Taxachusetts and Paypal, guess what, you are getting a 1099-K.

[GreginNH1]

Originally Posted by For The Love of Music

Really a matter of time before this and internet sales takes affect - too many dollars being generated without a cut

I’m afraid you are correct. Imagine the annual gross transactions on Ebay and the 1099s it would generate.

[Masterlu]

Originally Posted by GreginNH1

I’m afraid you are correct. Imagine the annual gross transactions on Ebay and the 1099s it would generate.

It would be a nightmare for both sides. Say you have owned something for many years; then you sell it on eBay. The proceeds would not be taxable; unless it can be established you sold it for a profit (ie: long term/short term capital gains)

Otherwise, it would be a non taxable event. The red tape would be unimaginable.

[GreginNH1]

Originally Posted by Masterlu

It would be a nightmare for both sides. Say you have owned something for many years; then you sell it on eBay. The proceeds would not be taxable; unless it can be established you sold it for a profit (ie: long term/short term capital gains)

Otherwise, it would be a non taxable event. The red tape would be unimaginable.

Exactly what the IRS would love. Increased burden on the taxpayer to substantiate basis, loss or gain - failing which the IRS simply assesses a tax on the entire 1099 amount.

[Masterlu]

Originally Posted by GreginNH1

Exactly what the IRS would love. Increased burden on the taxpayer to substantiate basis, loss or gain - failing which the IRS simply assesses a tax on the entire 1099 amount.

I’ll tell you one thing; eBay stock would be crushed (even worse than today)

[dolsey01]

Originally Posted by Masterlu

It would be a nightmare for both sides. Say you have owned something for many years; then you sell it on eBay. The proceeds would not be taxable; unless it can be established you sold it for a profit (ie: long term/short term capital gains)

Otherwise, it would be a non taxable event. The red tape would be unimaginable.

The other consideration, did you pay Sales Tax on the item that you sold? Technically you should have paid the state even if you weren't charged sales tax when purchasing so if audited, you may owe MA the 6.25% sales tax on the item you just sold and the 5.1% income tax on the profit. So even if you sell it for a loss, you could still technically have to pay the sales tax if audited if I am thinking correctly.

I'm thinking I'm going to file my Federal return with a Schedule C to account for Cost of Good Sold to offset my amount owed since I lost money, but just pay the State their $100 a be done with it. I"m going to wait to submit my amended returns and see how this shakes out.

[Masterlu]

Originally Posted by dolsey01

The other consideration, did you pay Sales Tax on the item that you sold? Technically you should have paid the state even if you weren't charged sales tax when purchasing so if audited, you may owe MA the 6.25% sales tax on the item you just sold and the 5.1% income tax on the profit. So even if you sell it for a loss, you could still technically have to pay the sales tax if audited if I am thinking correctly.

I'm thinking I'm going to file my Federal return with a Schedule C to account for Cost of Good Sold to offset my amount owed since I lost money, but just pay the State their $100 a be done with it. I"m going to wait to submit my amended returns and see how this shakes out.

Not if sold out of state.

[62caddy]

Originally Posted by Masterlu

It would be a nightmare for both sides. Say you have owned something for many years; then you sell it on eBay. The proceeds would not be taxable; unless it can be established you sold it for a profit (ie: long term/short term capital gains)

Otherwise, it would be a non taxable event. The red tape would be unimaginable.

My thoughts exactly.

Also, is PayPal sending 1099 info to the IRS/ Mass Dept of Revenue - or simply sending 1099s out to its account holders?

How can can a governmental entity be informed without the account holder's SSN?

[Masterlu]

Originally Posted by 62caddy

My thoughts exactly.

Also, is PayPal sending 1099 info to the IRS/ Mass Dept of Revenue - or simply sending 1099s out to its account holders?

How can can a governmental entity be informed without the account holder's SSN?

PayPal requires the SSN if you surpass a certain plateau of sales.

[Cohibaman]

Originally Posted by Masterlu

PayPal requires the SSN if you surpass a certain plateau of sales.

Just what I want, another on-line entity to have my bank account, credit card number, address, favorite ice cream flavor, favorite bourbon, and my damn SS for hackers. Uggg

[62caddy]

Originally Posted by Masterlu

PayPal requires the SSN if you surpass a certain plateau of sales.

Yup I just verified it. $20,000 in sales annually is the threshold.