Attention UPDATED EXCHANGE RULES

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rje58 said:
I agree with you 100%! Until recently, I 100% insisted on G&S - whether buying or selling. However, the new laws regarding issuance of 1099s for cumulative annual amounts over $600, and the resulting classification as a business of hobbyists -- OR -- the massive amount of time, energy and potentially, money (if your accountant is handling this for you) required to AVOID being taxed on sales where no profit is made --AND-- go thru the hoops to ensure that you are NOT classified as a business.... WOW!

I think for many people, they'd take a chance of being screwed out of a coupla hundred (or less) for a knife, instead of getting the SURE THING 'financial and legal equivalent' of brutal assault by the government --OR-- spending the massive amount of time, energy and potentially, money (if your accountant is handling this for you) required to AVOID it.
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The real "brutal assault from government" comes when they realize you're evading taxes by selling things using Paypal Friends and Family. That's when you either go to prison, or are fined so heavily that your standard of living dramatically decreases. My feeling is that anyone willing to cheat the government, which has the power to throw you in prison or otherwise destroy your life, is even more willing to cheat me, a person with no power to punish those who would cheat me.

I was in business as a commercial photographer for 25 years, now retired. I paid my taxes. They were not be any means the biggest cost of doing business for me; and aside from that I find the idea of being in prison distasteful, so I obeyed the law. If you're middle class, the amount of taxes you'd owe on knife sales would likely be a few hundred bucks off your tax refund, and that's if you sell a lot of knives, and don't itemize deductions and show that you made no or very little profit. If you're wealthy, you probably won't notice the difference at all, and if you're poor you probably won't owe anything anyway. I've found that honesty in my treatment of clients, the government, and the wider community in which I live gave me an advantage over some of my competitors. That means I made more money than dishonest people did. It also set an example for my son, who is now at 26 a very successful self-employed commercial illustrator. I raised him by myself with no involvement from his mother, so I was the only example he had.

This isn't directed personally at you, rje58. I quoted your post simply because you had a good explanation of why people are demanding F&F payments now.
 
chriscrawfordphoto said:
The real "brutal assault from government" comes when they realize you're evading taxes by selling things using Paypal Friends and Family.
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Evading Taxes? Most of the sellers here are selling at a loss. It's not a business for most private sellers, so should we be forced to keep up with every sale and report to the IRS? If we buy/sell using a money order should we report it to the IRS? Would you? These are personal transactions, not for profit. If you are in business for profit I agree with you.
 
PayPal doesn't report profit or loss so it is a pain point that changes will report full sale value ignore any adjustments and represent the full value as profit.
 
chriscrawfordphoto said:
The real "brutal assault from government" comes when they realize you're evading taxes by selling things using Paypal Friends and Family. That's when you either go to prison, or are fined so heavily that your standard of living dramatically decreases. My feeling is that anyone willing to cheat the government, which has the power to throw you in prison or otherwise destroy your life, is even more willing to cheat me, a person with no power to punish those who would cheat me.

I was in business as a commercial photographer for 25 years, now retired. I paid my taxes. They were not be any means the biggest cost of doing business for me; and aside from that I find the idea of being in prison distasteful, so I obeyed the law. If you're middle class, the amount of taxes you'd owe on knife sales would likely be a few hundred bucks off your tax refund, and that's if you sell a lot of knives, and don't itemize deductions and show that you made no or very little profit. If you're wealthy, you probably won't notice the difference at all, and if you're poor you probably won't owe anything anyway. I've found that honesty in my treatment of clients, the government, and the wider community in which I live gave me an advantage over some of my competitors. That means I made more money than dishonest people did. It also set an example for my son, who is now at 26 a very successful self-employed commercial illustrator. I raised him by myself with no involvement from his mother, so I was the only example he had.

This isn't directed personally at you, rje58. I quoted your post simply because you had a good explanation of why people are demanding F&F payments now.
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They aren’t going to “throw people in prison” for selling a handful of pocket knives on the internet for a 20% loss. Worse case scenario they audit you and make you pay taxes if you can’t prove the loss. The trigger for an audit would most likely be if you received a 1099 and didn’t report it on your taxes.. because that would be dumb, since PayPal will send a copy to the IRS the same time they send one to you.
 
richtrix said:
Evading Taxes? Most of the sellers here are selling at a loss. It's not a business for most private sellers, so should we be forced to keep up with every sale and report to the IRS? If we buy/sell using a money order should we report it to the IRS? Would you? These are personal transactions, not for profit. If you are in business for profit I agree with you.
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THIS!!

