Casual Sellers: The IRS wants you

umtrr-author Dec 9, 2021

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  1. umtrr-author

    umtrr-author TrainBoard Member

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    My understanding of the way the law is written is that yes, it will be reported. It's on YOU to tell the IRS that it's not taxable income. There is that angle about reimbursement payments but I think that the taxpayer has to keep records about that. It's all a mess.

    I have further commentary about this but I'll self-censor :censored:
     
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  2. spyder62

    spyder62 TrainBoard Member

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    No but by law they have to pay sales tax on it every time it changes hands crazy
    rich
     
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  3. rray

    rray Staff Member

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    So, if they are going to tax old stuff you sell, then you should be allowed to add a "Basis" reduction. In other words, 20 years ago you bought a Life Like SW1200 for $89. You sold it on ebay today for $50. They want to tax you for the stuff you sold, because they are calling it income, but in reality, it was a loss of $39.

    They have to be fair to be legal. After all, you paid income tax to earn money for your purchase, then you paid sales tax to make the purchase, no they want to tax you on the sale of old stuff that you already paid tax for, so you should be entitled the Basis reduction. Ask your tax guy, and be sure to include tax preparation charges as part of your Basis.

    The IRS regularly deals with missing receipts and will often allow you to prove those business expenses using other means. The best thing to do is for everyone who is a casual seller and not a business seller, the under $20K per year guys, is to estimate what you paid for the stuff based off MSRP at the time, or price stickers on the box, etc., when you prepare your taxes. When the IRS starts auditing people, you simply tell them, hay, YOU changed the reporting laws in 2022, but we purchased stuff prior to that, and we are not a business. We are selling our old toys so we can get new ones. Nobody saved their receipts based off the old reporting laws, and I have a lot more old toys to sell in preparation for purchasing new toys as my interests have changed. SO, estimation of basis is a FAIR ALTERNATIVE to receipt. If all the people getting audited have the same story, then it's not a problem.


    Here is the latest revision of determining BASIS:
    https://www.irs.gov/pub/irs-pdf/p551.pdf
     
  4. JMaurer1

    JMaurer1 TrainBoard Member

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    After all the hard work that EBay has been doing to put themselves out of business, it looks like the Government has decided to help them along. The new non-scale postings has made finding things there much harder and I have already noticed some of the sellers I used to buy from have either left or are no longer posting things for sale, but this nail in their coffin might just start the end of them. I wonder how long before the TrainBoard Trading Post gets raided?
     
  5. Grey One

    Grey One TrainBoard Supporter

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    Google: "The Underground Economy" - We are being lumped in with drugs, guns and smuggling.
    Bonus: 'They' think this will help balence the budget.
    Let's see, (hypothetical);
    Amount they collect on: 1 Billion
    State and federa taxes: 40%?
    Amount collected: 400,000,000 (400 million)
    naaaa.
     
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  6. BoxcabE50

    BoxcabE50 HOn30 & N Scales Staff Member TrainBoard Supporter

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    Until we go all cashless. Then there will be an electronic track record for every stick of gum, each roll of TP, etc, etc, which we buy.
     
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  7. BoxcabE50

    BoxcabE50 HOn30 & N Scales Staff Member TrainBoard Supporter

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    An interesting question. The answer is that as soon as that happens, it will be shut down.
     
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  8. Shortround

    Shortround TrainBoard Member

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    How about donations to charities and church's ?
     
  9. rray

    rray Staff Member

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    Uh Oh, I suspect I just got this thread locked by having an opinion on it.
     
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  10. NorsemanJack

    NorsemanJack TrainBoard Member

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    I don't need receipts. I have records (item purchased/price paid/merchant/date purchased). Certainly some receipts may include this information, but the IRS doesn't specifically require receipts. They require accurate records. The level of detail is likely highly related to the magnitude of the purchase. My $60 locomotive won't require much. That $100,000 mint Lionel pre-war scale hudson? Likely a lot. Nobody should seek tax advice from an internet hobby forum.
     
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  11. Grey One

    Grey One TrainBoard Supporter

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    Correct. I hope folks here know that. Still, it does bear mentioning. ☻ My comments were sardonic at best and rhetorical at worst.
     
    Shortround likes this.
  12. umtrr-author

    umtrr-author TrainBoard Member

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    And therein lies the problem... spending the time to prove the "reality."

    I'm glad you shared that, Robert, as I'd never heard of it, although I'd never needed it either... But I must admit that I have a splitting headache now :eek:.

    I plan to sit on the sidelines for the duration, which is unfortunate since there remains a non-trivial amount of my dad's estate to disposition on behalf of my mom (sorry, it's all Horribly Oversize, not to mention "DCC-hostile") and I really did want that part of the basement back!
     
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  13. BoxcabE50

    BoxcabE50 HOn30 & N Scales Staff Member TrainBoard Supporter

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    The topic is certainly legitimate. But we've stepped out of bounds, per site rules. :(
     
  14. RBrodzinsky

    RBrodzinsky November 18, 2022 Staff Member TrainBoard Supporter In Memoriam

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    This thread started with interesting information for the community. It has now devolved into banned area, so is now locked. Offending posts are being removed
     
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