Bad Paypal 1099

Make no mistake the IRS is currently planned to phase in significant staffing due in large part to these changes. If you get a 1099 suggest you handle it appropriately. As Peter said - it may take a couple of years, but when they catch up with you it gets much worse. When you have 1099s getting filed or similar things from other sources, they generally track more folks down than you would think. And with an increased staff and focus on this - their odds will become increasing.
Unfortunately, for many folks this is just going to be a bogus tax and a pain. I just can't under stand why the threshold is $600 on this. Common sense tells you this was not truly aimed to go after the "rich" or companies. If so the level would be much higher; something in the $5000 or more range would have made more sense.
 
Docscoot said:
I believe anyone here is free to accept crypto as payment, the question is how you provide any sort of buyer security and potential for refund with a blockchain transaction. I assume it will happen, but takes some good multi key transaction system to secure things. Not sure if anything like that is mainstream yet, and government will do its best to get its hands on this market soon enough.
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Like almost all other forms of payment being discussed (like MOs, cash, PPFF, Venmo/CashApp/etc.) this will go away.

Buyer security will be the ultimate cost of the sort of tax evasion "planning" we're discussing here. As I've stated before in this thread already, all this chest-beating about only using PPG&S and "anyone who doesn't is a scammer" is already starting to ring hollow. I expect by 2023, you'll see almost all transactions on the Exchange pretty much using the payment methods I stated above, because people aren't going to want to take the tax hit.
 
I'm turning all you mf'ers in.

















just-kidding-fred-armisen.gif
 
Quiet said:
Like almost all other forms of payment being discussed (like MOs, cash, PPFF, Venmo/CashApp/etc.) this will go away.

Buyer security will be the ultimate cost of the sort of tax evasion "planning" we're discussing here. As I've stated before in this thread already, all this chest-beating about only using PPG&S and "anyone who doesn't is a scammer" is already starting to ring hollow. I expect by 2023, you'll see almost all transactions on the Exchange pretty much using the payment methods I stated above, because people aren't going to want to take the tax hit.
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I'm still against the idea of using PP F&F for buying and selling. It's a courtesy that PayPal offers to its users to send gifts. It'll probably go away, if enough people use it for sales.

If I use other ways of exchanging money, I don't expect any buyer/seller protections, so I just have to do what I can to mitigate risk. It's a gamble, and I'll only deal with amounts I can afford to lose. I'm already at the point that I only want to deal with members that I know from participation in this community. One more reason not to deal with folks who keep their profile pages hidden.
 
Quiet said:
:thumbsup:
Like almost all other forms of payment being discussed (like MOs, cash, PPFF, Venmo/CashApp/etc.) this will go away.

Buyer security will be the ultimate cost of the sort of tax evasion "planning" we're discussing here. As I've stated before in this thread already, all this chest-beating about only using PPG&S and "anyone who doesn't is a scammer" is already starting to ring hollow. I expect by 2023, you'll see almost all transactions on the Exchange pretty much using the payment methods I stated above, because people aren't going to want to take the tax hit.
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^^^That's my plan^^^ Trust between buyer & seller will be at a premium >>> which is the way it always should be. :thumbsup:

The only downside I'm seeing atm, is if the buyer's envelope with enclosed cash or money order goes missing or is opened and the loot secreted away by USPS workers >>> who takes the hit? buyer? seller? both?

I'd feel like crap if one of my BF friends bought a blade from me and they had their loot jacked, but at the same time, it'd suck big time to subsidize lost/stolen loot of expensive blades with zero security.

What would be a good plan?...let's game it out...

I'm thinking the buyer sends funds via personal check or, if they have to send cash or money order, send the actual folding money or money order via USPS Registered Mail. Would either of <<<those tactics provide the necessary security?
 
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r8shell said:
I'm still against the idea of using PP F&F for buying and selling. It's a courtesy that PayPal offers to its users to send gifts. It'll probably go away, if enough people use it for sales.