C chriscrawfordphoto

I do NOT cheat on my taxes! As richtrix and PirateSeulb so accurately pointed out - and as would have also been evidenced if you have bothered to actually pay attention to the previous posts in the thread - the new rule reports 100% of the sale transaction as "income"!?!? and YES, 95-plus percent of the time, I'm selling knives for less than I paid for them - sometimes less than half of what I paid! So there is NO PROFIT to be taxed on! The Catch-22 of the government is - once you get a 1099 form, if you provide proof that you ARE NOT MAKING ANY MONEY by using receipts, etc. then you still run the risk of GETTING CLASSIFIED AS A BUSINESS! Which, if it happens, presents the HOBBYIST with a whole new set of headaches and potential problems!

Feel free to apologize for insulting us and making false statements about us, at your leisure.
 
Chris, I think we're on different pages here. I wasn't accusing anyone one of anything. I'm just saying that WE ARE NOT IN BUSINESS and shouldn't have to prove anything to buy sell and trade for a hobby. I don't see how you were offended by what I said. We are NOT EVADING TAXES because we are not in business for profit. Oh, I'M SORRY.
 
richtrix said:
Evading Taxes? Most of the sellers here are selling at a loss. It's not a business for most private sellers, so should we be forced to keep up with every sale and report to the IRS? If we buy/sell using a money order should we report it to the IRS? Would you? These are personal transactions, not for profit. If you are in business for profit I agree with you.
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If you lost money, you deduct the loss. This isn't rocket science. The fact that so many of you are so adament about evading your responsibility says all we need to know about your integrity.

• Using Paypal F&F violates Paypal's terms of service.

• It violates the law.

• It makes it easy to cheat your buyers.

Anyone demanding a F&F payment is dishonest. Full stop, end of discussion. Doing business with someone who is already violating a legally binding agreement (with Paypal) and violating the law, is too risky. There's no reason you wouldn't cheat me, too.
 
chriscrawfordphoto said:
The real "brutal assault from government" comes when they realize you're evading taxes by selling things using Paypal Friends and Family. That's when you either go to prison, or are fined so heavily that your standard of living dramatically decreases. My feeling is that anyone willing to cheat the government, which has the power to throw you in prison or otherwise destroy your life, is even more willing to cheat me, a person with no power to punish those who would cheat me.

I was in business as a commercial photographer for 25 years, now retired. I paid my taxes. They were not be any means the biggest cost of doing business for me; and aside from that I find the idea of being in prison distasteful, so I obeyed the law. If you're middle class, the amount of taxes you'd owe on knife sales would likely be a few hundred bucks off your tax refund, and that's if you sell a lot of knives, and don't itemize deductions and show that you made no or very little profit. If you're wealthy, you probably won't notice the difference at all, and if you're poor you probably won't owe anything anyway. I've found that honesty in my treatment of clients, the government, and the wider community in which I live gave me an advantage over some of my competitors. That means I made more money than dishonest people did. It also set an example for my son, who is now at 26 a very successful self-employed commercial illustrator. I raised him by myself with no involvement from his mother, so I was the only example he had.

This isn't directed personally at you, rje58. I quoted your post simply because you had a good explanation of why people are demanding F&F payments now.
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Taxation is theft!
 
Gentlemen...less politics and more matters relevant to this site and its administration please.

We are not going to fix the tax code or reinvent the wheel here. Let's try to discuss matters which apply to the "Exchange".
 
In regards to the exchange, you will need to keep records of the price paid or value of the knife.

When using PayPal, anything over 600 bucks of transactions will need to be filed.

You won't be able to claim a loss unless your selling as a business, but will have to pay tax on capital gains as an individual.
 
As it pertains to the exchange, I’m not so “black and white” as to label members as cheaters, scammers, liars and thieves because they do f&f. That’s a broad brush and a heavy dose of judgement. Literally no one is on board with what is being done. Accept the risk or buy from a store. Complaining about how other people run their transaction is pointless. It’s their knife. If you want to buy it, play by their rules. If you don’t want to, don’t buy it.
 
MolokaiRider said:
In regards to the exchange, you will need to keep records of the price paid or value of the knife.

When using PayPal, anything over 600 bucks of transactions will need to be filed.

You won't be able to claim a loss unless your selling as a business, but will have to pay tax on capital gains as an individual.
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“Gains” is the net positive difference to price paid vs. price sold. If you don’t make a dime on the knife, you don’t pay tax on gains. But like all things, it will need to be proven. Remember what you paid, and what you sold for. Note the transaction and save the photos. The 1099 will list the full amount and you will have to pay as a gain unless you can prove otherwise.
 
chriscrawfordphoto said:
If you lost money, you deduct the loss. This isn't rocket science. The fact that so many of you are so adament about evading your responsibility says all we need to know about your integrity.

• Using Paypal F&F violates Paypal's terms of service.

• It violates the law.

• It makes it easy to cheat your buyers.

