# PayPal and 1099 that they will issue starting this year



## Barmoley (Jan 10, 2022)

I am sure we have some CPAs in the room. Since, starting this year PayPal will issue 1099 tax forms after one goes over $600 how do we make sure the knives we sell don't get hit with income tax? It is one thing if you can show how much you paid for the knife and that you lost money on the sale, but what if it was a trade or you paid using f&f, venmo, cash whatever. You wouldn't want the whole amount of the sale to be considered as profit. For makers or dealers it is different as they have a business where they can show costs that went into making or acquiring the sold knife, but what about hobbyist that buy and sell on occasion?


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## Wdestate (Jan 10, 2022)

My state (mass) started doing this years ago got hit with a big one in 2018. Haven't sold any knives since . Would be very interested in this answer as well because I'd like to unload like 30 of them but not get totally screwed in the process since I don't have all the documentation from buying them.


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## tostadas (Jan 10, 2022)

This is going to be annoying


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## Barmoley (Jan 10, 2022)

Annoying is one thing. Paying income tax at your tax rate on a 1k knife you originally paid 1.2k for but used f&f so can't prove it is a totally different problem.


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## AT5760 (Jan 10, 2022)

***Not legal or tax advice*** Generally, if you sell an item at a loss, then income generated isn’t included in your gross income for tax purposes. This isn’t going to be a big deal for most folks that use PayPal. I expect TurboTax will update its software to address this and your CPA will breeze through this issue.


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## Brian Weekley (Jan 10, 2022)

A tax increase by any other name.


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## ethompson (Jan 10, 2022)

Knock the handle off and sell the handle and knife separately for $599 each. Man I love those Shig ho handles, I'd probably pay $599 for one if I found a kitaeji 270 gyuto that fit it perfectly. Wouldn't pay more than $599 for the blade though.

*edit - this is not advice, please don't do this and blame me
**unless of course you have a 270 kitaeji blade only (and handle!) that you're looking to move...


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## HumbleHomeCook (Jan 10, 2022)

AT5760 said:


> ***Not legal or tax advice*** Generally, if you sell an item at a loss, then income generated isn’t included in your gross income for tax purposes. This isn’t going to be a big deal for most folks that use PayPal. I expect TurboTax will update its software to address this and your CPA will breeze through this issue.



The problem is, you're going to have to have evidence of your purchase price to prove it was a loss and you're going to have to have that for up to seven years.

Any time taxes are involved, it should be a big deal.


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## HumbleHomeCook (Jan 10, 2022)

ethompson said:


> Knock the handle off and sell the handle and knife separately for $599 each. Man I love those Shig ho handles, I'd probably pay $599 for one if I found a kitaeji 270 gyuto that fit it perfectly. Wouldn't pay more than $599 for the blade though.
> 
> *edit - this is not advice, please don't do this and blame me
> **unless of course you have a 270 kitaeji blade only (and handle!) that you're looking to move...



As I recall the original post about this subject, it was cumulative not just singular sales. I may be wrong though.


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## ethompson (Jan 10, 2022)

I just looked into it further, and you are correct. That is rather annoying…


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## sansho (Jan 10, 2022)

does F&F going forward get around the issue? i mean specifically the tax issue. i had read that they only file G&S transactions, but idk if that's true.

2nd question: what about zelle/quickpay? or venmo? are those affected?


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## ModRQC (Jan 10, 2022)

Quick read: this concerns US taxpayers only... riiight?

F&F will not be taxed.

At the Internet era, how hard is it to keep your bills and track your transactions?

My only wonder is rather this: can they ask for proof that the item sold is REALLY the item you present a bill for? And what kind of proof would that be?

I'm guessing this might come to other countries as well following that great example. 

So yeah thanks governments. Don't do any serious efforts to stop fiscal evasion. But do HUNT DOWN simple folks with a hobby and a 45K$ income...

This... ****ing... world.


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## xxxclx (Jan 10, 2022)

New U.S. Tax Reporting Requirements: Your Questions Answered


How these new tax reporting changes may impact you when paying or accepting payments with PayPal and Venmo for goods and services.




newsroom.paypal-corp.com





Paypal's Q&A here is fairly concise and helpful


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## tostadas (Jan 10, 2022)

ModRQC said:


> Quick read: this concerns US taxpayers only... riiight?
> 
> F&F will not be taxed.
> 
> ...


