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Paypal and the IRS

  
 
fotografur
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p.4 #1 · p.4 #1 · Paypal and the IRS


I've almost lost my creative desire for photography after reading this thread..................

Off to take some pictures



Mar 15, 2022 at 11:57 AM
wordfool
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p.4 #2 · p.4 #2 · Paypal and the IRS


resurrecting this thread because I'm genuinely curious if anyone has ever sold camera equipment for a profit. I guess for some in-demand items or genuine antiques one could make money, but in general I don't know of any electronics equipment that appreciates in value over time. I've certainly never made any money selling old gear. It all depreciates, which makes me wonder just how likely it is that the IRS is really going to take an interest in the sale of a few personal items of electronics sold via PP when any reasonable person understands that it will have been sold at a loss.

Yes, the reporting aspects of this new rule sucks (I hope Turbotax makes it easy) and the $600 limit is ridiculous, but I'd have no hesitation to just report what I paid for something 5 years ago (guesstimating if necessary) even if I had no actual receipt to prove it. And from now on I'll definitely either keep a copy of the ad or request a receipt on any purchases of used equipment.



May 16, 2022 at 05:37 PM
Captmatt
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p.4 #3 · p.4 #3 · Paypal and the IRS


They can only tax you on the net difference between sales and purchases. If you are buying as much as you are selling, there is nothing to tax. At least that is how it was explained to me.


May 17, 2022 at 02:31 PM
cinema
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p.4 #4 · p.4 #4 · Paypal and the IRS


simple--i will never report this to the irs. they get the form sent to them. up to them to send one of their salaried masters degreed email job chicks to my house for a couple hundred in taxes.


May 20, 2022 at 06:22 AM
VictorJB
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p.4 #5 · p.4 #5 · Paypal and the IRS


More than likely you would receive an automated letter saying thereís a discrepancy and to please provide them with the form. Youíd get away with it the first time but eventually it will trigger fines and/or a full blown audit. If theyíre going to do a full blown audit, theyíd end up auditing you for multiple years and that wonít be a pleasant experience.

cinema wrote:
simple--i will never report this to the irs. they get the form sent to them. up to them to send one of their salaried masters degreed email job chicks to my house for a couple hundred in taxes.




May 21, 2022 at 07:15 AM
tschopp
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p.4 #6 · p.4 #6 · Paypal and the IRS




wordfool wrote:
resurrecting this thread because I'm genuinely curious if anyone has ever sold camera equipment for a profit. I guess for some in-demand items or genuine antiques one could make money, but in general I don't know of any electronics equipment that appreciates in value over time. I've certainly never made any money selling old gear. It all depreciates, which makes me wonder just how likely it is that the IRS is really going to take an interest in the sale of a few personal items of electronics sold via PP when any reasonable person understands that it will have been
...Show more

I have on a few items. I mainly try to buy used at a price in the bottom 10% for the item. This means waiting and lots of looking, so there is a cost to this. Then I try to sell at the high end of the range for the item. Typically this just gets me closer to break even when fees and shipping are factored in.

I did buy one lens at a very good price, it was missing a lens hood. I later bought a used hood. And the combo was profitable. But on the overall I donít think Iím in any danger of a capital gain.



May 29, 2022 at 09:41 AM
A.MatthewS
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p.4 #7 · p.4 #7 · Paypal and the IRS


I have a feeling a lot of people trying to shirk the IRS with friends and family are going to be in for a rude awakening when someone bought something from them F&F and then said item is sold through G&S and the person reports the loss/gain through the original sale. You'll likely not only have to pay the tax anyway but, a penalty for trying to evade it.



Jun 12, 2022 at 10:27 AM
dronek75
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p.4 #8 · p.4 #8 · Paypal and the IRS


im planning on purchasing some gear on here as im switching systems. it will be quite few thousands that i will spend on here mostly. do i have to worry about getting taxed at the end of the year? If so, how to avoid it.
Thanks



Jun 26, 2022 at 10:55 AM
rattymouse
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p.4 #9 · p.4 #9 · Paypal and the IRS


A.MatthewS wrote:
I have a feeling a lot of people trying to shirk the IRS with friends and family are going to be in for a rude awakening when someone bought something from them F&F and then said item is sold through G&S and the person reports the loss/gain through the original sale. You'll likely not only have to pay the tax anyway but, a penalty for trying to evade it.


Dream on McDuff. The IRS is massively underfunded. What little investigating that they do looking for taxes is not with tiny people found here. They need hundreds of millions of dollars. That will come from the big fish. The IRS will lose money looking for taxes from gear sellers.



Jun 27, 2022 at 05:51 PM
rattymouse
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p.4 #10 · p.4 #10 · Paypal and the IRS


wordfool wrote:
resurrecting this thread because I'm genuinely curious if anyone has ever sold camera equipment for a profit. I guess for some in-demand items or genuine antiques one could make money, but in general I don't know of any electronics equipment that appreciates in value over time. I've certainly never made any money selling old gear. It all depreciates, which makes me wonder just how likely it is that the IRS is really going to take an interest in the sale of a few personal items of electronics sold via PP when any reasonable person understands that it will have been
...Show more

Here's gear I have that I could profit from:

Fujifilm GF670 paid $1500 for it, Ebay buy it now (BIN) price completed at $3000.
Fujifilm GF670W, paid $2300 for it, Ebay BIN price completed at $4000.
Fujifilm GA645, paid $400 for it, Ebay BIN price completed at $1200.
Fujifilm TX-1, paid around $2000 for it, Ebay BIN price complete at $4500.