If I use other ways of exchanging money, I don't expect any buyer/seller protections, so I just have to do what I can to mitigate risk. It's a gamble, and I'll only deal with amounts I can afford to lose. I'm already at the point that I only want to deal with members that I know from participation in this community. One more reason not to deal with folks who keep their profile pages hidden.
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I think this is correct, also. Paypal will almost certainly write new database watch tools that will look for patterns. "This person seems to get regular "gifts" of hundreds of dollars each time. Flag that account." In fact, this is probably already in the works, or has been done. A vast number of people use Paypal to buy or sell items across a huge variety of hobbies, probably the only reason PP hasn't taken the fraudulent use of FF more seriously was because of how much money they've been raking in from people still using PPGS. A TON of people still use PP to pay for Ebay auctions, when in fact there are now other methods of payment available. If a lot of those people suddenly try to switch to PPFF, it's probably the end of that for everyone. That Forbes article says that it will be possible that "non income payments" might be lumped into the reported income in the 1099, at which point it will be on you to explain to the IRS why you received several hundred (or thousands) of dollars in "gifts", possibly triggering another element of the tax code. It's going to be interesting times for sure, but hey, we have to make sure everyone pays their taxes, a lot of useless eaters are depending on us!

PeteyTwoPointOne said:
^^^That's my plan^^^ Trust between buyer & seller will be at a premium >>> which is the way it always should be. :thumbsup:

The only downside I'm seeing atm, is if the buyer's envelope with enclosed cash or money order goes missing or is opened and the loot secreted away by USPS workers >>> who takes the hit? buyer? seller? both?

I'd feel like crap if one of my BF friends bought a blade from me and they had their loot jacked, but at the same time, I am not rich enough to subsidize lost/stolen loot of some blades I've bought & sold.

What would be a good plan?...let's game it out...

I'm thinking the buyer sends funds via personal check or, if they have to send cash or money order, send funds via Registered Mail. Would either of <<<those tactics provide the necessary security?
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Honestly, if a seller wants cash, but wouldn't accept a check, that might be a sign of shenanigans. For that matter, an MO is effectively the same as cash as well. As for checks, there should be no issue in accepting a check, provided the buyer is willing to wait until that check has cleared the seller's account. At that point, if the buyer tried any shenanigans, it's going to be very easy for the seller to have both banks on their side in the matter.

As for who would be the loser in the event that an envelope full of cash is lost, I can't say. That would be a pretty crap situation, for all the reasons you've stated.
 
Quiet said:
Honestly, if a seller wants cash, but wouldn't accept a check, that might be a sign of shenanigans. For that matter, an MO is effectively the same as cash as well. As for checks, there should be no issue in accepting a check, provided the buyer is willing to wait until that check has cleared the seller's account. At that point, if the buyer tried any shenanigans, it's going to be very easy for the seller to have both banks on their side in the matter.

As for who would be the loser in the event that an envelope full of cash is lost, I can't say. That would be a pretty crap situation, for all the reasons you've stated.
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Point taken...

so best practices = Personal Check or USPS MO via Registered Mail? < I realize it's super slow, but not a prob. for me personally >
 
PeteyTwoPointOne said:
Point taken...

so best practices = Personal Check or USPS MO via Registered Mail? < I realize it's super slow, but not a prob. for me personally >
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Well, that would definitely be a strong way to ensure the payment got to the seller for sure. However, the other issue still remains (that the seller be an aboveboard person and actually send you the knife). After all, there won't be a Paypal entity there to yank the money out of their account and give it back to you with any of these alternate payment methods.

Basically, we're going to need this place (the Feedback section) now more than ever.
 
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Quiet said:
Well, that would definitely be a strong way to ensure the payment got to the seller for sure.
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Every question that gets resolved brings up more questions to mind... o_O

Wondering now if USPS will be required to flag/alert IRS of $600+ USPS MO's sent to individuals? If that doesn't happen currently, I can see that loop being closed eventually also.

This year might be a good "wait & see" period to reign in my spending and subsequent collection cannibalization that always follows binges.
 
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PeteyTwoPointOne said:
I'd feel like crap if one of my BF friends bought a blade from me and they had their loot jacked, but at the same time, it'd suck big time to subsidize lost/stolen loot of expensive blades with zero security.

