[mattbslotracer]

If you go to Ebay, the new 1099 regulations will be in effect and once your total sales go over $600, you and the IRS will get a 1099 next Jan and you will pay income tax on the total with no deduction. for your expnses. You will end up paying about 15% to Ebay and around 15-20% to state and federal income tax next Jan. Kind of ruins Ebay for hobby sales.

 

[MrFlippant]

Sales of personal property don't fall under the income tax rule.

If you're buying stuff SPECIFICALLY to resell for profit, then it does, but if you're just selling something you bought and used and decided you no longer need, it does not.

 

[Cdub]

It isn't clear to me how you are supposed to prove that intent either way. EBay will be forced to report then income and a 1099 will be created. So, then what? Do you need receipts from the original purchase? What if you actually did come out ahead a little bit?

 

[mattbslotracer]

You can file as a S corp and small business, then you can deduct expense, but you pay income tax and self employment tax on profits, plus you still pay ebay on the full amount. The new 1099 requirement doesn't care what you are selling, they require any internet commerce or payment to send a 1099 for the total amount you sold or were paid if it over $600, thru any online payment, auction or sales service. I have checked this out and any research thru Google makes this clear There are no ebay sales that won't get reported once you go over $600. Income from these sales has always been taxable, it just never generated a 1099 till 2022. Luckily the IRS has decided to delay implementation for one year. Meaning sales in 2023 will be reported and you will pay tax next January.

 

[MrFlippant]

Sorry... I didn't mean to imply that a report would not be generated. But he doesn't have to report it as taxable income. I'm sure if Charles were audited as a result of not claiming that sale as taxable income that he would be able to dredge up proof of purchase for it. If he were to be doing that repeatedly in the same year, it might look a little hinky.

 

[mattbslotracer]

It doesn't matter what proof he has of cost, as a hobbyist, he cannot deduct the cost or expense, he must pay tax on the full sale amount. I have checked this with the IRS, they have a bulletin on this subject. Only as an S corp/small business can you deduct the expense of an item. What we think is common sense, doesn't mean anything to the IRS. If in doubt, research this on the internet. There is a lot of discussion about this, as it has stopped most hobby sellers from ebaying excess. This new requirement also means that if you get paid over $600 thru PP or any online payment sevice that will also generate a 1099 to the IRS. These 1099's require the amounts must be entered on the "other income" line. I wish I was wrong, but everything I've read and every person I have talked to say there is no way to bypass this.

 

[Charles R]

My understanding is the taxable aspect hasn't changed at all only the reporting aspect (1099 threshold).

A law requires online marketplaces to send out a Form 1099-K for sales of $600 or more. Most casual sellers will not owe taxes on the sales, but that’s not always clear.

https://www.nytimes.com/2022/09/30/your-money/online-marketplaces-1099-k.html

Say you sold a used piano on eBay for $1,000, but you paid $2,500 when you bought it new. “You don’t owe taxes,” Mr. Lautz said.

Under the new rule, however, eBay will send both you and the I.R.S. a Form 1099-K, showing you were paid $1,000. The company knows nothing about your initial purchase; it’s up to you to document the original price to show that no tax is owed.

 

[mattbslotracer]

You are right the taxable aspect has not changed, it is just that the IRS is now notified and the limits have changed. Until now you only reported the income, if you wanted to. The IRS was not informed unless you told them. I couldn't access the article, so I can't comment on that, I only know what I've read from the IRS. Take your chances, but it would be much better to know tax liabilities now than wait til next year.

 

[Charles R]

Updated the listing to include:

If you are wanting to run 2 lane analog I'll include the terminal block, controller "stations" and related wiring. With an additional terminal block should you want to wire four lanes.