Sellers want their cake & eat it too now..

[RedB4Black]

Everything goes to the same line of deduction if you don’t have a tax ID regardless of what you call it. I do believe we agree and are saying the same thing - It all boils down to how much product you’re moving and whether you itemize your taxes. Itemize? Likely a business model. Standard deduction? Hobby - likely a waste of time.

I’m not a tax specialist so everyone should do their own research but this is what I get from the new law changes.

I've been a CPA for 29 years...but everyone should consult their own tax advisor. In simplistic terms, most people here would fall into the hobby realm, so they shouldn't worry about thinking they're gonna deduct any losses. For the few that are actually trying to profit or actually profiting, then they have a justification for calling themselves a business...but there are other issues that must be dealt with at that point.

 

[Meeotch]

I've been a CPA for 29 years...but everyone should consult their own tax advisor. In simplistic terms, most people here would fall into the hobby realm, so they shouldn't worry about thinking they're gonna deduct any losses. For the few that are actually trying to profit or actually profiting, then they have a justification for calling themselves a business...but there are other issues that must be dealt with at that point.

So are you saying that if I've sold a handful of things on Ebay/Reverb totaling a loss, it's not worth my time trying to deduct those losses? I just input my 1099-K and eat shit?

 

[RedB4Black]

So are you saying that if I've sold a handful of things on Ebay/Reverb totaling a loss, it's not worth my time trying to deduct those losses? I just input my 1099-K and eat shit?

Unless you are a business, they're not deductible. Current tax law for 2022 says you must report gains in income on a gross basis. Just because you get a 1099-k, doesn't mean you have a tax liability. If you sold an amp for $2000 and get a 1099-K for that amount of proceeds, that would be reportable, but if you paid $3000, you'd have a loss of $1000. You wouldn't have any tax liability. You aren't gonna get to deduct the $1000 as a loss on your taxes though. Under tax law applicable in prior years (2018 and before) you were allowed to take a miscellaneous itemized deduction for hobby losses - but there was a 2% threshold (>2% of AGI) before they were beneficial. Plus you had to itemize.

 

[Cap217]

Unless you are a business, they're not deductible. Current tax law for 2022 says you must report gains in income on a gross basis. Just because you get a 1099-k, doesn't mean you have a tax liability. If you sold an amp for $2000 and get a 1099-K for that amount of proceeds, that would be reportable, but if you paid $3000, you'd have a loss of $1000. You wouldn't have any tax liability. You aren't gonna get to deduct the $1000 as a loss on your taxes though. Under tax law applicable in prior years (2018 and before) you were allowed to take a miscellaneous itemized deduction for hobby losses - but there was a 2% threshold (>2% of AGI) before they were beneficial. Plus you had to itemize.

But you can use that $1000 loss towards gains on other gear you sold right?

I think we are saying the same thing except you think we are saying if you had a job making 100k a year. Bought and sold gear for a loss of 5k. You can’t write that 5k off your w2 income.

 

[RedB4Black]

But you can use that $1000 loss towards gains on other gear you sold right?

I think we are saying the same thing except you think we are saying if you had a job making 100k a year. Bought and sold gear for a loss of 5k. You can’t write that 5k off your w2 income.

No. You can't offset the gain with a loss. If you had $1000 in losses and $3000 in gains. You'd have taxable income of $3000 - not $2000. You can't offset the gains with losses. You report gross gains as income. There is no place to deduct losses - unless you are a business... which most people aren't.

 

[Cap217]

No. You can't offset the gain with a loss. If you had $1000 in losses and $3000 in gains. You'd have taxable income of $3000 - not $2000. You can't offset the gains with losses. You report gross gains as income. There is no place to deduct losses - unless you are a business... which most people aren't.

So you are stating that every sale has a gain or loss. You can’t add these up and pay on net gain or loss.

1
So if I buy a guitar for 1,000 and sell it for 1,100 I get a 1099k or even if cash deal, I owe tax on $100. This makes perfect sense.

2
If I buy a guitar for $1,000 and sell for $800. I get a 1099k for 800. But I need to be able to prove I paid $1,000. What if this was 8 years ago? Either way, I don’t owe tax.

3
I buy 10 guitars for $1,000 totaling $10k. I then sell these all in 2022 for (make this easy) I sold 1 guitar for 5,000 and the other 9 for $100. For a total of 5,900.