It may not be required to file, but if you get audited, you will need to present the info


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## ModRQC (Jan 10, 2022)

tostadas said:


> It may not be required to file, but if you get audited, you will need to present the info



They did ping me about that form... think it was beginning of Fall or something. Been losing track of time these last months. They wanted me to fill the form. First questions were about US residency and such which was a negative. After a couple more questions of the same, I didn't have to fill the form obviously. Didn't ask any documentation about it neither. I guess the origin of my account with them, origins of my CC and bank account, and base currency, plus all the personal pedigree it requires to have an account in the first place was sufficient proof.

Probably been asked because of a couple transactions in and out with USD currency. Back in the winter of 2021 I accepted a few payments for BSTs in USD as to build up for my upcoming custom HSC///.


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## Qapla' (Jan 11, 2022)

ModRQC said:


> Quick read: this concerns US taxpayers only... riiight?


It was snuck into the "American Rescue Plan Act" law. (A consequence of "pass it so you can see what's in it" lawmaking here in the US.)


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## Delat (Jan 11, 2022)

So if you get audited and sold a Spare and a Isasmedjan for a total of $1500, then show them a receipt for your Tansu and Xerxes for $3000, do you think the IRS agent will say “oh h*ll no, you expect me to believe you sold a Xerxes and Tansu for under 2 grand total? Like you tipped them both or something! Ha!”. 

Joking aside, paypal transactions don’t even specify the exact knife unless you put in the comments, right? So how is the IRS even going to know exactly what knives you sold?


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## jedy617 (Jan 11, 2022)

That's why I made a stink in the post about not doing FF that admins posted. All my hobby related forums are switching to allowing FF/zelle/cashapp etc for established members. Not worth my time having to prove every purchase and sale that I didn't make a profit


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## ModRQC (Jan 11, 2022)

Delat said:


> So if you get audited and sold a Spare and a Isasmedjan for a total of $1500, then show them a receipt for your Tansu and Xerxes for $3000, do you think the IRS agent will say “oh h*ll no, you expect me to believe you sold a Xerxes and Tansu for under 2 grand total? Like you tipped them both or something! Ha!”.
> 
> Joking aside, paypal transactions don’t even specify the exact knife unless you put in the comments, right? So how is the IRS even going to know exactly what knives you sold?



Sensing a slight mockery in there I do fully agree. It's even part of my point, because there's a reverse to this: if you sell a Honyaki for 3K, will these guys believe it for a comment in the Paypal transaction, or would they rather think you've found a way to distribute some "pure" for the weight? I mean it will obviously come down to presenting a proof of purchase, but it's exactly your point that is mine: it's so much of a surprising, afficonados market where prices do not reflect the object... what CAN happen with these morons trying to regulate all Paypal transactions upon a basis of proofs? Unless they require: shipping bill with verifiable weight, date, that would match... what... a printscreen you'd make of yourt BST post and of the conversation with your buyer...

It's exactly the kind of **** I expect from governments... trying to get some additional money into things that will soon lead to humongous errors and totally false "targeting of suspect transactioning"?

Who was it on KKF that recently said he got billed in the hundred Ks for a misread or mislabelling of knife transaction value by the IRS?

This cannot end in a good way. And for what? Petty cash, my friends, petty cash. Nothing like the money that's been laundered on the US territory, or goes into fiscal evasion, even on a "small scale" of crookery.


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## Barmoley (Jan 11, 2022)

ModRQC said:


> Quick read: this concerns US taxpayers only... riiight?
> 
> F&F will not be taxed.
> 
> At the Internet era, how hard is it to keep your bills and track your transactions.



So ok one option is doing funny stuff like making up receipts or saying one knife is another.

I want to address how hard it is to track your transactions.

What if you traded knives and then sold? You ofcourse could show the receipt for the one you traded, but it is not really legit.

I pay f&f all the time, I bought most of the knives I have f&f so if I then sell it g&s what am I supposed to show for a receipt? That I sent some other amount to some person?
What of you bought a kato 10 years ago for $400 and sold it now for $800, you technically made $400 I'm profit so now you own tax on that.

In any case sounds like outside of doing some funny accounting we are screwed.


