Question for all COMC Sellers
 

I'm one of those sellers that files a schedule C every year to properly pay for my taxes. 98% of my transactions are done on Ebay and I have no problem tracking my revenue, COGS, and profits.

I recently started selling a little on COMC and had questions on how you track your income there. I don't see a simple report that tracks the amount of income that you are getting from COMC.

I started tracking my own revenue, COGS, and profits manually on a spreadsheet, so I can report that income later. My question is, does COMC even track this to generate a 1099 for you? Or do they just track income from money you actually withdraw from the site? I guess I'm just wondering if I'm just spinning my wheels assuming that I have to track this, when income might only be realized when I make a withdrawal from my account. Hope this makes sense lol.

comc does not give anything.

i print out the store credit history for the entire year, and give it to my tax / finance guy

I use seller stats to figure out the profit or loss from selling cards on comc. I fill in the blanks best I can on the cards that I submitted to the site. Then I use credit history for all the fees that I pay comc.

At one point I thought they were going to issue 1099s? I remember them asking for information but then like a lot of COMC ideas nothing happens.

Just because no 1099 is issued doesn’t mean it’s not taxable. Also if you have some profit you may be able to make retirement plan contributions.

[QUOTE=glen87;20222317]comc does not give anything.

i print out the store credit history for the entire year, and give it to my tax / finance guy[/QUOTE]

Looking at your portfolio I feel for your tax guy. If you only give credit history and he is treating all purchases as an expense then if you purchase a lot it can mean an indirect loss. Later when you sell all of it then it can create a large profit if there is no buying. That would be tough on taxes.

I use my COMC only to move stuff from breaks I do not want. I have receipts for all the breaks I bought into which is alot more than what I get back from COMC.

I file Schedule C for all eBay and COMC activity

All top line sales are declared as "revenue".

All fees and other expenses are tallied as some sort of expense.

You can probably go a couple of different ways, depending on how you think of inventory. (Definitely consult with an actual professional tax person here).

You can keep an inventory from year to year. Inventory is the lower of cost or market. When you buy stuff for resale, that's an addition to inventory. When you sell stuff, the cost is deducted from inventory.

If the cost is known, you can use the cost as an expense to inventory. If the cost isn't known, you can probably do a number of different things, but using a percentage of sales seems intuitive and justifiable to the accounting types I've worked with.

With an inventory system, just make sure your beginning inventory this year is the same as your ending inventory last year, and make sure you can justify the numbers in a reasonable good faith manner.

Some people probably use a cash based accounting system, where they just keep track of the money they sent to COMC and the money they received from COMC.

I don't do this myself, so I don't fully understand the pros and cons. It's probably easier to calculate, but more difficult to justify the numbers if they were to come under scrutiny.

[QUOTE=sfgiants4life;20222404]
At one point I thought they were going to issue 1099s? I remember them asking for information but then like a lot of COMC ideas nothing happens.[/QUOTE]

If you get ACH payouts, their payment processor will send you a 1099-K, but only covering the net payouts.

PayPal sends you a 1099 for the money cashed out through PayPal.

COMC considers any "store credit" as not automatically taxable for income tax purposes because it's trading cards for store credit and store credit for cards, just as you'd do in a yard sale or with friends. AFAIK, it has not been challenged in court.

So the cashouts are considered your income to COMC, not every card sale through their site.

[QUOTE=checkoutmydeals;20222720]I file Schedule C for all eBay and COMC activity

With an inventory system, just make sure your beginning inventory this year is the same as your ending inventory last year, and make sure you can justify the numbers in a reasonable good faith manner.

[/QUOTE]

I actually do this, I use the accrual method of accounting and my inventory is reported every year from start to finish with the IRS. If COMC doesn't report anything but the payouts, I'm not sure the IRS can really dig into records to start chasing onsite profits. I suppose they could and if they did, man that could cause a huge #@#@#@#@ storm on the site.
[QUOTE=mjohnatgt;20222910]PayPal sends you a 1099 for the money cashed out through PayPal.

COMC considers any "store credit" as not automatically taxable for income tax purposes because it's trading cards for store credit and store credit for cards, just as you'd do in a yard sale or with friends. AFAIK, it has not been challenged in court.

So the cashouts are considered your income to COMC, not every card sale through their site.[/QUOTE]

Yeah this credit for card sales and then converting credit back to cash payout is slick and probably bypassing millions that the IRS could challenge. Thanks for the info.

[QUOTE=paparoke;20222974]I actually do this, I use the accrual method of accounting and my inventory is reported every year from start to finish with the IRS. If COMC doesn't report anything but the payouts, I'm not sure the IRS can really dig into records to start chasing onsite profits. I suppose they could and if they did, man that could cause a huge #@#@#@#@ storm on the site.


Yeah this credit for card sales and then converting credit back to cash payout is slick and probably bypassing millions that the IRS could challenge. Thanks for the info.[/QUOTE]

From an accrual point you are accurate, in actuality COMC's store credit at face is no different from any other ways to acquire store credit elsewhere. Its not really revenue. This is why I don't think it will be challenged, because it opens a huge can of worms across the board.

