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crunchee

Ebay Sucks...For Yet Another Reason!

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Posted (edited)
9 minutes ago, Steve Haynie said:

I have been told that before, but never by an accountant or tax lawyer.  The subject came up when talking about collectibles that go up in value drastically.  You paid $50 for an effect pedal that now gets $250.  You are supposed to pay tax on the $200 you made 20 years later.  You bought a 1963 Strat in high school that you rarely played and now want to part with it for a fair market price.  What do you do? 

Technically, if you are making money on it, then it becomes a capital gain and it is taxable, and you’re required to report it. However in this game that we’re in with guitars and used gear, typically we are breaking even or taking a loss,  especially if you cover shipping.  In these cases absolutely not, you do not have to report it. Now if you  made $10,000 on the Stratocaster that you bought for only 3000, then yes you need to report the $7000 as a capital gain. But not on all of our little rinky-dink sales where  we’re not making any money. That’s just stupidity and even the IRS doesn’t require it. 

Edited by gtrdaddy

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What most people do is deal in cash and never report it. And keep cash bank deposits below $10,000. And they are likely not keeping a ledger that can be audited.

Unless they do have a business and are getting the other benefits, like depreciating their gear, in which case they almost certainly DO keep records and are subject, however remote the odds, to being audited. This assumes they have taxable income to charge the "losses" against.

That is NOT tax advice suggesting a person fail to report income that is legally taxable! 😀

Now, for many of us, any "taxable gain" is most likely more than offset by losses on other gear sales. I cannot recall the last time I had more gains than losses. And it seems all the more difficult to gain, or just break even, with tax being added to so many internet sales.

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4 hours ago, kizanski said:

It will just be another variable in the bargaining process, along with shipping fees and eBay/Reverb fees.

Oh, and the cost of the boxes! lol

What are you worried about? You're getting out of the game, remember? 

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1 minute ago, MCChris said:

What are you worried about? You're getting out of the game, remember? 

Right!  And I'll be buying boxes, paying shipping, paying Reverb fees...

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1 hour ago, django49 said:

What most people do is deal in cash and never report it. And keep cash bank deposits below $10,000. And they are likely not keeping a ledger that can be audited.

Unless they do have a business and are getting the other benefits, like depreciating their gear, in which case they almost certainly DO keep records and are subject, however remote the odds, to being audited. This assumes they have taxable income to charge the "losses" against.

That is NOT tax advice suggesting a person fail to report income that is legally taxable! 😀

Now, for many of us, any "taxable gain" is most likely more than offset by losses on other gear sales. I cannot recall the last time I had more gains than losses. And it seems all the more difficult to gain, or just break even, with tax being added to so many internet sales.

I think the threshold for deposits is now $3000, and if you make a lot of small deposits that total in the thousands for anything other than a regular business the IRS assumes you are trying to fly under the radar and busts you. 

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12 minutes ago, Steve Haynie said:

I think the threshold for deposits is now $3000, and if you make a lot of small deposits that total in the thousands for anything other than a regular business the IRS assumes you are trying to fly under the radar and busts you. 

It’s still 10k as far as I know. 

...but then what do I know?

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If one of you can send me $10,000 in cash (or 10 of you send me $1,000 each), I'll be happy to test the deposit reporting theory.

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Posted (edited)

Speaking of eBay sucks.    If you can assist me by hitting report on this jerk I would appreciate it. He stole all of my text and pics from Craigslist Boston.    Right down to the daddy’s junky music gig bag.    Just hitting report should do the trick.   Zero feedback seller.   Weasel.  Thanks in advance.    Btw.    Regarding this thread.   Would highly recommend discussing with an accountant who is licensed in your state.   https://www.ebay.com/itm/2019-Charvel-Pro-Mod-strat-Ebony-board-burgundy-mist/372702942086?epid=18028389333&hash=item56c6d39386:g:KO8AAOSwd01dHLiy

Edited by DaveL
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Posted (edited)

It is not as cut and dry as it is being presented here.

 

Read this:

https://budgeting.thenest.com/bank-reporting-guidelines-cash-deposits-23318.html

 

Quote

Looking at the Numbers

Banks must notify the government any time they receive more than $10,000 in a single deposit. They must also report withdrawals of that size, or anyone using that much cash to buy a negotiable instrument such as a cashier's check or a bank draft.

