StockX and GOAT will die out for sellers due to Biden's American Rescue Plan Act

frankmatthews said:
Unfortunately I think the payment processor decides which 1099 form they file for you. But like I said, the above indicates you would need to itemize deductions to get the cost of goods subtracted out. But since the standard deduction for single people in 2022 is $12,950, you would need receipts for qualifying deductions greater than that amount for itemizing to have any benefit. And trust me, its a headache putting together all those receipts. But again, with an llc you can subtract your costs and expenses right off the top line AND still get standard deductions after that.
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1099-K is the form. You shouldn't have to itemize to claim certain deductions, in this case cost of goods sold. You just can't claim other expenses or a loss

A 1040 and schedule showing 1. gross income 2. cogs should be enough to keep you safe in an audit. These companies report gross because that's the info they have but that's not necessarily the taxable amount

Bubbletea Bubbletea poses an interesting question, of what if proceeds are kept in GOAT credit
 
superblytrife said:
^ Isn’t it $600 or more for ALL sales that triggers the 1099? So you could sell 100 items with total sales under $600 and not get a 1099, or 1 item for over $600 and get a 1099. That’s how I understand it anyways.

Whatever the case this law sucks. Should’ve sold some of my high dollar **** last year.
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It’s $600 total for all sales? Lmao damn. Idk. I thought it was $600 per item or sale or $20,000 total In sales will make you get a 1099K.
 
SAINIDIIvIIAINI said:
You guys are missing the rules. Its $600 total profit period in a year no matter how many transactions it is. See below

Example 1:
I buy a shoe for $100. I in turn sell this shoe for $500 and say thats all I did for the entire year. If I can show proof that I paid $100 for said shoe technically all I'm liable to pay taxes on the $400 profit. BUT, since the new threshold for reporting/paying taxes is $600 I can be lawless and not pay those taxes on $400.

Example 2:
I buy a shoe for $100. I in turn sell this shoe for $701. I show proof I bought the shoe for $100 now with a profit of $601 I will get a 1099 from whatever entity is responsible for giving me the 1099 and I will have to pay taxes on $601.

edit: The 20k a year and/or 200 transactions is null and void. Doesn't exist anymore. $600 a year and doesn't matter how many transactions you WILL pay taxes.
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I see. Damn smh.
 
Air Money said:
It’s $600 total for all sales? Lmao damn. Idk. I thought it was $600 per item or sale or $20,000 total In sales will make you get a 1099K.
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I think so. That's what I was asking in my previous post, and what I think is the real question here. But this is the copy/paste from the page someone posted:

""Now, as the result of a provision in the American Rescue Plan Act of 2021, if a TPSO—or its electronic payment facilitator, or EPF—makes payments totaling more than $600 in a calendar year to a payee, it will be required to report those payments on a Form 1099-K.""

If it was just sales of any shoe for more than $600 a pop, this wouldn't be an issue as the vast, vast majority of sales are surely of shoes between $100 & $300 or so. So it's $600 in sales period. You can't sell like eight hundred thousand $400 shoes and not report, haha
 
oh you mad said:
It was another proposal in addition to this..

abcnews.go.com

Biden admin backs down on tracking bank accounts with over $600 annual transactions

The Biden administration has backed down on a proposal to collect banking information on accounts with transactions over $600 per year.
abcnews.go.com abcnews.go.com
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I'm confused, so based on the abcnews link this isn't happening this year? heelsandeers heelsandeers

Also, if so, does this apply to PayPal gift, zelle, apple pay etc?

Because i heard last year it only applied to Goods & Services payments (like SX/Goat), but not F&F payments. Is that inaccurate?

Thanks.

PO
 
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po2345 said:
I'm confused, so based on the abcnews link this isn't happening this year? heelsandeers heelsandeers

Also, if so, does this apply to PayPal gift, zelle, apple pay etc?

Because i heard last year it only applied to Goods & Services payments (like SX/Goat), but not F&F payments. Is that inaccurate?

Thanks.

PO
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Which part are you referring to? There are two separate things happening here. Paying taxes on $600 profit and the IRS being able to see transactions coming into your bank acct in excess of $600. The latter is not happening, yet.

Paypal gift, zelle, etc doesnt apply. For instance we go to dinner I pay for dinner and you zelle me $40 for said dinner. It doesn't apply because that is not considered income. You're only getting taxed on profited income of $600 or more.
 
