PayPal Issuing 1099-K for Some Online T***sactions: Here's a posting from PayPal..... a hassle in the making..... What's not 100% clear is whether it's t***saction specific or...

47greyfox Loc: on the edge of the Colorado front range

Here's a posting from PayPal..... a hassle in the making.....
What's not 100% clear is whether it's t***saction specific or cumulative...
Nor is it specific what you have to do. For example, say you sell used camera equipment to a private party or KEH or MPB, etc..... And the amount received is greater than the $600 magic number but still reflects a loss from your original price paid. What's the process to avoid an IRS interaction. And, making matters worse, what if you bought the equipment from someone off of Craigslist and don't have a bill of sale? Or consider, you buy from a private party and pay using PayPal or another similar service and the amount exceeds $600? In the article, there's a second link to an IRS page (see below) .... read that for more....

https://newsroom.paypal-corp.com/2021-11-04-New-US-Tax-Reporting-Requirements-Your-Questions-Answered

https://www.irs.gov/businesses/understanding-your-form-1099-k

Longshadow Loc: Audubon, PA, United States

Well, a 1099-MISC is normally issued cumulative for the year if over $600 total for the year.
So I would anticipate that the 1099-K would be the same (is over $600 for 2022, not sure about 2021).

47greyfox Loc: on the edge of the Colorado front range

Longshadow wrote:

Well, a 1099-MISC is normally issued cumulative for the year if over $600 total for the year.
So I would anticipate that the 1099-K would be the same (is over $600 for 2022, not sure about 2021).

According to the IRS notice... above
In settlement of third-party payment network t***sactions above the minimum reporting thresholds as follows:

For returns for calendar years prior to 2022:
Gross payments that exceed $20,000, AND
More than 200 such t***sactions

For returns for calendar years after 2021:
Gross payments that exceed $600, AND
Any number of t***sactions

Also (and I don't know what difference it makes), the IRS notice is to "Businesses and Self-Employed." So, does that mean that any sale PayPal is a third party to that includes a business, PayPal will issue a 1099-K?

There's currently in the Marketplace/Classified a posting that offers up for sale a Sony a9 body. The seller is stipulating that if a buyer purchases with PayPal that he/she uses the "friends and family" provision.

Longshadow Loc: Audubon, PA, United States

47greyfox wrote:

According to the IRS notice... above br In settlem... (show quote)

One would think that for the 1099-K it would not be based on who, simply a value of over $600 to anyone.
I would imagine that a business would have to match to any and all 1099-K amounts as part of their income. For 2022 they are trying to include everyone. Kinda trying to capture some revenue from the "underground economy".

47greyfox Loc: on the edge of the Colorado front range

Longshadow wrote:

One would think that for the 1099-K it would not be based on who, simply a value of over $600 to anyone.
I would imagine that a business would have to match to any and all 1099-K amounts as part of their income. For 2022 they are trying to include everyone. Kinda trying to capture some revenue from the "underground economy".

For most t***sactions when I'm buying something from a vendor, I'm paying use taxes and don't think anything of it. My bigger concern is selling a greater than $600 item to someone like KEH 'or' selling an item, for example, on UHH Classified where use taxes aren't collected or worse yet, does PayPal send me a 1099-K because I have income from a sale.

Longshadow Loc: Audubon, PA, United States

47greyfox wrote:

For most t***sactions when I'm buying something from a vendor, I'm paying use taxes and don't think anything of it. My bigger concern is selling a greater than $600 item to someone like KEH 'or' selling an item, for example, on UHH Classified where use taxes aren't collected or worse yet, does PayPal send me a 1099-K because I have income from a sale.

I think they (Pay-Pal, et. al.) are now supposed to issue 1099-Ks. I don't sell like that, so I'm not really following it as it does not pertain to me. KEH may give you a 1099-MISC for what they buy from you, not sure. But 1099-MISC are usually issued for payments made for services, at least.
Regarding you buying something from a vendor, they are supposed to report that in their income statement. You don't have to issue anything that you bought something from them. Just like groceries, Best buy, etc.
Best to check with your accountant to get the correct answer(s) and a better understanding of it all.

Canisdirus

It's the new administration...the IRS is in maximum hoover vacuum mode.

Longshadow Loc: Audubon, PA, United States

Canisdirus wrote:

It's the new administration...the IRS is in maximum hoover vacuum mode.

Canisdirus

Longshadow wrote:

Not to worry...the government isn't known to waste money.

(cough)

BebuLamar

So if I sell something for $1000 on Ebay the IRS would consider that I have the $1000 income unless I can prove that I paid for it some how?

47greyfox Loc: on the edge of the Colorado front range

BebuLamar wrote:

So if I sell something for $1000 on Ebay the IRS would consider that I have the $1000 income unless I can prove that I paid for it some how?

That's the part that I'm trying to understand... If I sell something here for less than what I originally paid and I don't have a bill of sale or receipt from when I bought it, do I have a problem....

Longshadow Loc: Audubon, PA, United States

Canisdirus wrote:

Not to worry...the government isn't known to waste money.

(cough)

Longshadow Loc: Audubon, PA, United States

47greyfox wrote:

That's the part that I'm trying to understand... If I sell something here for less than what I originally paid and I don't have a bill of sale or receipt from when I bought it, do I have a problem....

Best to check with your accountant.....

Canisdirus

Here is the skinny and it is RIDICULOUS.

This is a hidden vat tax on the middle class...anytime you bump over 600 bucks online...the IRS expects a 1099 from now on.
It's a new tax world...and this is just the beginning.

The govt. is now eating at both ends of your dining room table. Enjoy their company.

47greyfox Loc: on the edge of the Colorado front range

Canisdirus wrote:

Here is the skinny and it is RIDICULOUS.

This is a hidden vat tax on the middle class...anytime you bump over 600 bucks online...the IRS expects a 1099 from now on.
It's a new tax world...and this is just the beginning.

The govt. is now eating at both ends of your dining room table. Enjoy their company.

Changing of the threshold reporting requirements was a quiet provision of the American Rescue Plan Act of 2021. Funny how we never heard of it until the last month or so.