This rule applies to American dollars and to foreign currency worth more than $10,000. It also kicks in if the bank receives multiple payments from the same agent or individual over the course of a year adding up to more than $10,000. Banks don't have to report personal checks, regardless of the amount.

 

Suspicious Activity Reporting

The federal government requires banks to report smaller transactions that may be a sign of suspicious activity. Federal guidelines say suspicious activity could include a deposit or withdrawal of $5,000 or more by a customer who doesn't normally make transactions that big. Banks may also report transaction that fall just under the BSA's $10,000 limit or that have no "apparent lawful purpose," just to be on the safe side of the law. Critics of the law say the standards for suspicious activity are far too vague to be effective.

 

Edited by Studio Custom
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6 hours ago, DaveL said:

   If you can assist me by hitting report on this jerk I would appreciate it.

Done!

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Posted (edited)
On 7/3/2019 at 10:38 AM, Sugartune said:

From a message to sellers received May 21.....At Reverb - State taxes will be collected on purchases from sellers based in...

- Washington & Minnesota (Current) 

- Pennsylvania, New Jersey, Arizona, South Carolina, Connecticut, Alabama, Oklahoma, Iowa, DC, South Dakota, Wyoming (effective July 15)

 

Yup. I am in Washington state and pay sales tax on Reverb and Ebay purchases. 

Edited by Camstone

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Posted (edited)

I understand sales tax to the point that if I make a purchase in my state, my state gets a cut of that purchase.  What I don't understand is how can my state can collect sales tax on something I purchase out of state?   Wyoming does not call this Sales Tax, they use the term "Use Tax".  In my mind my sales tax should go to the state where I made the purchase not my state.  My state did nothing to facilitate or help commerce in the state where the sale was made.  To a point I don't mind paying tax as I think roads, sidewalks, parks, police, emergency services, state radio, national weather service, and military are a good thing.  However the level of government services I want is probably not to the level or same batch of things that someone else wants (Conservative vs Liberal, or Republican vs Democrat).

I guess at the end of the day the governments view is tax every income, transaction, license, lodging, driving, eating, drinking, smoking, walking, talking, and dying at every possible angle.

All I can say is just pay your tax, or start going to your city council, school board, and state public forum meetings and let your voice be heard.

Edited by dhuber

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When unelected bureaucrats at the IRS tell you it's not responsible for the advice they give you over the phone, you know tax laws are are ambiguous and arbitrary, and probably intentionally so.  The very notion that an IRS agent can presume to read your mind and magically divine your intent, you know the game is crooked and rigged in their favor. If the law says you can deposit thus and so legally, then the IRS has no business dinging you because they "believe" you intended to fly under the radar. If they don't like it, legislators should change the law and/or clarify it so as to remove any ambiguity.

With such a crooked system, it seems preferable to buy from or sell to a guy in the Walmart parking lot to avoid the tax system altogether. 

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12 hours ago, FGJ said:

When unelected bureaucrats at the IRS tell you it's not responsible for the advice they give you over the phone, you know tax laws are are ambiguous and arbitrary, and probably intentionally so.  The very notion that an IRS agent can presume to read your mind and magically divine your intent, you know the game is crooked and rigged in their favor. If the law says you can deposit thus and so legally, then the IRS has no business dinging you because they "believe" you intended to fly under the radar. If they don't like it, legislators should change the law and/or clarify it so as to remove any ambiguity.

With such a crooked system, it seems preferable to buy from or sell to a guy in the Walmart parking lot to avoid the tax system altogether. 

Just an FYI, as I see this type of comment a LOT.  IRS does not write tax laws, it enforces them.  Your ELECTED Senators and Congressmen are the ones who make the laws.  Getting mad at the IRS is like being angry at the police officer who pulled you over for speeding - HE didn't set the speed limit, but it's his job to enforce it.

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Posted (edited)

Methinks you're attacking a straw man. If you go back and read what I actually wrote, you'll see I clearly wrote that "legislators" should change the law, not the IRS. And if you recall, it's the legislative branch, not the executive or judicial, that makes law. 

I'm quite familiar how a bill becomes a law. I grew up on Schoolhouse Rock like all the other old farts here.

Edited by FGJ
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