What would be a good plan?...let's game it out...

I'm thinking the buyer sends funds via personal check or, if they have to send cash or money order, send the actual folding money or money order via USPS Registered Mail. Would either of <<<those tactics provide the necessary security?
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Cash not a great idea. I have done it, but it is chancy. If you do send it priority with signature.
USPS money order is pretty safe. I send them priority with tracking. I have only had a couple problems.
1. I sent regular mail and it took 14 days to go 50 mile. I sent the buyer a 2nd during the lapse and was returned the original.
2 another went missing for about 30 days -resolved between that time
3 sent in a cardboard priority envelope. envelope arrived damaged with a note from USPS, but money order in an addressed envelope was missing. I had to file a claim and was repaid in 60-90 days. I covered that one again for the item.
This is out of a load of transactions. With USPS money orders if they are stolen. It is either going to have to be deposited in an account, or cashed at the PO with ID
I have never lost money with the USPS money orders. I like the view through letter size priority envelopes best.
 
PeteyTwoPointOne said:
Every question that gets resolved brings up more questions to mind... o_O
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There are no easy answers that are as good as it was before the law, and likely not going to be any. We are niche market and very small. This is the reason also that we have not created a negative effect on PP F&F-just not worth the trouble in most cases. If loads of us go to F&F maybe a problem. If those this law is after to collect from go to F&F definitely a problem.
 
Thanks for all who have replied. The main thing I have got out of all of this is that I - an individual trying to have a hobby - selling off items I don't want anymore, that I purchased new, at retail, is now a business activity and I have to prove I sold at a loss. What a sad state.

A short peek into the future
"Hey man you got a dollar?"

"Let's say we split the IRS gift tax and I give you fifty cents?"
 
Lots of interesting questions and options posed here.

Collecting sales taxes usually only applies after one has done a certain $$ value in any given state so usually not an issue until you become a larger "business". This is why some real dealers collect taxes for some states and others do not. Having a physical Nexus in a state is no longer the only requirement for a sales tax obligation.

If your IRS return shows a different gross income amount than the 1099s indicate IRS will sometimes just calculate the tax and send a bill along with the nasty letter much like if you made an error on a return or forgot something (according to my CPA and personal experience with a boo boo I made many years ago). They are likely to do this only once before they feel it is intentional and penalties kick in.

I suspect if a person who normally did all G&S transaction with Paypal suddenly switches to many F&F payments or large amount to random people around the country it will trigger them to look further. Also getting a F&F transaction, using an online postage source to generate labels after each one where the funds are drawn from Paypal each time where a posatge sale follow every F&F transaction may make that F&F look more like a G&S transaction and create an issue.

The Schedule C thing is a business IRS form and typically requires a Schedule SE, self employment tax form too (Social Security @ 16%) as well as inventory obligations. You can deduct inventory you buy all year but at years end any unsold inventory gets counted and entered on the Schedule C and no longer becomes a deduction until the year it is actually sold. Also as a business I think you can only claim a loss for up to three years, after that I don't think IRS will recognize it as a viable business anymore.

With all the ways scammers can access information online (passwords and pin numbers) and the number of people doing online banking not sure I want to mail a personal check to anyone so they have my checking account and routing numbers.
 
Don't have a issue paying taxes but I do have a problem that they wont figure in inflation:

We bought a whatchamacallit for $200 in 1992 and sale now for $300. We have to pay taxes on the $100 we "made" even though according to the inflation calculator $200 in 1992 is equal to $396 today. Were paying taxes but we actually lost money.
 
ToxicBot11 said:
Don't have a issue paying taxes but I do have a problem that they wont figure in inflation:

We bought a whatchamacallit for $200 in 1992 and sale now for $300. We have to pay taxes on the $100 we "made" even though according to the inflation calculator $200 in 1992 is equal to $396 today. Were paying taxes but we actually lost money.
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Fair concern, but I don't think inflation is ever factored in when calculating profits or losses on any sort of investment. Even just in a savings account these days I'm certainly losing to inflation but still paying capital gains tax on the (tiny tiny tiny bit of) interest. Same deal.
 
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