The only difference is the intent of the user, which can't universally be classified, allowing for a gray area of sorts in respects to COMC. On COMC you can earn credit via tasks unrelated to selling cards and I suspect COMC intentionally muddied the waters with multiple of avenues to earn store credit to allow for nontaxable earned credits.

Another strategy is just to buy really expensive cards and ship those home for private sell later. Its doesn't matter if you lose on the sell as long as you net out more than the cash out fee plus taxes.

I keep saying that you should see a tax person (CPA). Not all of the are equal.

Over the years I have talked to my share of tax people (CPA). They all have agreed that everyone can be different due to a lot of things. One had no idea even where to start or what I was talking about. Each year there is a post about taxes here and each year something new appears.

[QUOTE=Budler;20223585]I keep saying that you should see a tax person (CPA). Not all of the are equal.

Over the years I have talked to my share of tax people (CPA). They all have agreed that everyone can be different due to a lot of things. One had no idea even where to start or what I was talking about. Each year there is a post about taxes here and each year something new appears.[/QUOTE]

This is so true. You would think the tax code is simply black and white, but when you introduce the human element, the interpretation of that code widely differs.

I found that you can download sales history by year that is complete with purchase price, transaction fees, sales price and amount credited. Everything you need to be able to report profit and loss in the eyes of the IRS. With this information available, I'm honestly shocked as to why COMC doesn't issue 1099s.

Of course, you'll also have to factor in sales tax paid, and other fees(like security & storage fees)that doesn't factor into their purchase price, so COGS is a little incomplete.

COMC may only track "the money you have withdrawn," but what the IRS requires you to report is "the money you have earned."

[QUOTE=Elsa Smith;20224176]COMC may only track "the money you have withdrawn," but what the IRS requires you to report is "the money you have earned."[/QUOTE]

I agree, but I'm not sure that COMC is in compliance, since they do not send out 1099s, even though it is mandated that they are required to send them out if a seller exceeds $20K in sales. Like someone mentioned before, because they deal in "credits", they might've established a loophole that allows them to bypass this requirement.

[QUOTE=Elsa Smith;20224176]COMC may only track "the money you have withdrawn," but what the IRS requires you to report is [B]"the money you have earned."[/B][/QUOTE]

And for COMC what is that exactly? If you are flipping are you talking about the profit that you have made on each sale? If you are sending in, then you have the price that you paid to write off for each of those sales. I am sure there are many people who sold over 20k in the last year that also put in 20k to flip those cards (or whatever you want to use). I think defined the money you earned is so much more difficult than what anyone wants to deal with.

[QUOTE=paparoke;20223591]This is so true. You would think the tax code is simply black and white, but when you introduce the human element, the interpretation of that code widely differs.[/QUOTE]

One thing all of them asked was: Is it a[B] hobby or business [/B]for me? Meaning do I only use the money from sales for personal bills. Due to the small amount I get is sales they all had no issues with me not even putting it on my forms but did tell me to try to keep anything about my purchased and sales for 7 years,[B] just in case[/B].

PS. They do not care about each sale. They are looking at the total amount of profit and how you got that figure.

[QUOTE=fungi2510;20224340]And for COMC what is that exactly? If you are flipping are you talking about the profit that you have made on each sale? If you are sending in, then you have the price that you paid to write off for each of those sales. I am sure there are many people who sold over 20k in the last year that also put in 20k to flip those cards (or whatever you want to use). I think defined the money you earned is so much more difficult than what anyone wants to deal with.[/QUOTE]

From a COGS standpoint, for those who submit their cards to the site for sale, start to really make inventory cost a bit more difficult. You have to now adjust your cost as original purchase price + processing fee. It can be done, but when you send in 1K cards or more, it can be a daunting task. I'm just afraid that one day, the IRS will start auditing COMC and find that their users are subject to back taxes on sales. Personally, I'm just going to track and just pay taxes on my realized profit/losses on the site.

[QUOTE=Budler;20224479]One thing all of them asked was: Is it a[B] hobby or business [/B]for me? Meaning do I only use the money from sales for personal bills. Due to the small amount I get is sales they all had no issues with me not even putting it on my forms but did tell me to try to keep anything about my purchased and sales for 7 years,[B] just in case[/B].

PS. They do not care about each sale. They are looking at the total amount of profit and how you got that figure.[/QUOTE]

I registered an LLC, so I have no choice but to say business...as far as I know.

I do agree that the IRS wants the simple revenue/COGS/profits in the end. Like I said above, I'm just going to treat my COMC transactions as taxable events and avoid any future headaches with the IRS. I might be losing out on some money, but I think I'll sleep better at night.

[QUOTE=Budler;20224479]One thing all of them asked was: Is it a[B] hobby or business [/B]for me? Meaning do I only use the money from sales for personal bills. Due to the small amount I get is sales they all had no issues with me not even putting it on my forms but did tell me to try to keep anything about my purchased and sales for 7 years,[B] just in case[/B].

PS. They do not care about each sale. They are looking at the total amount of profit and how you got that figure.[/QUOTE]

Trump cut the IRS by 25% so the odds of getting audited now is extremely low.

I didn't get a 1099 from COMC or PayPal since I was below thresholds. I use the cash method and simply take COMC cash out minus cash in and add it as other business income not on 1099. Whatever I paid for the submitted cards externally is already included in my COGS.