I then owe tax on the ones that had a gain individually and can’t use the losses to offset the 1 gain. So even though I lost 4,100 I actually owe taxes on the 4,000 gain of the one guitar.

 

[Smashedguitaris⸸]

They're behavior is equally offensive. They, (not all, but many), come off with an increased sense of entitlement. Like you owe them, and must meet their demands to purchase from them. Who's doing who a favor these days? Apparently, it's become overly one-sided. Long gone are the days of mutual satisfaction, and reasonableness.

I take a bath on items at times on Reverb. But, if I'm unreasonable with an asking price, you just get 50 "watchers", waiting for you to come to your senses. In alot of cases, 50% of those "watchers" are waiting for you to give the item away, so take that with a grain of salt. Point being, I pay the fees to use their platform. It eats into your net sale, sure, but that's my problem, not the buyer's.

I am going to be honest. And it is going to piss some people off. But when i was a kid, i learned how to walk away from a deal. When i grew up, i took advantage of those that couldn't. It is business and it is ugly. I don't deal with people on the forum like that. But it is how i do business, and i rarely get fucked. I think there should be a code for rig-talk. So I follow one here. But reverb, I have never lost money on gear aquisition.

 

[RedB4Black]

So you are stating that every sale has a gain or loss. You can’t add these up and pay on net gain or loss.

1
So if I buy a guitar for 1,000 and sell it for 1,100 I get a 1099k or even if cash deal, I owe tax on $100. This makes perfect sense.

2
If I buy a guitar for $1,000 and sell for $800. I get a 1099k for 800. But I need to be able to prove I paid $1,000. What if this was 8 years ago? Either way, I don’t owe tax.

3
I buy 10 guitars for $1,000 totaling $10k. I then sell these all in 2022 for (make this easy) I sold 1 guitar for 5,000 and the other 9 for $100. For a total of 5,900.

I then owe tax on the ones that had a gain individually and can’t use the losses to offset the 1 gain. So even though I lost 4,100 I actually owe taxes on the 4,000 gain of the one guitar.

Correct. You can't aggregate transactions. Each item you sell is treated individually. If a particular item has a gain... that's taxable, without any regard to any other transactions that have losses.

Technically you'd need to substantiate the cost basis on anything the IRS may ask for. Who knows how they would deal with something you bought 8 years ago with no receipt. The could basically make you pay tax on all of it, but more likely would work with you to establish a reasonable cost basis. If you know you had a loss on something, then put your basis as higher. It really only matters if you get audited...which isn't likely unless the current administration gets their wish to hire 89000 new agents to audit all the billionaires. lol

 

[midnightlaundry]

Look at this piece of shit..

https://detroit.craigslist.org/wyn/msg/d/northville-vintage-1979-marshall-1960a/7433055417.html

 

[Philo Beddoe]

No. You can't offset the gain with a loss. If you had $1000 in losses and $3000 in gains. You'd have taxable income of $3000 - not $2000. You can't offset the gains with losses. You report gross gains as income. There is no place to deduct losses - unless you are a business... which most people aren't.

Fun Fact: The IRS does not (AFAIK) figure in the effects of inflation.---> You bought a thingamajig for $600 in 1992 and sale now for $900. According to the inflation calculator $600 in 1992 is equal to $1200 today. We have to pay taxes on the $300 we "made" even though we actually lost money.
Unless you kept the receipt for 30 years you be paying.

 

[Mailman1971]

I haven’t sold stuff in long time. Did trades. People I know. I used to think of Ebay as a electronic Garage sale. Got something. Wanna sell it. Pay the fees done. This new irs tax stuff seems a bit much to me. So if I sold a rig out my front yard I gotta report income? Maybe I’m reading too much. Ot not enough in to all this.
I got lot things I wanna sell but fuck if I’m paying income tax on it.

 

[alan67]

I haven’t sold stuff in long time. Did trades. People I know. I used to think of Ebay as a electronic Garage sale. Got something. Wanna sell it. Pay the fees done. This new irs tax stuff seems a bit much to me. So if I sold a rig out my front yard I gotta report income? Maybe I’m reading too much. Ot not enough in to all this.
I got lot things I wanna sell but fuck if I’m paying income tax on it.

I hear ya...I'm in the same boat, have a lot of things I'd like to sell but I just don't want to fuck with any tax stuff, so it'll just sit.