The IRS delays the $600 eBay/Paypal taxation limit...

[Ischgl99]

I disagree. It does make sense. It's the logical conclusion to "income" tax. There are people who run a full-time business of selling on eBay, all the way down to me maybe selling $500 worth of stuff over a decade. At what point do you make the cut from "income" to "just clearing out the barn"? The IRS is already all up in your business, so why is a $600 cut-off any less valid that $6,000 or $60,000? Why shouldn't I be forced to report the $125 I made off of selling some shell mills over the past week, when I'm forced to become an account next April 14th?

The same applies to local governments shutting down children's lemonade stands (which has happened), because they don't have a valid business license. It's dumb. But, it makes complete sense from a robotic enforcement of the law perspective.

$600 is ridiculous because no profitable business has sales that low, leaving it at the $5,000 level that they plan for 2024 is much more realistic. The GAO estimated 30 million new 1099s would be sent out this year, this is capturing millions of people selling personal items that they are now going to have to remember, and document, what the items cost so they can deduct it on their income taxes. It is a paperwork burden that will not significantly increase revenue for the government at that lower level.

 

[Dhal22]

Haha! So the cutoff isn't logical. It's practical.
When do you stop squeezing the fruit? When it cost me more to squeeze harder than the juice I get.

Laffer curve….

 

[ArmyDoc]

I disagree. It does make sense. It's the logical conclusion to "income" tax. There are people who run a full-time business of selling on eBay, all the way down to me maybe selling $500 worth of stuff over a decade. At what point do you make the cut from "income" to "just clearing out the barn"? The IRS is already all up in your business, so why is a $600 cut-off any less valid that $6,000 or $60,000? Why shouldn't I be forced to report the $125 I made off of selling some shell mills over the past week, when I'm forced to become an account next April 14th?

I dont mind reporting the income from stuff I sell on ebay, what I object to is the assumption that it is income.
Every thing I sell on Ebay is sold at less than I paid for it. That means I'm losing money. How is this income? I know other people buy used stuff, and sell it for more. Fine, they should tally up their sales and subtract their expenses, and pay income tax on the difference.
If ebay reports $1000 of sales for me, and I tally up the original cost of the items sold as being $10,000, is the IRS going to give me a refund?

 

[stupoty]

I dont mind reporting the income from stuff I sell on ebay, what I object to is the assumption that it is income.
Every thing I sell on Ebay is sold at less than I paid for it. That means I'm losing money. How is this income? I know other people buy used stuff, and sell it for more. Fine, they should tally up their sales and subtract their expenses, and pay income tax on the difference.
If ebay reports $1000 of sales for me, and I tally up the original cost of the items sold as being $10,000, is the IRS going to give me a refund?

I often use ebay to decide if things should be thrown away , that odd doodad that you can't quite get rid of.

List it on ebay for £2 or similar and if it hasn't sold after a couple of weeks, then the world has given you an answer

Stu

 

[Ischgl99]

If ebay reports $1000 of sales for me, and I tally up the original cost of the items sold as being $10,000, is the IRS going to give me a refund?

Unfortunately no, you are only able to deduct a loss as a business. If I could deduct personal items sold at a loss, I would sell everything I didn’t want online at a cheap price and take the deduction, that is probably why they don’t allow it.

 

[mattthemuppet2]

It's a lot cheaper for the IRS to go after the little people than the big people, as the big people have lots of tax lawyers. That's why most wealthy people pay a much lower rate of tax than the people who work for them

 

[ddickey]

Huh?

 

[Beckerkumm]

Not even close to true. Of the top 1% wealthiest people, 80% are self made first or early second gen earners. They pay almost 50% of all income tax so no way the math works that they pay less than the middle class. A few who rely entirely on qualified dividends might pay only 24% federal but that is a small group.

The $600 reporting thing is just stupid though.

Dave

 

[Jake P]

Some interesting arguments on both sides here. There is something we should all be considering as it seems we may be getting close to the day when our monetary systems will be transitioned to digital only currency systems.

This is something that central banks and governments intensely desire. Should this come to pass, the individual won’t be able to sell an old pair of shoes in a garage sale without that transaction being potentially taxed. Once cash is taken out of circulation and all transactions in local currencies are through the respective central bank digital currency system (Fedcoin?) there will be no limits to what will be taxable.

And that’s just one aspect of control such a system could place on its society. I only bring this up because I wonder how many people are even aware of what is in the works.

 

[Nesse1]

Some interesting arguments on both sides here. There is something we should all be considering as it seems we may be getting close to the day when our monetary systems will be transitioned to digital only currency systems.

This is something that central banks and governments intensely desire. Should this come to pass, the individual won’t be able to sell an old pair of shoes in a garage sale without that transaction being potentially taxed. Once cash is taken out of circulation and all transactions in local currencies are through the respective central bank digital currency system (Fedcoin?) there will be no limits to what will be taxable.

And that’s just one aspect of control such a system could place on its society. I only bring this up because I wonder how many people are even aware of what is in the works.

I'm glad to report that I'll be dead before this becomes a reality!

On the other hand, when waiting in line to check out at Costco, I find it quite irritating when someone pulls out cash, and even worse, their coin purse, when paying! Get with the program, man!