Anyone demanding a F&F payment is dishonest. Full stop, end of discussion. Doing business with someone who is already violating a legally binding agreement (with Paypal) and violating the law, is too risky. There's no reason you wouldn't cheat me, too.
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@ C chriscrawfordphoto

Your entitled to your opinion, but insulting people for disagreeing with you is rude and making false claims against them is ILLEGAL under civil law. MAKING FALSE CLAIMS about me and others that we are CHEATING ON OUR TAXES tells us ALL WE NEED TO KNOW about YOUR INTEGRITY!

If I was arrogant, obnoxious and sure that I was right and everyone else is wrong, I would put something here like "Period OUT! End of story!" But since I'm not, I won't.

Nobody can DEMAND payment by ANY method. They can request it, or make it a requirement of doing a transaction with them, but that's hardly "demanding" anything. Everyone has the freedom to decline any terms they don't agree with.

I have a 100% positive feedback score here on Bladeforums, with over 100 transactions, at least 20 or more I was the SELLER, and I always asked for payment G&S. I would never buy or sell by F&F. The problem is now, the government is taxing us 100% on sales where we LOSE money, UNLESS we are willing to file our tax returns using a form that ONLY APPLIES TO BUSINESSES - not hobbyists, or individual citizens not engaged in business.

END RESULT: I buy a knife for $185 and decide to sell it for $130 after I have it for awhile. But if I sell it G&S, I only have two options: 1 - Pay tax on the full $130 as INCOME -or- 2 - file my taxes with proof of my purchase and sale dates and prices, on a tax form reserved ONLY FOR BUSINESSES. This has all kind of potential negative consequences for individuals / hobbyists, which I assume any accountant will be glad to take your money to explain to you, the way that mine did.
 
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rje58 said:
@ C chriscrawfordphoto

Your entitled to your opinion, but insulting people for disagreeing with you is rude and making false claims against them is ILLEGAL under civil law. MAKING FALSE CLAIMS about me and others that we are CHEATING ON OUR TAXES tells us ALL WE NEED TO KNOW about YOUR INTEGRITY!

If I was arrogant, obnoxious and sure that I was right and everyone else is wrong, I would put something here like "Period OUT! End of story!" But since I'm not, I won't.

Nobody can DEMAND payment by ANY method. They can request it, or make it a requirement of doing a transaction with them, but that's hardly "demanding" anything. Everyone has the freedom to decline any terms they don't agree with.

I have a 100% positive feedback score here on Bladeforums, with over 100 transactions, at least 20 or more I was the SELLER, and I always asked for payment G&S. I would never buy or sell by F&F. The problem is now, the government is taxing us 100% on sales where we LOSE money, UNLESS we are willing to fill our tax returns using a form that ONLY APPLIES TO BUSINESSES - not hobbyists, or individual citizens not engaged in business.

END RESULT: I buy a knife for $185 and decide to sell it for $130 after I have it for awhile. But if I sell it G&S, I only have two options: 1 - Pay tax on the full $130 as INCOME -or- 2 - file my taxes with proof of my purchase and sale dates and prices, on a tax form reserved ONLY FOR BUSINESSES. This has all kind of potential negative consequences for individuals / hobbyists, which I assume any accountant will be glad to take your money to explain to you, the way that mine did.
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YOU are the one violating Paypal's terms of service.

YOU are the one trying to circumvent tax law. THAT is a lack of integrity. Sorry. You don't like it, change how you conduct yourself.
 
MolokaiRider said:
In regards to the exchange, you will need to keep records of the price paid or value of the knife.

When using PayPal, anything over 600 bucks of transactions will need to be filed.

You won't be able to claim a loss unless your selling as a business, but will have to pay tax on capital gains as an individual.
Click to expand...

If you sell at a loss, as so many on here claim to be doing, there is no capital gain and no tax owed.
 
King of the Cheese said:
“Gains” is the net positive difference to price paid vs. price sold. If you don’t make a dime on the knife, you don’t pay tax on gains. But like all things, it will need to be proven. Remember what you paid, and what you sold for. Note the transaction and save the photos. The 1099 will list the full amount and you will have to pay as a gain unless you can prove otherwise.
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chriscrawfordphoto said:
If you sell at a loss, as so many on here claim to be doing, there is no capital gain and no tax owed.
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You are both correct, that's why I typed it.

😂

Gains...pay tax. Loss, can't do anything as an individual.
 
chriscrawfordphoto said:
If you sell at a loss, as so many on here claim to be doing, there is no capital gain and no tax owed.
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True, but you still have to deal with the 1099K that you'll receive. Can't just ignore it because you know you sold at a loss and don't owe any tax. The IRS doesn't know that, so you have to prove it.
 
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