And a lens:

Fujinon 30mm f/5.6, paid $1800 for it, BIN price completed at $4000.

I didnt sell any of this gear. I just looked at Ebay BIN price to see what the going rate is for each item.



Jun 27, 2022 at 06:01 PM
 


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cinema
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p.4 #11 · p.4 #11 · Paypal and the IRS


man RIP to anyone paying 1200 for a ga645 😂


Jun 29, 2022 at 05:48 PM
rattymouse
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p.4 #12 · p.4 #12 · Paypal and the IRS


cinema wrote:
man RIP to anyone paying 1200 for a ga645 😂


It's a great camera, and in today's inflated economy, that's the going rate. I love my GA645. Tack sharp lens, ever photo, every time.



Jun 29, 2022 at 07:36 PM
elwappo99
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p.4 #13 · p.4 #13 · Paypal and the IRS


Captmatt wrote:
They can only tax you on the net difference between sales and purchases. If you are buying as much as you are selling, there is nothing to tax. At least that is how it was explained to me.


Yup this is correct. However, you'll need to keep track of receipts for everything you purchase in case you get audited. What a nightmare and a mess for hobbyists who are swapping gear around. Emailed my rep who told me it's a way to get the "1% to pay their fair share"



Jul 05, 2022 at 04:18 PM
Captmatt
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p.4 #14 · p.4 #14 · Paypal and the IRS


True, though if you use paypal, or any other payment method exclusively, it is easy enough to get the records.


Jul 05, 2022 at 07:47 PM
MaxMD
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p.4 #15 · p.4 #15 · Paypal and the IRS


Want to add a few points that have not been mentioned above:
1. Claim income deduction as a loss from a hobby on tax return. So the difference between what you paid and sold could be used for this claim.
2. Use the released price of a photo equipment as the paid price in place of the purchase receipt price (for lack of record). This information is widely available online.
3. IRS likely would view Paypal transaction amount as either compensation for your services or income for something you have "produced" and sold. The burden is more on you to prove that those transactions are selling of your used equipment. I would, therefore, make a pdf copy of the item sold thru FM and payment received from Paypal as record for such a transaction, just in case.

Hope this helps.



Jul 08, 2022 at 08:34 AM
Peter Figen
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p.4 #16 · p.4 #16 · Paypal and the IRS


All the professional photographers who either expense their equipment or put it on a schedule are already being subsidized by the government in the amount of the deduction. When you go to sell that equipment later, according to my accountant years ago, that money you get for it now is now ordinary income and subject to whatever taxes you owe.

And many states are now enforcing sales and use tax laws long on the books but seldom enforced, even for people not in business. Technically anyone buying items here on FM should be paying sales or use tax as well and those of us who have resale certificates should at least be adding sales tax when the sale happens in your state - or, y'know, saying something like "will sell to any state in the U.S. except California". That still wouldn't let the buyer off the hook but it does make it easier for the seller.

I find it much easier to pay the sales tax at the time of purchase when possible and writing this reminds me that I'll need to pay the $500+ use tax on the lens I just ordered from the UK.

The income tax part of the equation can often be mitigated at the end of the year by selling off the turds, or some of them, in your stock portfolio late in December, something that likely will not be a problem this year. And, depending on your income level, capital gains might not be an issue either.



Jul 11, 2022 at 04:50 AM
hkrazerx
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p.4 #17 · p.4 #17 · Paypal and the IRS


I have been downsizing my gear and collected around $10,000 PayPal payments. They were all sold at a loss but didnít keep sales receipts because most of the stuff were purchased at least 10 years ago.


Jul 21, 2022 at 01:10 PM
rrklepper
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p.4 #18 · p.4 #18 · Paypal and the IRS


I hate to rain on the parade here but most of you have this wrong. The purchaser pays sales tax on the sale. It is up to the seller to collect that sales tax. If you sell a lens at a loss you can write it off, but the write off comes off of your profit on the business that you run using said lens. If you donít make money off of your photography and you have nothing to write off


Jul 21, 2022 at 03:34 PM
MaxMD
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p.4 #19 · p.4 #19 · Paypal and the IRS


@rrklepper posted an interesting concept. If that would to hold true, the people who sell their used stuff on their front yard during "yard sale" or "garage sale" should collect the sales tax from the buyers as well. How about selling your used stuff to your friends or colleagues? I am not a tax accountant, but I think a seller probably is required to collect sales tax from the buyer if he/she is in the business of selling such merchandise. Photographers are in the business of providing photography services, not in the business of selling equipment.

As for claiming tax write off if you have a business, you can also claim business loss and have that amount carried to the futures years for tax write off if you do not have a profit in the prior year.



Jul 21, 2022 at 08:16 PM
AndrewNYC
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p.4 #20 · p.4 #20 · Paypal and the IRS


Itís not paying tax, itís reporting the payment. You essentially report the cost for the item you received payment on and it mitigates the taxes

akriegsfeld wrote:
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.




Jul 22, 2022 at 07:12 AM
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