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## tostadas (Jan 11, 2022)

Barmoley said:


> So ok one option is doing funny stuff like making up receipts or saying one knife is another.
> 
> I want to address how hard it is to track your transactions.
> 
> ...


Yea in the hobby world, trades are gonna make this a mess. Say I bought 3 stones for 800, then trade 1 of those stones and another knife for a TF. Then trade that TF with some extra cash for a Raquin. Then sell the Raquin for 900. what the hell even is my actual profit?


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## ModRQC (Jan 11, 2022)

Barmoley said:


> So ok one option is doing funny stuff like making up receipts or saying one knife is another.
> 
> I want to address how hard it is to track your transactions.
> 
> ...



Hey man I'm not dismissing any of your concern. If you read my answers properly you can hear my own dismay even where I'm not concerned and really, if I wanted to be petty, could be glad because I sell a lot of my stuff to you US guys at a huge loss. I already spoken my mind about this: I'd wish BST to be more open-minded about the fact that a forum like KKF is international, but can't blame US based members for having a market to and fro that is advantageous in a big way compared to the risks of losing money or some hair in an international transaction. Just as much as I admit the fact I want a US customers base for my knives because my own national base is sparse. So these are the realities of life, but to me this 1099 form is a violation of good citizens against not adressing the real causes of why and how much is lost everyday because of ******** which I'm sad to report, there isn't a lack of in either mine or your country or any big country as far as I'm concerned. It seems the more political weight one country gets internationally, the more of a mess it is internally.

But far from the point... Easy to answer your last example: you bought a Kato for 400 and sell for 800? All the good to you. Pay your taxes and I don't think you have anything to complain about... unless you single-handedly bought all Katos since with all the crazy price inflation and shady vendors. In which case I guess you could present all of your bills to an atorney and try and make a case of it against the USA for being solely responsible of the inflation. I really think you could. There's been a lot of **** won in courts that should never have.

For the other examples it's a bit more convoluted but the gist of my answer would be: yes, why not? Keep a printscreen of the BST with the date, of the final agreement in PM with a date, with a bank proof of said transaction with a date. It isn't difficult to do. Even if you buy 350 knives a year and resell them only through BST, it's one a day and two weeks off. Nothing difficult to track.

But not any of what I just said, or what I'm replying to that you said, IS the point, is it? It's everything else I said. This is ********. This is only taxing those that are openly, dutifully going about their taxes in any respectable frame of mind that get to pay because some morrons realize they're losing money that is US made, but they cannot accuse their ****** lobbying friends of being single handedly responsible of a few millions a year, can they?


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## M1k3 (Jan 11, 2022)

What really sucks, if we were to meet in some sketchy parking lot and do the transaction, the IRS wouldn't bat an eye.


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## tostadas (Jan 11, 2022)

M1k3 said:


> What really sucks, if we were to meet in some sketchy parking lot and do the transaction, the IRS wouldn't bat an eye.


Cool, I'm down. Bring your Katos and make sure you aren't followed.


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## Greasylake (Jan 11, 2022)

From now on, I will be purchasing items with gold only and accepting payments in venison and other exotic meats. Back to the barter economy we go.


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## tostadas (Jan 11, 2022)

Greasylake said:


> From now on, I will be purchasing items with gold only and accepting payments in venison and other exotic meats. Back to the barter economy we go.


A place nearby actually offers that on their special menu


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## ModRQC (Jan 11, 2022)

Guys you don’t even need to. We’re being robbed of hundred Ks a day and the gist of it is presenting a legit face. Do your homework and break things down to the best equation.

Like I could ask you to send me a PM with only space bar action or dots and enters. Just as much as I need space. Then copy font and size of a PM into a fake buying PM. Same I could do with a BST. Then once upon a few sell a Kato for 1K and camouflage it into three knives I like and intend to keep some more than average weeks/months at aoss. How will these guys keep track? Either you mostly sell as it comes always losing a few bucks in the process, either you buy and sell like madmans and have the kind of inventory and flow to fake anything.

