Giving you a heads up on new tax law for buying and selling

ericgst wrote:

I started parting out a KX450 late last year and sold about $2000 worth of it in 2021 on eBay. I still have several auction listings...

I started parting out a KX450 late last year and sold about $2000 worth of it in 2021 on eBay. I still have several auction listings now for it and planned to keep adding parts as I have time. I used to sell items on eBay often, but haven’t done so much in the last couple years.

About a week into this year, someone purchased a small item, the transaction processed fine and the funds sent to my bank account. Then a couple days later, a set of forks sold for more than the $600 threshold. eBay said funds were received and to proceed with shipping. I purchased a label and was about to send it out. I checked the funds processing status and a noticed a banner was posted stating that my funds would not be processed until I provide my SSN so that they can send me a 1099. It said that they will request SSNs when annual sales approach $600. I will not give my SSN to eBay or any online system like that so I called the buyer to let them know. He suggested we use another form of payment. I refunded the sale with eBay and he sent funds through Zelle to my wife. I also gave him a discount, so everyone was happy. I have had 4 transactions complete this same way so far. I have not requested it from the buyers, I have just explained that I cannot process the transaction due to these changes and that I will refund them. I have been dragging my feet on removing the rest of the listings.

As far as PayPal goes, I haven’t received payment in a while, but have have thousands of sales in the past processed through them. PayPal sent notice for me to provide my SSN to keep my seller account a while back and I never did. I will not give them that info but can still receive money by accepting it and immediately transferring it to my bank. I cannot keep a PayPal balance. I know I can receive Friends and Family transactions but assume I cannot accept buyer protected transactions.

I am frustrated I cannot sell on eBay anymore, but it is not worth providing that intrusive level of personal information to them.

If you do not want to receive 1099s, simply do not give them enough information to provide them. It will limit your capabilities with their tools, but at least you will know the boundaries.

Now I have thousands worth of parts that I expected to be able to sell and have to find other ways to do so. I will likely focus on Facebook, OfferUp, VitalMX, and MX Locker. Hopefully enough sellers transition and bring a larger user base to those platforms. I also know that requiring PayPal Friends and Family, Zelle, or a Money Order is going to make it less desirable to buyers and delay my sales significantly.

GoggleFiend904 wrote:

Does anyone know of a simple app to save online receipts in? I normally lose money on everything I sell online, so it would be nice...

Does anyone know of a simple app to save online receipts in? I normally lose money on everything I sell online, so it would be nice to quickly keep track of receipts. If not, I’ll probably spend a day on Amazon, ebay, motosport, and rockymountain screen shotting receipts from the last year

SPYGUY wrote:

Unless you're running a business for profit, just because Paypal sends out a 1099 doesn't mean you have to claim it as income on your taxes...

Unless you're running a business for profit, just because Paypal sends out a 1099 doesn't mean you have to claim it as income on your taxes. (If you use a CPA, be sure to inform them that the Paypal funds were NOT income.)

If the IRS sends you an inquiry about the discrepancy, type up a response that states you were only selling used goods for less than you originally paid for them. As long as the amounts are reasonable, this should put an end to the whole affair.