Paypal 1099-k

[3of5-2]

I know of one Walmart associate that bought 99% of the Prizm, Mosaic, Chronicles, Hoops, and Bowman before anyone else could get to it. He went out and bought him a new Lexus. Good luck trying to explain that.

[hatchd]

Originally Posted by coachnip13

Half of these cats didn't even know income tax was a thing until yesterday. You think they had an accurate inventory on January 1, 2020?

Absolutely not. But they have to start getting educated somewhere. I'd love to have the time to go through the entire thread and answer/refute every post, but most people don't listen anyways.


Sent from my iPhone using Tapatalk

[rngrdanny22]

Originally Posted by hatchd

Absolutely not. But they have to start getting educated somewhere. I'd love to have the time to go through the entire thread and answer/refute every post, but most people don't listen anyways.


Sent from my iPhone using Tapatalk

I've been back in the hobby since 2015, but didn't start selling stuff until 2016. Got my first 1099 at the end of 2016. You bet your sweet butt that I spent HOURS going through my PayPal transaction history (coupled with eBay history, Blowout forum purchases, etc) to create a holistic card purchase database back to when I got back in the hobby.

It was a tough lesson, but I'm VERY glad that I used that learning experience to properly catalogue my purchases and sales.

[coachnip13]

Originally Posted by mjohnatgt

The money doesn't go to the IRS employees;

GTFOH

[mjohnatgt]

Originally Posted by coachnip13

GOH

If you want your cut, there are kickbacks for squealing on people, right? Is it 10% like most finder's fees? If the IRS ever audits me, I'm going to point them at PWCC, Probstein, and Goldin and say "go after their consignors."

[coachnip13]

Originally Posted by mjohnatgt

If you want your cut, there are kickbacks for squealing on people, right? Is it 10% like most finder's fees? If the IRS ever audits me, I'm going to point them at PWCC, Probstein, and Goldin and say "go after their consignors."

I have no idea what you're talking about.

[Wildcat55]

All the old, crotchety guys at the Card Shows that usually deal in cash salute you all. The old joke that many flippers will never understand is the old schools guys give you a penny back when someone says “1099”

[blitzaceod]

Hi everyone, I think I have an idea of the answers to these but I am hoping someone here can jump in.
First,
If I am deducting the cost of something, can I deduct the tax I paid on it and the shipping cost to get to me as an expense?
Example, a card is 100, but I also pay $8 tax and $5 ship. So is my cost for the card 113 (assuming I can document what I paid)? And if I sold it for say $200, then my taxable gains would be $87

Second,
If I buy a box of cards for $150 and I sell one card for $200 from that box (and nothing else), can I still deduct the entire 150 since that was the cost of getting that card?

Lastly,
Would grading costs (including shipping) be deductible?

[Stech36]

Originally Posted by blitzaceod

Hi everyone, I think I have an idea of the answers to these but I am hoping someone here can jump in.
First,
If I am deducting the cost of something, can I deduct the tax I paid on it and the shipping cost to get to me as an expense?
Example, a card is 100, but I also pay $8 tax and $5 ship. So is my cost for the card 113 (assuming I can document what I paid)? And if I sold it for say $200, then my taxable gains would be $87

Second,
If I buy a box of cards for $150 and I sell one card for $200 from that box (and nothing else), can I still deduct the entire 150 since that was the cost of getting that card?

Lastly,
Would grading costs (including shipping) be deductible?

Answer is.. talk to a CPA.

But for grading and cost of card, you can deduct it all assuming you sold it all.

The second question. I’ve heard many different things from many different people including different CPA’s

[tribefan26]

Originally Posted by starwolf1234

I got mine this morning. Yay, Illinois. 111 transactions and $4500. CPA friend said since I do view mine as a legit hobby based on IRS definitions I should just put it in hobby income. No hobby deduction hurts, but whatever. Should have saved a couple hundred bucks instead of buying PC cards, but live and learn.

Please ask your CPA what section of taxcode or IRS Source he means by "a legit hobby based on IRS definitions". I'm not a tax code expert, but I have nfc what he is referring to.

[coachnip13]

Originally Posted by tribefan26

Please ask your CPA what section of taxcode or IRS Source he means by "a legit hobby based on IRS definitions". I'm not a tax code expert, but I have nfc what he is referring to.

It has been posted a few times in this thread. There are specific questions and qualifications that point you toward being either a business or a hobby.

[MiamiMarlinsFan]

Man, every few months or so the topic of taxes comes up here and you guys go on for 20 flippin’ pages about it. Just talk to your tax person.

[tribefan26]

Originally Posted by Sprewell8

If I bought more cards for my collection via paypal goods and services than the total gross amount it states I received on my 1099 when sold cards via paypal goods and services, does that mean i can report it as a loss and dont owe anything since technically i didnt make profit? Is that correct?

No, it is very incorrect.

[coachnip13]

Originally Posted by MiamiMarlinsFan

Man, every few months or so the topic of taxes comes up here and you guys go on for 20 flippin’ pages about it. Just talk to your tax person.

Just like with the guy who posted the COGS formula.....you think these guys have a tax person? They just learned what 1099 meant within the last 24 hours.

[nerdherd020]

Originally Posted by rngrdanny22

I've been back in the hobby since 2015, but didn't start selling stuff until 2016. Got my first 1099 at the end of 2016. You bet your sweet butt that I spent HOURS going through my PayPal transaction history (coupled with eBay history, Blowout forum purchases, etc) to create a holistic card purchase database back to when I got back in the hobby.

It was a tough lesson, but I'm VERY glad that I used that learning experience to properly catalogue my purchases and sales.

Same here. I got back into the hobby in 2010 after a half decade away and I started selling in 2013. I made sure to keep a spreadsheet of everything I purchased and sold including eBay and/or PayPal fees and shipping costs. Made things come tax time so much easier.