Especially with makers like S. Tanaka and Y. Tanaka and all that stuff. These guys go with the obvious. They will not pursue two « Hatsukokoro » sold two years apart from a single knife’s bill. If they ever go as deep into proving this in the first place. They cannot track any PM to start with at this scale. Tracking KKF BST in the real, and only KKF, and why wouldn’t you post stuff on Reddit just for some additional proofs…

This is mostly an act of inspiring fear and squeezing a few millions bucks more tax income a year out of those honest enough to already being losing ground with the less honest folks that tend to be your very three doors down neighbor with the new crazy car?


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## HSC /// Knives (Jan 11, 2022)

I like Zelle

Here in France and the EU I’m seeing much of the business is transacted by bank transfer via IBAN.... not so much retail however. Most things I’ve bought or paid here to vendors and services has been by IBAN bank transfer


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## Corradobrit1 (Jan 11, 2022)

HSC /// Knives said:


> Most things I’ve bought or paid here to vendors and services has been by IBAN bank transfer


True dat. Also in Germany


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## MarcelNL (Jan 11, 2022)

In my country the tax service has insight in private and business bank details anyway and banks need to transmit data to te tax service. Tax service can ask for detailed information at any time, and BTW; the US IRS gets information pushed to them when relevant too (according to some treaty). I'm sure PP needs to provide the same data over here, and will provide details upon request. It surprises me the IRS does not follow a similar strategy (yet).

In my local situation any proceeds from selling whatever becomes taxable income once the purpose of the transaction is 'business', the problem is there is a huge and very gray area between being a listed/registered business and doing some trading/selling off items you bought earlier which is causing headaches.
Luckily the tax service does not look into this too frequently (yet) but when they do the discussion will be around the intent....

A good friend of me is selling a huge amount of electronic parts (vintage tubes, capacitors etc) but all of it was bought over decades and in order to accommodate his audio hobby needs, some parts soared in price since he bought them, yet what he has left lying around and what he buys with the money he recoups/makes is probably worth so much that you can never call it a business (or it would have to be a business model with a huge sunk investment that works). Still, the day a tax inspector starts asking more than a few questions he'll be in trouble as the discussion is about the 'intent'.


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## Cliffkol (Jan 11, 2022)

AT5760 said:


> ***Not legal or tax advice*** Generally, if you sell an item at a loss, then income generated isn’t included in your gross income for tax purposes. This isn’t going to be a big deal for most folks that use PayPal. I expect TurboTax will update its software to address this and your CPA will breeze through this issue.


That is confusingly correct. You Must report gross income and show the gross amount received on your return. No problem subtracting cost to end up with a loss, but the gross income received has to be shown on the return. IRS requires gross income to be shown. They can/might/will match the 1099’s submitted to IRS by the payees and if that amount is not on your return they will send you a bill.


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## Barmoley (Jan 11, 2022)

Another problem with this, that might be relevant to some of you, is that if you do taxes jointly your significant other will now know the scale of your ailment


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## big_adventure (Jan 11, 2022)

Barmoley said:


> Another problem with this, that might be relevant to some of you, is that if you do taxes jointly your significant other will now know the scale of your ailment



Not if you don't let them see what they are signing.


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## big_adventure (Jan 11, 2022)

Just a quick point that probably applies to the majority of people on here: just claim expenses equal to whatever the hell you want to claim to offset the 1099. Unless you make a significant amount, there is a next-to-zero chance of being audited. And even then, all you would have to do is show a piece of paper, even one you wrote yourself, showing the expense. 

If this is your main livelihood, OK, different story, but if it is, well, you should have been claiming all of this already.

And if you are worried about the added value gained in turning around a knife that went up in value, well, I've got bad news for you: that was already taxable. But it was also pretty easy to avoid - and still will be. It's just an extra step.


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## Homechef (Jan 11, 2022)

Think about all the people who are recording mileage for tax purposes. Most keep their records in a notebook or excel file. Both are acceptable documentation to the IRS. They don't need time date stamped photos of your odometer every time you get in the car. It's been about 20 years, but during my brief stint in accounting the IRS mainly just wanted to see some documentation and if you managed to actually get them on the phone regarding something like this I found them to be quite helpful and not that scary!

My plan, not any legal advice, is a running excel list of knives I've bought and sold with their prices. I'll attach that list to my tax form demonstrating a net loss, result is no tax on sales, but also not allowed to deduct the loss against normal income (because this isn't a business operation).


