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The taxman is probably going to end group breaks
Tromni |
Mar 10 2010, 12:23 PM
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Washington Team Collector
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From: Springfield VA
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Just FYI folks. The IRS will begin requiring services like paypal to report income received by members. You can see the relevant forms here: IRS FormSo while we're innocently using paypal to collect money and then spend it as a group, you're going to need really good documentation to prove that it wasn't income after all, but just a handy way of collecting money among friends. I'm not a tax preparer or lawyer or anything, so maybe this is less of an issue than I think. But it seems to me that the IRS will end up thinking group break organizers are under-reporting income.
PhotobucketBoyd Gordon Collection 55/102 (53.9%) [Total BV - $403.70, plus 3 unlisted] Particular Wants: Hockey: Ovechkin, Alex Semin, Nick Backstrom, Mike Green, Karl Alzner Football: Fred Davis, Devin Thomas, Malcom Kelly, Chris Cooley Baseball: Ryan Zimmerman, Jesus Flores Basketball: Caron Butler, Raymond Felton
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Tromni |
Mar 10 2010, 01:08 PM
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Washington Team Collector
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QUOTE(Derek4484 @ Mar 10 2010, 12:49 PM) Doesnt Surprise Me. Before you know it Paypal will have to send out 1099 Forms and up goes paypal fees.... That's exactly the proposal and form I posted. They'll have to report the income via 1099 to the IRS, then turn around and do the same for you. Presumably there won't be any tax-withholding by paypal for now, but who knows in the future.
PhotobucketBoyd Gordon Collection 55/102 (53.9%) [Total BV - $403.70, plus 3 unlisted] Particular Wants: Hockey: Ovechkin, Alex Semin, Nick Backstrom, Mike Green, Karl Alzner Football: Fred Davis, Devin Thomas, Malcom Kelly, Chris Cooley Baseball: Ryan Zimmerman, Jesus Flores Basketball: Caron Butler, Raymond Felton
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dodgerblue38501 |
Mar 10 2010, 02:09 PM
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GO GATORS !!!
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From: Mount Juliet, TN
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QUOTE(19th Century Indiana Jones @ Mar 10 2010, 12:18 PM) Next thing you know..... You win an auction for a $50 card at the beginning of the year. The player soars and so does his card prices. IRS gets their hands on a Beckett and Ebay sell prices during the heat of the next season. "Well, it looks like you've earned interest on your $50 investment. You'll have to report it as income....." We laugh at this scenario now but I am afraid this is closer to becoming a reality than we think.
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snowblink |
Mar 10 2010, 04:37 PM
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Not quite true, personal items sold are exempt from income tax reporting. It's when people are buying items for resale and not paying the taxes that they want to catch. If someone is selling bunches of items that they bought to resell, then yeah they should be paying taxes. Ultimately it's going to come down to this - does the IRS want everyone to incorporate? That way we can all write off expenses for things like food, clothes, entertainment, allowances paid to children, etc...and keep a balance sheet just for living, just like corporate entities do. Then you only get taxed on your profit. QUOTE(pavi39 @ Mar 10 2010, 11:36 AM) You certainly wouldn't if you took a loss on the clothes. But if you made a gain on those clothes you should be paying income tax on them. This kind of situation will be a nightmare.
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Tromni |
Mar 10 2010, 04:47 PM
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Washington Team Collector
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We currently are expected to report ebay-type income on gains. I buy a box for $100, sell the big hit inside for $500, I've got a gain and need to report it. Because there's no documentation, I don't have
Similarly, if I buy a box of cards and then sell the contents on ebay for half the price of the box, I've taken a loss and I have no reporting obligation. But if all the IRS sees is proof that I have $50 worth of income from paypal, I now need to document that i'm really taking a loss on a $100 box.
So this really strikes two major areas of the hobby: group breaks and flippers.
Flippers now need to majorly document their purchases, because they're going to show up having big chunks of paypal income from ebay sales. They're going to need to prove a loss was taken now instead of the simpler result of only keeping records on the boxes that they gained on.
Group breakers have the same problem, needing to document that they're collecting and transferring money, not gaining it as income.
Like pavi said, it's an absolute nightmare. I for one won't be hosting group breaks anymore beginning in 2011 as a result of this, just because the last thing I need is the expense and hassle of an audit.
PhotobucketBoyd Gordon Collection 55/102 (53.9%) [Total BV - $403.70, plus 3 unlisted] Particular Wants: Hockey: Ovechkin, Alex Semin, Nick Backstrom, Mike Green, Karl Alzner Football: Fred Davis, Devin Thomas, Malcom Kelly, Chris Cooley Baseball: Ryan Zimmerman, Jesus Flores Basketball: Caron Butler, Raymond Felton
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mwolosik |
Mar 10 2010, 09:01 PM
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Mat
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Is this definitely happening or is it just talk by the IRS to scare everyone to make money. That would mean no one would probably want to sell on the bay. Also when is this supposed to go in affect if they pass it.
Lookiing for Penguins and Steelers that I need and whatever catches my eye. Will send in bubble mailers with DC and would appreciate the same. I trade by book value-- that other place ebay, thats where sell value belongs. Check my photobucket http://s251.photobucket.com/home/mwolosik
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beanschat |
Mar 10 2010, 09:33 PM
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Mr. Donruss Classics
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QUOTE(19th Century Indiana Jones @ Mar 10 2010, 01:18 PM) Next thing you know..... You win an auction for a $50 card at the beginning of the year. The player soars and so does his card prices. IRS gets their hands on a Beckett and Ebay sell prices during the heat of the next season. "Well, it looks like you've earned interest on your $50 investment. You'll have to report it as income....." They won't go by ebay prices...they'll go by full book!
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Gforce083 |
Mar 11 2010, 12:55 AM
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HOF
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QUOTE(pavi39 @ Mar 10 2010, 09:40 PM) It is already passed, and I believe it is supposed to start in 2011. They will also require all credit card companies to send their customers a record of how much they have received through credit card sales. wow, so when 2011 hits there goes my collection. My group breaks are how I've been able to add so much to my collection! There's now way I'd be able to bust that many boxes on my own without doing them group break style. It will be a sad day! Guess I gotta make 2010 a non-stop group break party!!!!
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