Just an FYI Pay Pal and 1099's

FloriduhBoy

Site Supporter
Site Supporter
Pay Pal will be sending the IRS information on all transactions over $600. :mad: I don't know if that applies to Friends and Family transactions. Below is a screenshot from my PP account. I do not have a PP business account. I don't know if there is a threshold that triggers actually being taxed, but it appears that you could be. eBay sellers will receive 1099's if they sell more than $20K a year. PP.JPG
 
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Fran604g

Just Call Me Junior
Site Supporter
I've been wondering about this. I've sold a product I manufactured for antique phonograph collectors, but at a break-even price point. Still, I consider this to have been a one-off event not worthy of the whole P&L routine.
 

FloriduhBoy

Site Supporter
Site Supporter
Yeah, this is uncharted territory. I clicked on the boxes and don't have any 1099's for 2021. 2022 may be different, being taxed as a private seller of used gear....:mad:
 
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My only surprise is that this hasn't happened sooner. There has to be a huge amount of unreported income generated via eBay sales. Is it unreasonable for the IRS to try to get rogue sellers to play by the same rules as everybody else?

Time will tell how these new IRS tools will impact the eBay marketplace. The days of pocketing a few grand tax free for selling that pair of Tannoys you got at a garage sale for a few dollars may be over. High volume sellers or high priced items are likely to get the greatest scrutiny. Casual sellers of low ticket items will likely get almost no scrutiny. Sellers in between will have to navigate around those $600 and $20,000 icebergs.
 
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Given the announcements that they are so understaffed, I think that they will only bother those with material amounts in their 1099. It still is rather annoying. What if you are selling something you bought in 1977 and have no proof of what you paid and possibly even no recollection of what you paid. Selling personal property should have a pretty big exemption if you are not doing it as a business.
 

Fran604g

Just Call Me Junior
Site Supporter
Given the announcements that they are so understaffed, I think that they will only bother those with material amounts in their 1099. It still is rather annoying. What if you are selling something you bought in 1977 and have no proof of what you paid and possibly even no recollection of what you paid. Selling personal property should have a pretty big exemption if you are not doing it as a business.
Agreed.
 

PJ62

Junior Member
Yeah, we just put my mother-in-law in a nursing home, she had a huge book collection with a few first editions from the 40s and 50s. I just sold three of her books on eBay last month for close to $1000, which I used to help pay for her expenses. Now I have to declare that and pay taxes on it?? What a load of crap. :confused:
 

FloriduhBoy

Site Supporter
Site Supporter
Yeah, we just put my mother-in-law in a nursing home, she had a huge book collection with a few first editions from the 40s and 50s. I just sold three of her books on eBay last month for close to $1000, which I used to help pay for her expenses. Now I have to declare that and pay taxes on it?? What a load of crap. :confused:
I'm not sure if this applies to last year's transactions. I have no 1099's in PayPal from 2021. Have you deciphered the new ebay sellers section?
 

PJ62

Junior Member
Yeah, but I'm still screwed. I went to eBay and looked at their explanation of 1099s and it says that certain states have lower minimum requirements than the Feds require. I live in Illinois, and guess what, they have lower minimum requirements. And if eBay has to kick out a 1099 for the state, it will send a copy to the Feds. So it looks like I WILL be getting a 1099 and have to report it now on both my state and Federal tax forms. :mad:
 

prime minister

Site Owner
Staff member
Yeah, but I'm still screwed. I went to eBay and looked at their explanation of 1099s and it says that certain states have lower minimum requirements than the Feds require. I live in Illinois, and guess what, they have lower minimum requirements. And if eBay has to kick out 1099 for the state, it will send a copy to the Feds. So it looks like I WILL be getting a 1099 and have to report it now on both my state and Federal tax forms. :mad:
Congratulations!
 
I've been getting 1099's from Ebay and Paypal for years. My wife sells crystal and dinnerware and it all gets taxed. The nice part is we are usually able to write off most of what she makes with her office, storage, mileage, supplies and internet.
 

FloriduhBoy

Site Supporter
Site Supporter
I've been getting 1099's from Ebay and Paypal for years. My wife sells crystal and dinnerware and it all gets taxed. The nice part is we are usually able to write off most of what she makes with her office, storage, mileage, supplies and internet.
But she has a business. We who sell a few things a year don't.
 
As long as it's reasonable to assume that you sold something for less than you paid for it you won't owe any taxes on it. Tax people understand the theory of capital gains. Declare it on your taxes as a hobby. As long as you don't make a "profit" in more than two of five consecutive years you can consider it hobby income.
 
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