Selling Parts and 1099-K

RANT ALERT AHEAD>>>>>>

As a hobby, I like to pick up carbs from the KZ era, restore them, and resell for a little beer money.  By the time I buy some decent cores, put parts in them such as float valves, gaskets, jets, fresh screws, bead blasting materials, zinc plating materials, ebay/payal selling fees,etc, AND TONS OF LABOR, I'm doing well to make a couple hundred on a set.  Okay, my choice...so suck it up.  But NOW, I get a 1099-K from ebay for the selling cost.  In the eyes of the IRS, I've just had INCOME equal to the selling price.  BS.  I don't keep freaking receipts for everything I buy as an offset against selling price.  For my last years taxes I threw the 1099 from ebay in the trash.  Let them come after me.  This new tax rule went into effect last year so I doubt the IRS is going to get draconian chasing people right away, but that may change going forward.  

What are you guys doing about this?  Ignoring the 1099?  Paying taxes on the income?  Never selling parts on ebay or using paypal?  The blood sucksers never stop it seems.

BTW, how can I sell these without having the IRS coming after me?

 

Wow.  The IRS lowered the minimum from $20k to $600. 

www.ebay.com/help/selling/fees-credits-i...y-form-1099k?id=4794

That's going to be a huge hassle for a lot of people.  And those folks will certainly be severely over taxed.

"Your Form 1099-K includes the gross amount of all reportable payment transactions and does not include any adjustments, for example, credits, discounts, fees, refunds, or any other adjustable amounts"

Even ignoring what someone paid for an item they later sell, that person will be taxed on the sales tax collected by eBay as well as the shipping fees collected.  

​​​ That really sucks for normal folks who just want to sell stuff cluttering up their attic.

They always go after the easy target for a few bucks rather than the big corporations dodging millions every year, nice work on the carbs by the way.

What are you guys doing about this?  Ignoring the 1099?  Paying taxes on the income?  Never selling parts on ebay or using paypal?  The blood suckers never stop it seems.

The government forced ebay to do this.
The form has the total of items you sold, ebay and government has no idea what you paid for these items.
I have a folder for each project bike, I keep a list of everything I bought and what I paid, you should do the same.
Declare your profit as income.
If you don't report anything for several years you are likely to get letter from irs.
 

Save your receipts going forward like was said above.  If you don't have receipts from previous years at least you have a way to show your accountant (or the IRS in an audit) what your process is.

BTW, how can I sell these without having the IRS coming after me?

I guess the old fashioned way, with a money order. The 1099-K seems to only address payment cards & third party network transactions.

edit: I read it wrong. what a nuisance this is going to be.
www.irs.gov/businesses/understanding-your-form-1099-k
www.irs.gov/pub/irs-pdf/f1099k.pdf

ps: republicans in congress weakened/defunded IRS enforcement, so it's cheaper for them to go after the average American instead of the rich & corporations who can hire armies of expensive lawyers.  The IRS knows the avg guy like me can't afford a lawyer, so guess who is more likely to get audited?  So when directing your anger, think for a second. one side isn't the cause of all the BS in the United States.

ps2: I assume the reporting is supposed to cut down on money laundering, probably by drug dealers, unscrupulous businesses & some of the rich who want to avoid taxes.

@Nessism,

I spoke to my wife (CPA), she has couple of "eBay" customers. What you describe is pretty normal and nothing to be afraid of or worry about. This is just way things are.
Basically, (in eye of IRS) - you got all the money eBay reported. It's your job now to prove that you didn't actually make them.
1. eBay got all reports showing fees, shipping, etc. That one number you will deduct.
2. Everything you buy now becomes your expense. If they go about it like that - so do you. Every single expense around garage is now deductible. You bought motorcycle - deduct. You bought paper towels or paint - deduct. All of it. It's your operating expenses now. Screenshots from craigslist, pictures of purchased parts - all good proof.
3. Technically, whatever "beer money" left is your taxable income. Which might be less than what you think (after all of the expense). You might be at loss actually.
4. DO file those 1099s, don't ignore. You are not big enough someone will be after you investigating. They won't waste time trying to find couple hundred dollars (or even thousands)
5. If you ignore and don't file those - eventually you will get a letter from IRS and then it will be expense (Expense, not a problem, but you will need to deal with it)

 

Who lowered the reporting threshold to $600 a Year? 

Btw, my wife also suggested we start a "motorcycle repair" business as it's going to be a operating at loss   and help us with taxes.

By SWest: Who lowered the reporting threshold to $600 a Year?

I'm pretty sure it was part of the American Rescue Plan of 2021 which included the $1400/2800 Econ Impact Payments, so it would have to be Nancy Pelosi & the Democratic Party, since every single republican voted against the legislation.

technically we all should have been paying taxes on this income from the very beginning so trying to blame someone over it is just stupid, the law didn't change, its just harder to break it and not get caught.  If you don't want to pay income tax just become a billionaire. Part of this was an effort to stop people who had multiple accounts they stopped using at the 20k benchmark. you could have 10 accounts and be making 19k on each and not report tax.

That being said its pretty easy to write things off, I sold quite a bit of parts on ebay last year and paid very little in tax.
get an accountant, yeah you gotta pay them but at the end of the day they save you money. My accountant realized my employer was withholding too much tax this year and I got a fat refund. never would have known otherwise.

Yes it was the 1st commie rescue the start of printing trillions of $.
Called the GIGA tax. The socialist planned on hiring 80,000 IRS workers to fleece the small little piss ants as myself! Hire workers?? No one wants to work now!  Pipe dream. Maybe al;l the Illegals flowing across the southern border can be trained in 2-3 yrs. to do these jobs!

All my old junk I sell (sold) was taxed when new!

I don't itemize! Do you? Lucky if you do! Single Federal standard deduction is $12,000 single. In New York my real estate taxes are $5,000 yr. Mortgage note interest on 2 houses is only about $3,000, it's tough to come up with $4k more to itemize without forming a small LLC business for write offs. I wonder how ebay has enjoyed all my ebay sales customers sales tax that they paid to ebay???. Since 1-1- 2022, I have over $3,000 in eBay sales so far. But whatever? The socialist still allow beer sales

EVERYONE I KNOW is going to facebook marketplace selling private between 2 people. But very risky as you all have seen the scammers burning people!

Yard Sales! Bike Swap Meets! Word of mouth?  I'm done selling. I ranted 2 and 1 yrs ago. about this When ebay wanted your SS #

Sure does suck! So does selling a bike and frame and still waiting 5 weeks for a guy to pick it up??? I enjoyed his $500 non-refundable deposit. Just made contact today! Pending arrangements he is in Ohio 6 hrs. away.

I'm done! BUT! I Just scored a nice set of MarkII cases from a member USA forever Jim, in Rochester, NY yesterday! Nice guy, nice collection in his garage! 55 minutes from my home.
I am a gluten for punishment! I always have 5-10 projects going! Including a 48 Austin pick up street rod. not my place but family!