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## Barmoley (Jan 11, 2022)

big_adventure said:


> Just a quick point that probably applies to the majority of people on here: just claim expenses equal to whatever the hell you want to claim to offset the 1099. Unless you make a significant amount, there is a next-to-zero chance of being audited. And even then, all you would have to do is show a piece of paper, even one you wrote yourself, showing the expense.
> 
> If this is your main livelihood, OK, different story, but if it is, well, you should have been claiming all of this already.
> 
> And if you are worried about the added value gained in turning around a knife that went up in value, well, I've got bad news for you: that was already taxable. But it was also pretty easy to avoid - and still will be. It's just an extra step.


I don't make money on knives, it is a hobby, so I expect to pay for the privilege. Just don't want to pay high tax on the nonexistent profit. I guess ultimately we won't know until someone gets audited and the auditor doesn't buy the self reported expenses. Problem for another day I suppose.


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## big_adventure (Jan 11, 2022)

Homechef said:


> Think about all the people who are recording mileage for tax purposes. Most keep their records in a notebook or excel file. Both are acceptable documentation to the IRS. They don't need time date stamped photos of your odometer every time you get in the car. It's been about 20 years, but during my brief stint in accounting the IRS mainly just wanted to see some documentation and if you managed to actually get them on the phone regarding something like this I found them to be quite helpful and not that scary!
> 
> My plan, not any legal advice, is a running excel list of knives I've bought and sold with their prices. I'll attach that list to my tax form demonstrating a net loss, result is no tax on sales, but also not allowed to deduct the loss against normal income (because this isn't a business operation).



You don't even send it in. You just indicate the numbers and you show the proof if the IRS gets bitchy. You don't send the IRS receipts for expenses or anything.


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## HumbleHomeCook (Jan 11, 2022)

Homechef said:


> Think about all the people who are recording mileage for tax purposes. Most keep their records in a notebook or excel file. Both are acceptable documentation to the IRS. They don't need time date stamped photos of your odometer every time you get in the car. It's been about 20 years, but during my brief stint in accounting the IRS mainly just wanted to see some documentation and if you managed to actually get them on the phone regarding something like this I found them to be quite helpful and not that scary!
> 
> My plan, not any legal advice, is a running excel list of knives I've bought and sold with their prices. I'll attach that list to my tax form demonstrating a net loss, result is no tax on sales, but also not allowed to deduct the loss against normal income (because this isn't a business operation).



The mere existence of the IRS is scary enough for me. But that's probably a topic best left to another day.


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## big_adventure (Jan 11, 2022)

Barmoley said:


> I don't make money on knives, it is a hobby, so I expect to pay for the privilege. Just don't want to pay high tax on the nonexistent profit. I guess ultimately we won't know until someone gets audited and the auditor doesn't buy the self reported expenses. Problem for another day I suppose.



Like I said, it's basically zero chance of being a problem. You just have to make sure you report the revenue from the 1099. Then simply indicate that your costs offset it. Donezo. There is, as stated, basically zero chance of getting audited and even if you do, there is basically zero chance of them denying that claim 4 years down the road. Finally, even if they DO decide you owe some tax, it's not criminal, you just pay it, perhaps with interest and maybe a max of 10% penalty. The key is just to report it.


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## MarcelNL (Jan 11, 2022)

Holy cow, I wish our tax service was still that naive...car mileage data is checked (if they want) against a.o. ANPR cam data..


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## Barmoley (Jan 11, 2022)

big_adventure said:


> Like I said, it's basically zero chance of being a problem. You just have to make sure you report the revenue from the 1099. Then simply indicate that your costs offset it. Donezo. There is, as stated, basically zero chance of getting audited and even if you do, there is basically zero chance of them denying that claim 4 years down the road. Finally, even if they DO decide you owe some tax, it's not criminal, you just pay it, perhaps with interest and maybe a max of 10% penalty. The key is just to report it.


