OT: Anyone get their 1099 from paypal yet?

[Runscott]

I just got an email from them, asking for my tax i.d.

I'm wondering - what if you sold off $30K worth of stuff you've had for years (maybe your comic books from childhood, junk, etc.). If you are going to reference this Paypal 1099 in your tax return, how do you offset that $30K that's not legitimately part of any business? Or do you just have to pay full taxes on it?

[Leon]

Originally Posted by Runscott

I just got an email from them, asking for my tax i.d.

I'm wondering - what if you sold off $30K worth of stuff you've had for years (maybe your comic books from childhood, junk, etc.). If you are going to reference this Paypal 1099 in your tax return, how do you offset that $30K that's not legitimately part of any business? Or do you just have to pay full taxes on it?

You either show and be able to prove your cost basis (to get your gains) or you pay the whole thing as income/capital gains. So if your comics cost $100 and you sold them for 30k, your profit (check to see if it's long term capital gains as that probably have a different tax rate) would be $29,900. I am getting 1099s out the wazoo for things I have done......it's all good I guess. I think that is the gist of it but please consult someone who knows more than I do.

[tonyo]

I'm no where near selling that much, but if the day ever comes when I do sell and all my collection sell in one year, and I get a 1099 from paypal, what types of records for cost basis (to show that I made practically no profit) are acceptable?

[ValKehl]

Tony - Having been an accountant (but, not a tax accountant) for my career (am now retired), it has always been second nature to me to save copies of cancelled checks as well as invoices from auction houses, TPGs, mail order dealers, eBay, etc.
Val

[e107collector]

Originally Posted by ValKehl

Tony - Having been an accountant (but, not a tax accountant) for my career (am now retired), it has always been second nature to me to save copies of cancelled checks as well as invoices from auction houses, TPGs, mail order dealers, eBay, etc.
Val

You can always make up the cost basis, and hope you don't get audited

Tony

[tonyo]

I suppose if I keep enough receipts from ebay and auction houses, that my records (emails) for transactions from net 54 BST will be believable enough, or is that too naive?

[Runscott]

Thanks for the insights. I don't know that I hit the requirements for 2011, but I sure hope not - I was completely in a 'hobby' mindset for several hobby buy/sell transactions, and was never concerned about having to prove it later. I do wonder how most of the ebayers just trying to supplement unemployment/retirement are going to deal with this.

If you think about it, $20,000 gross sales does not generally result in much profit - 15% profit is only $3,000. Taxes are much more than that.

[slidekellyslide]

I wonder how many 1099's hit the IRS this week from Paypal? It's got to be over 100,000.