Ebay tax reporting drops from $20,000 to $600

[53toppscollector]

I think the ideal solution here is simply to have ebay take out a portion of the final sale price to offset the tax that we'd ultimately have to pay and let ebay pay the government.

If I sell an item for $50, and ebay takes their 13% in fees, then takes 10% in what I'd typically have to pay as a gains tax, then at least I know that when I sell something, I get 77% of the hammer price, and thats my money and I don't have to worry about being taxed on it later. Then I can figure out what my minimum sale price should be.

What I am curious about is how auction houses handle the taxes now. I've never sold through Heritage or Mile High or Goldin. If you consign with them, do you get a 1099 form? Or do they pay the tax to the government? It seems like they have moved toward direct depositing the proceeds into bank accounts, so since there is no paypal in the middle, how does that work? I've heard that is how Probstein does it too. So if you send Probstein a bunch of stuff and they list it on ebay and it sells for $1000, they take out their cut and you get the rest, but do you get a 1099 in that case? I can't imagine how that would work.

[hockeyhockey]

the 1099 portion of this is a question i hear a lot from people who are casual sellers. and i'm far from a tax expert (and haven't read far into this thread), but maybe bob c can answer this:

with regards to the 1099, are people paying for the total amount collected on the cards, or is the amount you paid for the card taken into consideration?

sorry if this was answered already.

[Gorditadogg]

Originally Posted by hockeyhockey

the 1099 portion of this is a question i hear a lot from people who are casual sellers. and i'm far from a tax expert (and haven't read far into this thread), but maybe bob c can answer this:



with regards to the 1099, are people paying for the total amount collected on the cards, or is the amount you paid for the card taken into consideration?



sorry if this was answered already.

You subtract the cost of the card and all your expenses connected with selling it.

Sent from my SM-G955U using Tapatalk

[BobC]

Originally Posted by hockeyhockey

the 1099 portion of this is a question i hear a lot from people who are casual sellers. and i'm far from a tax expert (and haven't read far into this thread), but maybe bob c can answer this:

with regards to the 1099, are people paying for the total amount collected on the cards, or is the amount you paid for the card taken into consideration?

sorry if this was answered already.

Quick answer, you are only supposed to pay taxes on the NET taxable income or NET capital gains, after deducting applicable expenses and the cost of items sold, from your gross sales amounts. The 1099s only report gross sales, not net taxable income or gain.

And yes, this was also addressed earlier in this thread. Do go back and read through the thread.

[BobC]

Originally Posted by 53toppscollector

I think the ideal solution here is simply to have ebay take out a portion of the final sale price to offset the tax that we'd ultimately have to pay and let ebay pay the government.

If I sell an item for $50, and ebay takes their 13% in fees, then takes 10% in what I'd typically have to pay as a gains tax, then at least I know that when I sell something, I get 77% of the hammer price, and thats my money and I don't have to worry about being taxed on it later. Then I can figure out what my minimum sale price should be.

What I am curious about is how auction houses handle the taxes now. I've never sold through Heritage or Mile High or Goldin. If you consign with them, do you get a 1099 form? Or do they pay the tax to the government? It seems like they have moved toward direct depositing the proceeds into bank accounts, so since there is no paypal in the middle, how does that work? I've heard that is how Probstein does it too. So if you send Probstein a bunch of stuff and they list it on ebay and it sells for $1000, they take out their cut and you get the rest, but do you get a 1099 in that case? I can't imagine how that would work.

Great, then the guy that bought a T206 Wagner for $500,000 twenty-five years ago would definitely be happy to sell it on Ebay today. If he now gets $1,500,000 for it, Ebay takes 10% ($150,000), and sends it to Uncle Sam. Meanwhile, the seller's actual profit on the card was $1,000,000, which if that full amount was subject to the maximum federal cap gains tax rate of 28%, it means he actually should have owed $280,000 in federal taxes, so your idea may have just saved the seller $130,000. Of course, it also just means the rest of us federal taxpayers have to use $130,000 of our tax payments to make up for the shortfall. Oh, and what about state and local taxes on the seller, or is Ebay going to somehow take care of that as well?

James, not trying to put your question/idea down, just demonstrating how impossibly hard it might be to have such a concept work and not always equitably satisfy everyone involved.

Your question in paragraph #3 has already been addressed in earlier posts in this thread. You can go back and look.