Good to know it is unlikely. My concern was to have to pay tax on losses plus interest and penalty 4 years down the road. If something like that happened I'd definitely not want to sell any again, the hit would just be too much to make any sense. Since it sounds like it is unlikely, I guess I'll take my chances. Now, what do I do about the other aforementioned, much more costly issue


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## big_adventure (Jan 11, 2022)

Barmoley said:


> Good to know it is unlikely. My concern was to have to pay tax on losses plus interest and penalty 4 years down the road. If something like that happened I'd definitely not want to sell any again, the hit would just be too much to make any sense. Since it sounds like it is unlikely, I guess I'll take my chances. Now, what do I do about the other aforementioned, much more costly issue



Just keep docs and always always always claim all revenue. Even if they are docs you write yourself, they count. I ran a business for over 20 years that was subject to the IRS. I claimed all kinds of deductions - as any business owner should. I had one control where they decided they didn't like one deduction I claimed to the extent that I claimed it. I wrote them a check - it was for one small thing over 3 years, and the tax on the income that was offset by that. Interest came out to squat (the IRS charges a _very_ low interest rate) and they waived penalties. This was a deduction I took for 20 years, but remember, they can only go back 3. 

In the case of a hobbyist buying and selling knives: claim the revenue on your return, and claim your expenses. Just be sure that you do, in fact, have the receipts to back it up. And by "receipt" - you can literally write down on a cocktail napkin "spent 650 on a used Denka today" sign it, date it, and it's technically valid. Even better, of course, is to have the actual paypal notifications or venmo or whatever the kids use these days. But it's not required. Cash is legal tender, after all, and it comes with no receipts by default, so writing up a memo yourself is legal. They MIGHT chuck it out, but it's really unlikely assuming you are talking about reasonable amounts of money. Like if you buy and sell 5K in knives a year, even if they don't believe you, they aren't going to bother actually auditing you - it's not worth it even if you have no cost basis to show. The IRS doesn't audit people to make 500 bucks.


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## applepieforbreakfast (Jan 11, 2022)

Homechef said:


> Think about all the people who are recording mileage for tax purposes. Most keep their records in a notebook or excel file. Both are acceptable documentation to the IRS. They don't need time date stamped photos of your odometer every time you get in the car. It's been about 20 years, but during my brief stint in accounting the IRS mainly just wanted to see some documentation and if you managed to actually get them on the phone regarding something like this I found them to be quite helpful and not that scary!
> 
> My plan, not any legal advice, is a running excel list of knives I've bought and sold with their prices. I'll attach that list to my tax form demonstrating a net loss, result is no tax on sales, but also not allowed to deduct the loss against normal income (because this isn't a business operation).



This is the most sane advice in this thread.


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## Justinv (Jan 11, 2022)

Profits are not per item, they are for everything for a year I believe. So if you make too much then just sell your car for a loss and buy another and you are good for the year right? Maybe start paying rent/mortgage via paypal so you have negative cashflow for the year.


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## big_adventure (Jan 11, 2022)

Justinv said:


> Profits are not per item, they are for everything for a year I believe. So if you make too much then just sell your car for a loss and buy another and you are good for the year right? Maybe start paying rent/mortgage via paypal so you have negative cashflow for the year.



Profits are just revenues minus expenses. For a hobby, not a business, you can't take losses that apply to other income, and you can't apply other income to it.

Here, all you'll basically need to do is write in an expenses (if you bought it same year) and a cost basis line (if not) on the form, to offset the revenue shown on the 1099. Just make sure that you have _some_ justification to what you claim, in the microscopic chance you get audited. Just do NOT forget to list the 1099's revenues on your tax forms. The IRS will receive the 1099 directly from PayPal, so you don't want them to screw you.


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## JayS20 (Jan 11, 2022)

ModRQC said:


> Who was it on KKF that recently said he got billed in the hundred Ks for a misread or mislabelling of knife transaction value by the IRS?


Wasn't that @marc4pt0, aslo doesn't he still owe us the story?


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## xxxclx (Jan 11, 2022)

An Illustration of the Modern United States Tax System


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## riverrat (Jan 11, 2022)

Brian Weekley said:


> A tax increase by any other name.


It's not a tax increase. Taxpayers are required to report profit on anything they sell; the fact that PayPal is now required to submit 1099 forms on sales exceeding $600 does not change that. What it does is make it harder to hide those profits.

The motivation for this tax code change (as I understand it) was to address the apparently significant issue of contractors paying subcontractors via Paypal to avoid taxes. Hobbyists buying and selling items using Paypal got caught up in this. 

