The IRS and PayPal

invalid wrote: »

Everyone is just catching on now, you were supposed to pay taxes on that stuff all along if you made a profit.

There's the rub. I doubt anyone reported losses on such transactions in the past. Now (if/when this goes through), it will have to be reported either way - profit or loss - since the sales proceeds will be reported to the IRS. Will losses be allowed, and/or will losses over the annual limit be carried over to future years?

We all know that if you buy a brand-new piece of audio gear, you will undoubtedly incur a loss if you ever sell it...even six months after buying it. Determining cost-basis will be a b*i*a*t*c*h, since the IRS would likely say an item is fully-depreciated after only a few years, so ANY sales proceeds are 100% profit, and thus taxable. However, depreciation is not expensed/deducted by a taxpayer, UNLESS the item is considered a business asset.

If you think about it, just about any item you buy has already been taxed multiple times. The manufacturer is taxed on profit, the distributor is taxed, the retailer is taxed, and if the consumer sells it, now another layer of tax. And, every other owner of the item down the road gets taxed when a sale occurs.

Luckily, I can't imagine the IRS expending a lot of resources to chase-down potential tax revenue for small amounts reported on 1099K. But, the reporting requirements will create a lot of headaches for PayPal, and the taxpayers, to cover their arses.

Technically you are supposed to claim any money made off a garage sale even.

nooshinjohn wrote: »

I think that will depend on your voting habits for the last several election cycles, combined with your social credit score.

That is starting to sound like an episode of Black Mirror.