I'll even take it a step further for people still trying to off old shoes or old anything really...

Say you have a 10 pairs of older shoes you want to get rid of and for the sake of it say you have proof you paid $100 for each shoe. 2022 you sell all 10 pairs of shoes for $60 each making a total of $600. You will NOT have to pay taxes on that $600 because you have proof you paid $1000 for those 10 pairs. You did not make a profit you actually loss money.
 
heelsandeers said:
1099-K is the form. You shouldn't have to itemize to claim certain deductions, in this case cost of goods sold. You just can't claim other expenses or a loss

A 1040 and schedule showing 1. gross income 2. cogs should be enough to keep you safe in an audit. These companies report gross because that's the info they have but that's not necessarily the taxable amount

Bubbletea Bubbletea poses an interesting question, of what if proceeds are kept in GOAT credit
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Based on that quote you posted earlier the 1040 schedule you need to file to deduct cost of goods IS the itemized deductions schedule. You cant itemize deductions on the 1099 portion and take the standard deduction on any W2 income you have. All your income is lumped together then you can choose either itemized or standard deduction. And you'd have to come up with $12k in deductions to come out better than just taking the standard, which wouldn't allow you to get those costs out first.
 
I’m pretty sure you were always supposed to pay taxes on profits from selling new sneakers above retail.

Whether it triggers a form from the platform you use to sell or not, if you sold new shoes for profit you are supposed to pay taxes on that income.
 
dwalk31 said:
I’m pretty sure you were always supposed to pay taxes on profits from selling new sneakers above retail.

Whether it triggers a form from the platform you use to sell or not, if you sold new shoes for profit you are supposed to pay taxes on that income.
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Why?

We already paid taxes when we bought the sneakers. Why would I pay taxes again on said item?

****s dumb.

My fiance hit on some 13y patent breds for my son. He more than likely will need a 1y instead. If I sell my retail pair in order to buy a pair in his correct size (hard to find trades for kid sizes). Should I be penalized via taxes for this?

I get this is a small example but it happens all the time. I know dudes who take whatever size they can in effort to make trades into their size or to offset cost. That shodnt become a taxable offense imo.
 
sneakaprince said:
Why?

We already paid taxes when we bought the sneakers. Why would I pay taxes again on said item?

****s dumb.

My fiance hit on some 13y patent breds for my son. He more than likely will need a 1y instead. If I sell my retail pair in order to buy a pair in his correct size (hard to find trades for kid sizes). Should I be penalized via taxes for this?

I get this is a small example but it happens all the time. I know dudes who take whatever size they can in effort to make trades into their size or to offset cost. That shodnt become a taxable offense imo.
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You’re paying taxes again because you’re selling at a profit. It’s no different than any other business paying taxes on profits.

If they are used shoes that you aren’t selling at a profit, that’s different. But reselling limited goods, for more than retail, is a business.

Just to use your example, if you use your paycheck to buy the correct size instead, you still pay taxes on your earned income from your paycheck.

If someone has not been paying taxes on resell profit, they’ve just been not paying owed taxes. And could potentially get hit in an audit situation.

EDIT: a trade (shoe for shoe) is different. But if you’re selling the shoe for more than msrp, you owe taxes on the profit.
 
sneakaprince said:
Why?

We already paid taxes when we bought the sneakers. Why would I pay taxes again on said item?

****s dumb.

My fiance hit on some 13y patent breds for my son. He more than likely will need a 1y instead. If I sell my retail pair in order to buy a pair in his correct size (hard to find trades for kid sizes). Should I be penalized via taxes for this?

I get this is a small example but it happens all the time. I know dudes who take whatever size they can in effort to make trades into their size or to offset cost. That shodnt become a taxable offense imo.
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Your making profit real money no diff then buying a stock for 200 and selling for 400 or buying a car for 2k and selling it for 3k . What makes sneakers different if I buy a pair for retail and sell it for 3x
 
Whether it classifies as a business or not, you are supposed to pay taxes on the profits (no point in an individualized business vs. hobby discussion).

Same for selling stocks for gains. You have to pay taxes on that as well.
 
This reminds me of if you win a lottery prize. Anything $600 and up you have to pay taxes and claim it at the lottery claim center. Under $600 you can take it from a lottery retailer.
 
Yeah I won 10k on a scratcher in VA. Iirc my payout was 6700, they just took the taxes right out. I think I may have gotten some back when I did my taxes for that year. I can’t remember though.
 
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