Taxes and Form 1099-K from Reverb

[frontline205]

Hey guys I know I'm not the only one here whos does their own taxes, or sales on reverb (a lot). I'm finishing up filing and I sold a whopping 20k on reverb. However I sold at a loss. Tax slayer wanted me to do a schedule C. That actually brought my tax bill down a bit. Now can I use a schedule C, or because I'm not an official business I'd get in trouble. Probably a bit of an advance question on Rig-talk but figure I'd give it a shot LOL

 

[311boogieman]

*Reported

Wrong forum





just kidding, but it is very much On Topic. I'd post your question in the Main forum so more people see it.

 

[frontline205]

I’ll do that

 

[NowYou'rePlayingWithPower]

Schedule D, not C. You are on the hook for profits on any individual item. A loss on one item does not negate profits from another item because you're not a business (or at least I assume you're not given your statement that you're not).

Ie;

Bought item A for $1000 sold for $800 = no taxes
Bought item B for $1000 sold for $1,200 = taxes on the $200
Item A's loss does not negate the taxes owed on item B.
Make sure to account for things like shipping and taxes you paid when putting in your costs.

 

[frontline205]

Schedule D, not C. You are on the hook for profits on any individual item. A loss on one item does not negate profits from another item because you're not a business (or at least I assume you're not given your statement that you're not).

Ie;

Bought item A for $1000 sold for $800 = no taxes
Bought item B for $1000 sold for $1,200 = taxes on the $200
Item A's loss does not negate the taxes owed on item B.
Make sure to account for things like shipping and taxes you paid when putting in your costs.

I didn’t think about shipping appreciate that

 

[NowYou'rePlayingWithPower]

I didn’t think about shipping appreciate that

Both your sales tax/shipping costs to increase your costs and reverb fees/shipping costs on the sale to decrease your profits.

So if you bought an item for $1000, and your sales tax was 5% ($50) and you paid $50 to have it shipped to you, the item's cost was $1,100 not $1000.
If you sold it for $1,200 shipped, subtract reverb fees and whatever it cost you to ship from your $100 profit and the difference is what you owe taxes on (not the entire amount, let's just say you netted $20, for example) You would pay taxes on that $20.

 

[frontline205]

Both your sales tax/shipping costs to increase your costs and reverb fees/shipping costs on the sale to decrease your profits.

So if you bought an item for $1000, and your sales tax was 5% ($50) and you paid $50 to have it shipped to you, the item's cost was $1,100 not $1000.
If you sold it for $1,200 shipped, subtract reverb fees from your $100 profit and the difference is what you owe taxes on (not the entire amount, let's just say you netted $20, for example) You would pay taxes on that $20.

Well let’s say I sold the whole item at a loss. Is it zero’d out?

 

[NowYou'rePlayingWithPower]

Well let’s say I sold the whole item at a loss. Is it zero’d out?

Yes you owe nothing, but that doesn't affect the profit of another item since you're not a business, if that makes sense.

 

[NowYou'rePlayingWithPower]

If this helps simplify it;

Item A sold at a loss of $500
Item B profited $100
Item C sold at a loss of $1,000
Item D profited $500

You would owe taxes on $600.