So, if you sell something for less than you paid for it, do you get a tax break?

[Dark Shadow]

DISCLAIMER: I am NOT a tax accountant.

I do have over 30 years of corporate accounting experience. My understanding of this new law is that you are required to show proof of your original expense, regardless of when that original purchase was made. If you bought a Mego figure last week, or if your parents bought it for you 50 years ago, you must prove the original expense amount. If you cannot prove your original expense, you must pay income tax based on the full amount of the sale. The burden of proof is ALWAYS on the taxpayer. Also, this law is for any sales made within the calendar year that exceed $600.00. My understanding (and I would love to hear that my understanding is inaccurate) is that $600.00 is total sales income over the course of the year, NOT strictly in a single transaction.

This new tax law, as well as the additional IRS agents added to the agency were sold to the public under the false premise of "going after the top 1% of the rich tax cheats". So if you sell online, simply cleaning out your closet, and you earn more than $600.00 in a single year doing that, you are now considered a "business" and will be held accountable to business tax law.

When will we as a nation learn that when politicians use the phrases, "It's for the children" and "Were going after the deep pockets" that they really mean "It's for my cronies and donors" and "We're coming after your pockets"?

Just my $0.15 ($0.02 from 1972 = approximately $0.15 today).

[Myoldtoys]

I’ve been reading about this too since I would like to purge some of my collection. Sounds like you will get a form from eBay with the sales listed much like you would for stocks. However, it is up to you to determine and document the “basis” cost to see what the gain was. You will also have to show if it is a long term or short term sale. You can only deduct losses if you are selling as a business. Hobby or infrequent sellers cannot deduct losses. Here’s the other awesome thing. What we have and sell are considered collectibles and the tax rate tops out at 28%. That’s why I am searching for other ways to sell.

[Jorge Galvan]

This applies only for Selling and not Purchases, correct?

[RonnyG]

At the end of each month, ebay sends you a financial statement which lists your gross sales, ebay fees, refunds, shipping fees, and your net sales (after fees and shipping costs, etc.).
It's listed under your Seller Hub>Reports>Financial Statements.
Just add up each month's total net sales amount to get your total net sales for the year.
It will not, however, show how much you paid for an item or what your profit was from each sale. You should keep your receipts or keep a record of how much you paid for an item so you can deduct it from your gross sales. That's the confusing part for me because sometimes I sell something that's been in my collection for years, and I no longer have a receipt for it.

[drquest]

Being in Illinois, I've been dealing with this for a few years. Basically you'll get a 1099 from eBay, or any other place you've been selling items from. Do you use PayPal to sell stuff directly, well they will send you a 1099 as well.

The 1099 will just show gross sales and that's what you are expected to put on your taxes as income. It's up to you to prove you didn't make profit on these things you are selling. Just like Dark Shadow mentioned, it doesn't matter if it's something you bought to flip, or have owned it for 30 years, if you can't prove you didn't make a profit on it, it's taxable income. Of course your expenses do count to how much you made. So say you bought it for $10, sold it for $20, for a net of $10. But there's fees involved, shipping, material etc, so your taxable will be the result of those costs.

It totally sucks, and how can someone that's not in business understand that they need to produce receipts for things they may have owned for 30 years?

[pmwasson]

I live in Oregon and have always ignored sales tax since we don't have it. I'm assuming when I sell stuff, I don't have to collect sales tax regardless of where it is going. Maybe I shouldn't ask if that is okay (ignorance is bliss).

[TRDouble]

I live in Oregon and have always ignored sales tax since we don't have it. I'm assuming when I sell stuff, I don't have to collect sales tax regardless of where it is going. Maybe I shouldn't ask if that is okay (ignorance is bliss).

Yes, you might want to (or not!) stay ignorant on this, LOL!

This, the credit card competition act... I just have to shake my head. They could have just dropped the limit down to $3,000 (I think it was $6000). But $600 makes sure we ALL get caught in the netting.

[Nostalgiabuff]

yeah, it's once again the government screwing us. i did look in both Entertainment Earth and Big bad Toy store and was able to print out invoices for all the stuff I bought there over the years

[Nostalgiabuff]

not sure if it will be accepted by the IRS, but if you look at your ebay feedback, it lists the price of the item. it took some time to print it all up and go through but the feedback with the price listed goes back at least 10 years. i think probably a lot longer as I have not actively collected GI Joe in 10 years and most of my purchases still showed in the feedback

[Dark Shadow]

I live in Oregon and have always ignored sales tax since we don't have it. I'm assuming when I sell stuff, I don't have to collect sales tax regardless of where it is going. Maybe I shouldn't ask if that is okay (ignorance is bliss).

Just for clarity, Sales Tax is a separate issue. The new law that is being discussed involves Income Tax. Meaning that if you sell something, and that sales amount meets or exceeds $600.00 in total within a single calendar year, the entire amount you receive for that item will be considered taxable income (less any provable expenses). Basically, when you do your taxes each year, you will have to report your sales as income along with any other wages that you have earned.

It has been estimated that the IRS could be hiring up to 87,000 new agents within the next decade to help enforce the new laws, with an estimated 30,000 to start before the end of the 2024 Federal fiscal year. It's difficult to determine what the actual numbers will be, one side of the aisle inflates the numbers, while the other side down plays them.

One thing is for certain, the IRS has received a substantial funding increase and they certainly aren't going to be using that money to make our lives any easier, nor will they be targeting the folks who can afford tax attorneys.

Regarding Sales Tax, ultimately, here in California, the burden is on the buyer to report any unpaid Sales (and Use) Tax on their annual income tax filing. Most businesses collect taxes and forward their collections on to the state, but if an invoice slips through without sales tax applied, the customer is ultimately responsible for ensuring those taxes get paid. Each state has their own rules, since Sales Tax is not a Federal tax (yet).

[Nostalgiabuff]

i don't know. ebay charges and deals with the sales tax here in NY. they collect it, it does not show on my invoices etc

[RonnyG]

not sure if it will be accepted by the IRS, but if you look at your ebay feedback, it lists the price of the item. it took some time to print it all up and go through but the feedback with the price listed goes back at least 10 years. i think probably a lot longer as I have not actively collected GI Joe in 10 years and most of my purchases still showed in the feedback

I did that, too, but that only works if the seller leaves you feedback. Sometimes they don't. Still, it is a fast, easy reference to see how much you paid for an item.
I also went on my paypal account and searched my past paypal activity because ebay used to be partnered with them, so I was able to print out some old invoices for some things I bought years ago that I recently resold on ebay this year. I think they only go back to 2016, though.

[Sideshow Spock]

There is bipartisan support in Congress to increase the ridiculous $600 reporting threshold to something more like $10K. I hope it gets done sooner than later.