Tax Changes Are Taxing, Part Two...

umtrr-author Feb 3, 2022

  1. umtrr-author

    umtrr-author TrainBoard Member

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    A while ago I posted some general information on how electronic payment processors will be obligated to report transaction totals to the IRS starting this year, and that it was on YOU to prove that it wasn't all income. That thread got locked after some TB policy violating-posts. (Mods, please feel free to lock this thread straight away if you'd like. I won't be insulted.)

    The first notification I received about this comes from Square. The following is directly from their updated Terms of Service. Note that there is NO provision for exceptions to reporting of dollars received by you... as I noted previously, hope you like paperwork cause there's going to be a lot of it.

    And I just LOVE the last sentence in this gobbledygook. They are claiming that they have no obligation to tell you what they told the IRS!

    So the headline here is, "Cold hard cash makes comeback... film at 11."
     
  2. rray

    rray Staff Member

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    Counter attack... I will only sell stuff my old stuff for cash or trade. No receipts. No convenience pay services, which is probably why paypal took a hit dropping from $300 to $120 so far this year! Every time some government $#!t$ comes up with what they think is a money making scheme, it takes lots of legitimate businesses down, and adds to the burden of regular citizen daily life. We need to bring up all those involved in that that income reporting scam on charges!
     
  3. Traindork

    Traindork TrainBoard Member

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    Isn't there a plan to hire thousands more IRS agents? I'm all for catching tax cheats, but this seems more like government sticking their noses into every little transaction in the hopes of collecting every penny it can. Just seems very intrusive and onerous.
     
  4. NtheBasement

    NtheBasement TrainBoard Member

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    From what I've read the IRS isn't interested in peanuts; just report it as "hobby income". Their target is the $100K+/year resellers who make more than people with paychecks yet pay zero taxes. Don't see why I have to subsidize them.
     
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  5. umtrr-author

    umtrr-author TrainBoard Member

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    If the IRS were not interested in peanuts, the threshold for a 1099-R would not have been reduced from $20,000 to $600 and the transaction floor would not have been lowered from where it was to precisely one transaction.

    I could put on my Ruthless MBA hat and go farther, but we'd rapidly be going out of scope of this board.
     
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  6. BoxcabE50

    BoxcabE50 HOn30 & N Scales Staff Member TrainBoard Supporter

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    Unfortunately..... :( Please, let that not happen.
     
  7. Hardcoaler

    Hardcoaler TrainBoard Member

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    I suppose that the tax consequences could be reduced by somehow providing documentation on what we paid for an item, but how many of us have that information for our old trains or railroad memorabilia? A magazine ad from a 1986 Model Railroader? Gimme a break.
     
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  8. Shortround

    Shortround TrainBoard Member

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    The IRS isn't the only one to do this. The State of Wisconsin order that I sell my vehicles. The 22 year old Dakota 4x4 was worth $3,800. Sold for $500. The 14 year old 50cc scooter was worth $1250. New it was $700 and sold for $150. So they claim I made $4400 more and had to claim it all in state income taxes.
     
  9. DCESharkman

    DCESharkman TrainBoard Member

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    Perhaps we should boycott buying and selling anything. That way there is no sales tax collection and no taxes collected on resales.

    Back to the frontier days and the barter system! No place is worse on taxing than California!
     
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  10. DCESharkman

    DCESharkman TrainBoard Member

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    My Grandfather had a saying "To find a more crooked place than Stuart Virginia, you had to go to a bigger one", I guess he may have meant Wisconsin in this case.
     
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  11. RBrodzinsky

    RBrodzinsky November 18, 2022 Staff Member TrainBoard Supporter In Memoriam

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    Just a point of clarification - the tax laws have not changed on this; just the transaction limit the IRS is asking these monetary transaction businesses (Square, PayPal, etc) to report. The last major change in this area was the 2017 tax changes, which eliminated "miscellaneous deductions", so that hobby expenses could no longer be used to offset hobby income.

    As to selling a used item: if you acquired for personal use, and later sell for less than what was paid, you do not owe any taxes on the received payment. But, if you are trying to make a profit....
     
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  12. 308GTSi

    308GTSi TrainBoard Member

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    We had a Federal politician here, Australia, that wanted to introduce a "Transaction Tax". All other taxes would be scrapped. The idea was all cash was removed and the new tax would detect money from crime moving around and initially tax it.

    You can probably already see huge flaws like criminals using gold and off shore accounts instead of cash.

    An obvious bad side effect would be I couldn't even lend a family member $1 without it being taxed.

    I hope this isn't your IRS moving toward a similar goal.
     
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  13. u18b

    u18b TrainBoard Supporter

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    Could someone post a link to the first thread?
     
  14. 308GTSi

    308GTSi TrainBoard Member

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  15. DCESharkman

    DCESharkman TrainBoard Member

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    Perhaps we need to move to the barter system for our hobby transactions.

    Example - I have a Kato/ConCur NYC Hudson with DCC installed, programmed and tested. Runs like a top. I do not need it in my changing vision of my trains, but I could use XXXX. Anyone interested? sort of thing....... If no cash is transacted, there is no tax basis.

    Personally I am tired of all the taxes that popup out of nowhere. This is where we need cooler heads and more ingenuity than the politicians.

    The IRS can not create taxes, only Congress can! Just remember that the next time you vote!
     
  16. umtrr-author

    umtrr-author TrainBoard Member

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    All true... but...

    If you are audited, you would have to prove the "cost basis" that showed that you did not make any money. (It was pointed out in the previous thread that there is a way around this.) Unless you can prove and document otherwise, the IRS considers your cost basis for a sold item is ZERO.

    Presuming that you have this, unless you "feel lucky" when you get a 1099-R from electronic payment and choose not to report it, there is likely a Schedule C in your future. I have done these and they are no fun.

    As noted above, I'm sure we all kept painstaking records of when we bought that AB&C Railroad 0-2-0 in the year 19-something.

    On the other hand, perhaps this is where the Collector Guides could be useful... see, this says that this item is worth $$$$$! And I only got zzz for it.
     
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  17. umtrr-author

    umtrr-author TrainBoard Member

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    The State decided that the "book value" was the basis of your "income"? Haven't they ever heard of receipts?
    Never mind, I'll withdraw the question... :censored:
     
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  18. Shortround

    Shortround TrainBoard Member

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    I had ALL the purchase and maintenance paper work for both. Now the new owners have them and sales receipts. After they were examined.
    Haven't paid fed or state income taxes for 10 years. :cool:

    Richard
     
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  19. Christopher Lee

    Christopher Lee TrainBoard Member

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    Well of course, the government crushed revenues with the "scamdemic" by crushing small businesses and revenues plummeted. So the piggybank is empty.

    An eBay seller just told me about the any revenue over $600 from sales must be reported.

    Like the guy above said, we'll just go even more underground with sales.

    I love the fact that they think they can regulate a decentralized currency like BTC. BAHAHAHAAHA.
     
  20. BoxcabE50

    BoxcabE50 HOn30 & N Scales Staff Member TrainBoard Supporter

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