The Blues Lawyer explains new rules & regulations of buying and selling on reverb and other marketplaces.

[cardinal]

My understanding is that you get a list of your transactions and you pay tax on any of them based on the profit per transaction. If you didn't sell at a profit, there's no tax owed. But if audited, you will have to have some proof of it.

If you buy and sell through PayPal, Reverb, and or credit cards, you'll probably be able to piece the info together. If you also mix in case or trade transactions, it could get a bit harder to match everything up.

 

[EdwardSharpd]

Sad to hear that things might not be as straightforward as we thought. I'm going to consider this when it comes to my own sales and purchases.
As for the taxes, I think it's always best to consult with a professional or lawyer to make sure you're following the proper guidelines. It's better to be safe than sorry when it comes to financial matters. I'm also considering getting more involved in the precious metals market, so I'll be consulting with my military lawyers about any potential issues that might come up. It's always important to be informed and prepared.

 

[SpiderWars]

But you must be able to substantiate a cost basis otherwise you could be liable (if audited) for tax on the full proceeds.

That makes it seem like the IRS assumes the sold item was FREE when you got it. Which is not a reasonable assumption.

It seems there would/could/should be a fair market value that they would have to assume was originally paid for the sold item. Assuming it was free seems…criminal. And easily disputed.

 

[RedB4Black]

That makes it seem like the IRS assumes the sold item was FREE when you got it. Which is not a reasonable assumption.

It seems there would/could/should be a fair market value that they would have to assume was originally paid for the sold item. Assuming it was free seems…criminal. And easily disputed.

They don't have to assume anything. The taxpayer is the one who has to substantiate the basis. It they can't, then yes, the IRS can make you pay tax on the proceeds if they want to.

 

[Monkey Man]

Sad to hear that things might not be as straightforward as we thought.

Thankfully it's a straightforward matter to ban you, bot.

Bant!