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Buying and Selling on eBay: Tips, Tricks, Problems & Questions

Fueco

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You know that whole “Neither snow nor rain nor heat nor gloom of night stays these couriers from the swift completion of their appointed rounds.” thing that the USPS used to use for advertising?

Well yeah, the mailman did not come yesterday, and the three packages I have incoming show no updates to tracking since Sunday in Denver.
 

haloitsme

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regarding sales tax and US 800$ threshold.
Item price: 750$ Shipping 49$ and then eBay charges sales tax and whoooooppp above 800$.
As I know, usually it is CIF (good insurance freight) that counts and sales tax go to the state, is this shipment now taxed (above 800 or not below 800)?
 

Steve Smith

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And here's another:

View attachment 1574052
0 feedback buyer, apparently opened an account to buy this shirt. Opened a SNAD claiming "The sleeves and length are too short. I have many Pendleton’s to compare it to. "

If that's true, then the detailed measurements in the listing might have served some use.
String theory, quantum physics, shirt measurements...all are things which are too complex to understand. I give P2P and neck-sleeve measurements and get SNAD returns for fit.

I don't even bother to answer "Does this shirt fit like a..." questions.
 

zargoz

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For all of you that sell casually, and typically sell at a loss--just selling stuff you don't wear much to fund new purchases--how do you deal with income taxes? This is the first year that I've been issued a 1099K by PayPal. I know that I should be able to subtract those earnings from the original cost of those items, and also that I can subtract fees/shipping from the total, so shouldn't end up having my 1099K amount count as income (as it actually reflects a net loss) but how do you all typically show this? Is there an official way of demonstrating that this isn't a net profit, or do you simply claim this on your taxes and then worry about proof in the unlucky event they come back to you asking for proof?

My taxes until now have mostly just been me punching W2 amounts directly into my 1040 form, so I'm not at all sophisticated when it comes to other forms of income and/or deductions. That said, I didn't earn nearly enough to justify an accountant for this, so hoping to figure it out on my own. Any advice would be appreciated!
I am in the same boat. I used my extra time at home this past year to do some serious closet cleaning. I received a surprise 1099 from Paypal last month and it turns out that my perpetually broke state changed the law to lower reporting limits for electronic payment processors like PayPal. Instead of the federal limits $20k/200 transactions, my state now requires them to issue a 1099K if payments exceed $1k/3 transactions. Ridiculous.

Since the reporting change was a surprise to me (didn't know about it until I received the 1099k) I didn't keep detailed records throughout the year as I was selling stuff. And it's not like I have receipts for every shirt or pair of boots I've purchased over the past decade. Also Paypal reported the gross transactions on the 1099, which leaves me potentially needing to go back through 100+ transactions and figure out my net after deducting their fee, eBay fee, shipping, and even state sales tax collected and remitted by ebay but still reported in my gross. Nice one, Paypal.

Still deciding how to approach filing as it would chap my ass to pay 40% of my gross back in taxes, when that gross really isn't income/profit. If anything I probably lost money overall. But it doesn't seem like the tax code allows one to have expenses against reported income but also NOT be a business. Nice one, Tax Cut and Jobs Act.

Anyway, I have used the google machine to try to figure this out and not surprisingly, answers vary. Here's a couple threads I found sort of helpful, but far from conclusive:

https://www.bogleheads.org/forum/viewtopic.php?f=2&t=337521&sid=a077b9f0d8d012dc045ce4c8da531cb4&start=50
https://ttlc.intuit.com/community/taxes/discussion/1099-k-from-paypal/00/1822466

From what I can see (and I am in now way qualified to give tax advice) it comes down to whether you classify the activity as a business or a hobby. If you consider it a business, you need to show profits in 2/5 years or something like that. If you consider it a hobby, you can't deduct any expenses from the reported (gross) income.

https://www.nolo.com/legal-encyclopedia/can-you-deduct-your-expenses-from-hobby.html

My wife and I normally just have W2s and regular 1099s from our investment accounts. No dependents, no mortgage, nothing remotely complicated that required us to use a tax preparer in the past and I don't want to do so this year, since I don't have the records ready to go anyway. What a pain. Good luck...
 

noob in 89

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Oh, man...

I just got an email saying that I need to ‘improve my seller performance’ — something not likely to change anytime soon as I don’t sell much.

Is it likely I’ll lose buying privileges, as some places state?

I had a few cases closed/refunded by eBay; I assumed this was just the same as refunding them, but I wouldn’t waste any more time on rude buyers.

I got way behind this past year trying to always mail from home.
 
Last edited:

Sartoriamo

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^^^ @zenosparadox, @zargoz: the easiest way to offset your income via PayPal is to print the annual financial report, and if you do all your buying with your PP card (or PP online), then you will easily be able to show a wash or be able to carry forward a net loss or very small profit. My accountant charges only $300 a year to lay it all out for the IRS, so to me it's well worth it. There are different rules as regards items intended to make profit, and the sale of personally owned items. In the former case, sales are set against expenses, not just acquisition costs but all the other expenses of running a business (gas, cars, telephones, computers, selling fees, part of your rent, storage unit etc). If personal purchases, then their sale is not counted as "income" if you have made a loss on them, but reflect as a capital gain (schedule D) if you profited.

The 1099-K "red-flags" at the IRS only if you fail to report it on your tax return.
 

FPB

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Thank you all with advice! Police report and the right rep helped me out. Got the $500 back hopefully it was out of his account and not ebays. Scum bag scammer. Make sure you block 1gdub
Did the police f/u with you too?
 

zargoz

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^^^ @zenosparadox, @zargoz: the easiest way to offset your income via PayPal is to print the annual financial report, and if you do all your buying with your PP card (or PP online), then you will easily be able to show a wash or be able to carry forward a net loss or very small profit. My accountant charges only $300 a year to lay it all out for the IRS, so to me it's well worth it. There are different rules as regards items intended to make profit, and the sale of personally owned items. In the former case, sales are set against expenses, not just acquisition costs but all the other expenses of running a business (gas, cars, telephones, computers, selling fees, part of your rent, storage unit etc). If personal purchases, then their sale is not counted as "income" if you have made a loss on them, but reflect as a capital gain (schedule D) if you profited.

The 1099-K "red-flags" at the IRS only if you fail to report it on your tax return.
Thanks for the tip but in my case, it's not merch I bought to resell, just personal stuff mostly used, I'm clearing out. So I need to look into the Schedule D thing.
 

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