Since I'm new to the quality kitchen knife arena, it won't be an issue for me buying and selling knives. I'm a knife buyer not a seller. But I'm also a vinyl record geek, and buy and sell dozens of lps annually, sometimes flipping them to support my "habit". That is going to require a lot more record keeping in order to minimize taxes on my Paypal transactions, and will be impossible in cases where I no longer have a receipt for the lp.


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## chefcomesback (Jan 11, 2022)

If they want to make it like business than claim your knife purchases as assets for business purposes. You will sell mostly with a loss , so no profit reported there


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## HumbleHomeCook (Jan 11, 2022)

riverrat said:


> It's not a tax increase. Taxpayers are required to report profit on anything they sell; the fact that PayPal is now required to submit 1099 forms on sales exceeding $600 does not change that. What it does is make it harder to hide those profits.
> 
> The motivation for this tax code change (as I understand it) was to address the apparently significant issue of contractors paying subcontractors via Paypal to avoid taxes. Hobbyists buying and selling items using Paypal got caught up in this. I would personally be less annoyed by the change if the very rich, especially billionaires such as Bezos, Musk, Zuckerberg etc, paid their fair share. Certain politicians have made addressing that issue very difficult.
> 
> Since I'm new to the quality kitchen knife arena, it won't be an issue for me buying and selling knives. I'm a knife buyer not a seller. But I'm also a vinyl record geek, and buy and sell dozens of lps annually, sometimes flipping them to support my "habit". That is going to require a lot more record keeping in order to minimize taxes on my Paypal transactions, and will be impossible in cases where I no longer have a receipt for the lp.



Never mind. Best not discussed here.


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## Barmoley (Jan 11, 2022)

chefcomesback said:


> If they want to make it like business than claim your knife purchases as assets for business purposes. You will sell mostly with a loss , so no profit reported there


Problem is if you declare a business you have to get a business license, pay sales tax, etc. It is idiotic beyond believe. I know what they were trying to do, but to set limit at $600 is ridiculous. 

I get what people are saying when saying if you make profit you should pay taxes, I agree. The question is not about that it is about making sure you don't pay taxes on losses because of incorrect accounting.


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## Justinv (Jan 12, 2022)

What is going to happen to your average joe that gets a paypal document for selling old household stuff on ebay with no ledger? If they go to a tax preparer they will likely tell them to pay income tax on full revenue because there is no ledger. 

Tax the poor, that solves everything.

Meanwhile politicians don’t want to expand the budget for tax investigators for high dollar complex schemes. That is bad if supporters have unnecessary investigations. If you sell your unused shoes on ebay they’ll throw the book at you.


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## ian (Mar 6, 2022)

AGGGGH! How TF do I report the 1099-K in TurboTax? (Using Premier.) This is driving me up the f-ing wall. You'd think they'd have figured this out, but all the online advice I see is inaccurate and conflicting.


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## ian (Mar 6, 2022)

Update: I gave up trying to do it some other way and just kept clicking “other” till I got to a place where you can list like whatever for income, and then just made two line items, one for $2976 and one for -$2976, labeling them as the relevant income and expenses. Tax returns = game of chicken. Reminds me of 10 yrs ago when I was partly subsidized by a government grant (NSF), and noone at the NSF would give me any guidance about how to report the earnings, just that I should. It’s like they were just trying hard not to have to deal with it. You’d think a governmental agency would know how to file taxes…


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## MarcelNL (Mar 7, 2022)

Gov't departments are NEVER good at telling you how file taxes, they never have to do any...


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## big_adventure (Mar 10, 2022)

ian said:


> Update: I gave up trying to do it some other way and just kept clicking “other” till I got to a place where you can list like whatever for income, and then just made two line items, one for $2976 and one for -$2976, labeling them as the relevant income and expenses. Tax returns = game of chicken. Reminds me of 10 yrs ago when I was partly subsidized by a government grant (NSF), and noone at the NSF would give me any guidance about how to report the earnings, just that I should. It’s like they were just trying hard not to have to deal with it. You’d think a governmental agency would know how to file taxes…



This is basically exactly what you should do. You've reported earnings that will coincide with the 1099. You've announed expenses that equal that. Zero net income = zero tax. If they audit you, you explain this. It's simply not enough to matter, and they won't audit you.


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