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Archive 2022 · Paypal and the IRS

  
 
mineymole
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p.1 #1 · p.1 #1 · Paypal and the IRS


So I sold a used camera today and got the notice from PayPal about giving them my tax information.

Of course this brings up huge issues and implications about selling equipment on Fred Miranda and other sites.

With PayPal fees and the rising cost of shipping with insurance, and now tax - selling used equipment is going to get a bit challenging.

Any ideas?



Feb 02, 2022 at 11:18 AM
tspin
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p.1 #2 · p.1 #2 · Paypal and the IRS


Look at the bright side, this actually cured my GAS. I am clean up my hand and call it a day.


Feb 02, 2022 at 11:21 AM
Mike_5D
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p.1 #3 · p.1 #3 · Paypal and the IRS


Sell for cash locally.


Feb 02, 2022 at 11:25 AM
voodoo1694
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p.1 #4 · p.1 #4 · Paypal and the IRS


Hide yo kids, hide yo wife, the tax man cometh


Feb 02, 2022 at 11:26 AM
shujert
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p.1 #5 · p.1 #5 · Paypal and the IRS


I'm at a net loss for 2021, so maybe not a big deal regarding taxes, but I may very well transition to requiring payment via Venmo or Zelle moving forward. I would expect my feedback rating to allay any fears people have, but I understand this would shrink my pool of potential buyers.


Feb 02, 2022 at 11:27 AM
mineymole
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p.1 #6 · p.1 #6 · Paypal and the IRS


tspin wrote:
Look at the bright side, this actually cured my GAS. I am clean up my hand and call it a day.


Yes indeed.




Feb 02, 2022 at 11:28 AM
mineymole
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p.1 #7 · p.1 #7 · Paypal and the IRS


shujert wrote:
I'm at a net loss for 2021, so maybe not a big deal regarding taxes, but I may very well transition to requiring payment via Venmo or Zelle moving forward. I would expect my feedback rating to allay any fears people have, but I understand this would shrink my pool of potential buyers.


Fred Miranda does not allow sales via Zelle or Venmo. (Venmo is also owned by PayPal so it is only a matter of time....)



Feb 02, 2022 at 11:29 AM
jwpstl
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p.1 #8 · p.1 #8 · Paypal and the IRS


PP Friends and Family is still an option; no tax documents for that. I haven't yet decided if I'm going to ask for FF only but, if I do, I hope my feedback puts minds at ease. Without the reputation, you may have to stick with PP G&S and deal with the tax forms.


Feb 02, 2022 at 11:33 AM
akriegsfeld
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p.1 #9 · p.1 #9 · Paypal and the IRS


Having to pay the tax on something that already had been taxed is another rip off. Just like when buying a used car. But my main concern, since I don't have a business with a tax number is that I don't want
PayPay to have my Social Security number. It is another venue for identity theft.



Feb 02, 2022 at 11:33 AM
Blufox
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p.1 #10 · p.1 #10 · Paypal and the IRS


I recently sold a lens to an established member and he is sending me a check. Kind of old school, but it works.


Feb 02, 2022 at 11:38 AM
MLM1
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p.1 #11 · p.1 #11 · Paypal and the IRS


shujert wrote:
I'm at a net loss for 2021, so maybe not a big deal regarding taxes, but I may very well transition to requiring payment via Venmo or Zelle moving forward. I would expect my feedback rating to allay any fears people have, but I understand this would shrink my pool of potential buyers.


Venmo is paypal, the same will happen shortly.
Zelle, Wire, indeed our ratings and reputation might become crucial...



Feb 02, 2022 at 11:39 AM
EdwardDye
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p.1 #12 · p.1 #12 · Paypal and the IRS


Yeah, that suck... I always try to buy and sell locally if possible, also just keep record of the price of each item when you buy them and since most of us are sell at a lost it should be OK.


Feb 02, 2022 at 11:39 AM
guyharrison
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p.1 #13 · p.1 #13 · Paypal and the IRS


How does this tax thing work? Is it that Pay Pal reports the sale to the IRS as "income" even if I am liquidating used gear? Would I have to somehow document what I paid for the gear in order to avoid taxes? Even if I am not buying and selling as a business, but just an individual?


Feb 02, 2022 at 11:44 AM
mineymole
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p.1 #14 · p.1 #14 · Paypal and the IRS


Blufox wrote:
I recently sold a lens to an established member and he is sending me a check. Kind of old school, but it works.


Yes I am thinking this is one way forward.



Feb 02, 2022 at 11:52 AM
mineymole
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p.1 #15 · p.1 #15 · Paypal and the IRS


EdwardDye wrote:
Yeah, that suck... I always try to buy and sell locally if possible, also just keep record of the price of each item when you buy them and since most of us are sell at a lost it should be OK.


This is one way to do it. I have also sometimes had equipment listed as research. I know weird, but that is what my tax guy did. Yes I think it is imperative to have good records of what you paid, though this gets really difficult if equipment is old etc.



Feb 02, 2022 at 11:54 AM
argar
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p.1 #16 · p.1 #16 · Paypal and the IRS


guyharrison wrote:
How does this tax thing work? Is it that Pay Pal reports the sale to the IRS as "income" even if I am liquidating used gear? Would I have to somehow document what I paid for the gear in order to avoid taxes? Even if I am not buying and selling as a business, but just an individual?


For example, if you purchased a lens for $1000 and sold it for $800, this amount would not be subject to income tax, you won't owe taxes on the sale.

This isn't a tax change, it's a reporting change and it will not affect most people, unless you buy and sell for profit.



Feb 02, 2022 at 11:59 AM
Walter H
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p.1 #17 · p.1 #17 · Paypal and the IRS


Here is the REALLY important detail: you will not be taxed on personal items sold for a loss.

So the 1099-K will still be generated and we should all talk to a tax preparer as to how to document (I imagine we will need to have our original receipts to show a loss on an item in case of any possible audit), etc. But this is about income generation, not second-hand cameras and lenses.

The question then is how is this tracked within PayPal and their own press release doesn't specify. It does seem that requesting F&F is safest to avoid possible G&S taxation. But then there's risk in that too.

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



Feb 02, 2022 at 12:00 PM
mineymole
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p.1 #18 · p.1 #18 · Paypal and the IRS


argar wrote:
For example, if you purchased a lens for $1000 and sold it for $800, this amount would not be subject to income tax, you won't owe taxes on the sale.

This isn't a tax change, it's a reporting change and it will not affect most people, unless you buy and sell for profit.


So how is this shown if we are getting 1099s?



Feb 02, 2022 at 12:01 PM
mineymole
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p.1 #19 · p.1 #19 · Paypal and the IRS


Walter H wrote:
Here is the REALLY important detail: you will not be taxed on personal items sold for a loss.

So the 1099-K will still be generated and we should all talk to a tax preparer as to how to document (I imagine we will need to have our original receipts to show a loss on an item in case of any possible audit), etc. But this is about income generation, not second-hand cameras and lenses.

The question then is how is this tracked within PayPal and their own press release doesn't specify. It does seem that requesting F&F is safest to
...Show more

THIS is so helpful! Thank you!!



Feb 02, 2022 at 12:02 PM
tspin
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p.1 #20 · p.1 #20 · Paypal and the IRS


argar wrote:
For example, if you purchased a lens for $1000 and sold it for $800, this amount would not be subject to income tax, you won't owe taxes on the sale.

This isn't a tax change, it's a reporting change and it will not affect most people, unless you buy and sell for profit.


what about the sales tax? Ebay and amazon charges sales tax for you if you sale there.



Feb 02, 2022 at 12:02 PM
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