Paypal 1099 From Gear Sales

Metlupass2

Well-known member
So apparently I sold a lot of gear in 2020 and now Paypal prepared a 1099 for me. Has anyone gotten one and not filed before?

I don't sell on reverb or ebay. All my sales were on forums and FB.
 
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xzyryabx

Well-known member
I got a request for that from Reverb....I think the requirements were over 20K sold or over 200 transactions in a year (federal req) or a lesser ammount required by your state....my state requires it for anything over 1K or so in sales.
Total bullshit...paying tax on the way in and the way out...so a second hand item can be taxed an unlimited amount of times as long a it keeps getting passed around.
 

LP Freak

Well-known member
I got a request for that from Reverb....I think the requirements were over 20K sold or over 200 transactions in a year (federal req) or a lesser ammount required by your state....my state requires it for anything over 1K or so in sales.
Total bullshit...paying tax on the way in and the way out...so a second hand item can be taxed an unlimited amount of times as long a it keeps getting passed around.
I posted something about this a while ago. And yes, you have to have had $20K in sales AND 200 transactions

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mhenson42

Well-known member
Just because you got a 1099 doesn’t me you owe taxes. You’d only owe tax if you sold something for a gain. The 1099 is only showing proceeds. Your risk is that you may have to prove your cost basis on whatever you sold if get audited. So you better keep records of that just in case, though the likelihood of being audited is minimal.
 

david(j)

New member
In my experience, you can balance the proceeds from these 1099s against any gear purchases made. I think most of us keep big item receipts, but you have proof of purchases in PayPal and Reverb, as well. I’m usually pretty close to net zero, so no real tax implications - you just need to show some paper trail.
 

glip22

Well-known member
Technically on a 10-99, you must claim it as income. At that point you can write off any losses and it negates the taxes on the amount. It's smarter to claim it, and write it off, than to not report it as income.
 

Markedman

Well-known member
Are they, the Government, assuming that we're now LLC's? Do we need to set up profit/loss bs so we can stop this?

Sure I sold a lot of stuff, both musical and tools but spent more on tools and gear than I sold but not as a business.
 

LP Freak

Well-known member
So where does the 200 transactions part kick in? I clearly didn’t have 200 transactions but still got a 1099.
 

Rick Lee

Well-known member
The biggest thing I paid cash for in 2020 was $1600. I did some work on it and later flipped it on Reverb for $2200. After fees, shipping and what I put into it, I may have netted $150-200, but I have no receipt from buying it, as it was a local cash deal from Facebook Marketplace. Anyway, I don't think I'm getting a 1099 from Reverb, PayPal or eBay this time. Mrs. Lee has in the past, though.
 

Fordman65

Active member
Well shit. I have to be close to $20k. The KL I sold was over $7k alone. What if different forms of payment were accepted? IE, Zelle, PayPal and Venmo. Guess I need to be on the look out. Sales tax, now this. Makes really think I'm just going to keep everything now.
 

Fordman65

Active member
If these are treated like a security, don't you need the cost basis? I loosely keep that, but nothing that would stand up.

If this is considered income, I sure as hell want the credit for any loss.
 

harddriver

Well-known member
I got a request for that from Reverb....I think the requirements were over 20K sold or over 200 transactions in a year (federal req) or a lesser ammount required by your state....my state requires it for anything over 1K or so in sales.
Total bullshit...paying tax on the way in and the way out...so a second hand item can be taxed an unlimited amount of times as long a it keeps getting passed around.
This is so bankrupt states reap tax off of private sales just like they are a business. All the items that were purchased new paid any state or local tax on them then. This is taxation with representation because your representatives allowed these laws to pass.
 
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