[auctionjmm]

Originally Posted by KhalDrogo

Hopefully people have to sell to pay the bill!

They’re going to have a second panic attack when they realize they’re going to have to pay quarterly taxes too.

Nah. The penalty is negligible. I've been a business for 10 tax seasons now and have never paid the quarterly. The penalty is so small I don't care to bother with it.

[auctionjmm]

Originally Posted by Sprewell8

Why would anyone sell on ebay ever again if they are getting taxed on top like this? This is annoying. Yes, Im venting

You are only getting taxed on PROFIT. If you are smart enough to generate a profit on trading cards then you should have no problem paying a small tax on those profits. The alternative is not selling at all.

[BALxORIOLESx]

Due to the increase in the Sports Card Market (both number of people and prices of cards), a lot of people will be receiving a 1099-K form for the very first time (including myself) due to the sheer volume/size of some of the transactions that you occurred during 2020.

Luckily, with a degree in Finance, I was very prepared and had tracked everything I purchased (Sports Card Related - such as purchase date, purchase price, how much I paid for shipping on the purchase, tax paid on purchase, year of card, set, player name, team, card attributes, serial number, grade, cert number).

I also did this for any sales of Sports Cards (including any items I bought per above and then sold) - (sold price, sold date, fees paid on sale to PP and/or eBay, etc.)

I also did the same tracking/logging for purchases of supplies, equipment/furniture, memberships, etc.

Examples of supplies: top loaders, sleeves, boxes, shipping tape, bubble mailers.
Examples of equipment/furniture: safe, scanner, label makers, shelving units, any computer accessories/computers that you bought for the buying and selling of sports cards, etc.
Examples of memberships: this could be a membership to Sports Card Investor, any reference books/guides you bought, etc.

These are all expenses that you took on to operate the buying and selling of sports cards..

Anyways, with a pretty advanced background in using Microsoft Excel, I actually created my own Sport Card Data Tool. This was extremely helpful in ensuring I was organized and prepared for filing taxes, completing a Schedule C/1040, and much more.

So not only did this help me tremendously in getting my taxes done (already done with them), but it also provides me great insight/visuals into my Sports Card Data.

PS: In no way am I any sort of tax expert. Nor will this 100% help you file taxes. This is just simply something that can you get organized for preparing tax info.

[mjohnatgt]

Originally Posted by auctionjmm

You are only getting taxed on PROFIT. If you are smart enough to generate a profit on trading cards then you should have no problem paying a small tax on those profits. The alternative is not selling at all.

Show your work. In what cases in IRS tax law are you taxed on your HOBBY profit? That was the case in 2017 and before, but it changed.

[mjohnatgt]

Originally Posted by BALxORIOLESx

Due to the increase in the Sports Card Market (both number of people and prices of cards), a lot of people will be receiving a 1099-K form for the very first time (including myself) due to the sheer volume/size of some of the transactions that you occurred during 2020.

Thanks for your spam message. The word is "incurred." You might get some bites in the Buy/Sell/Trade section.

[BALxORIOLESx]

Originally Posted by mjohnatgt

Thanks for your spam message. The word is "incurred." You might get some bites in the Buy/Sell/Trade section.

Not sure how offering some help to the community is spam. I already have a thread in the MISC B/S/T about my tool... which has been valid for 6+ months. So, simply telling them to go there for more info and offering a way to organize Sports Card Data is not spam.

Occurred or incurred both work in this sentence.

[tribefan26]

Originally Posted by coachnip13

It has been posted a few times in this thread. There are specific questions and qualifications that point you toward being either a business or a hobby.

But the hobby section is designed to keep people from reporting a loss on schedule C year after year if they don't operate a business as a business with an expectation of making a profit.

There has never been a section that says if you make money and it is a hobby it is not income. Whether you represent that as a business and report on Schedule C or report the profit as miscellaneous income is a matter of records and ease. (You may also use Schedule D and report as capital gains in some circumstances. )

The miscellaneous deduction for expense that used to be available to offset this profit was not a "hobby"deduction, it was a deduction for expenses used to produce income. It was only available if you itemized deductions and only to the extent that total misc expenses exceeded 2% of gross income, so it was very limited.

[BALxORIOLESx]

Originally Posted by BALxORIOLESx

LMAO. There's always one salty person. Not sure how offering some help to the community is spam. I already have a thread in the MISC B/S/T about my tool... which has been valid for 6+ months. So, simply telling them to go there for more info and offering a way to organize Sports Card Data is not spam. Thanks though.

Occurred or incurred both work in this sentence.

Not to mention, I literally typed all of the information above the first sight of bold wording just now. So that is not spam. The bold and below is a template that I have (which just goes hand in hand with working smarter and not harder).

[monkeymcgee]

Originally Posted by BALxORIOLESx

LMAO. There's always one salty person. Not sure how offering some help to the community is spam. I already have a thread in the MISC B/S/T about my tool... which has been valid for 6+ months. So, simply telling them to go there for more info and offering a way to organize Sports Card Data is not spam. Thanks though.

Occurred or incurred both work in this sentence.

You came in hawking a $50-100 Excel file (saved people a click) when you are not a tax expert. That is spam. This will not help you if you have hobby income.

[BALxORIOLESx]

Originally Posted by monkeymcgee

You came in hawking a $50-100 Excel file (saved people a click) when you are not a tax expert. That is spam. This will not help you if you have hobby income.

Not sure how tracking your purchases, sales, supplies bought, shipping costs, fee costs, etc. does not help you if you have hobby income and need to file that on taxes. If you read through the other comments in this thread, people are literally telling others to track everything. And that is what you are doing here.

Anyways, what I did is not against the forum rules.