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New IRS reporting for 2021?
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559 posts in this topic

1 minute ago, NewWorldOrder said:

Cliff notes answer.   If you sell 5k of books on eBay I highly doubt you will be going to jail nor them bothering you lol

Remember 100k to you is a lot but .01 to them.

I think generally everyone knows what they have into anything they bought, so come up with a reasonable expense number and deduct from the gross sales and call it a life.  More than likely they wont come bothering you.  They could come looking at you if you have a 100k of eBay sales and didnt report any of it. 

hm   (thumbsu

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4 hours ago, rsouxlja7 said:

If you have owned the comic for one year - long term capital gains tax at 28% collectibles rate

If you have owned the comic less than one year - it goes on schedule C and taxed as ordinary income plus self employment tax

If you're in the business of selling comics and you have owned it more than one year - still goes on Sch C

This is the problem. Nobody is going to track $5-10 transactions like that let alone $100.

I was told to track my purchases for the year and use that to offset sales.

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32 minutes ago, ygogolak said:

This is the problem. Nobody is going to track $5-10 transactions like that let alone $100.

I was told to track my purchases for the year and use that to offset sales.

If you're using a Sch C you record your beginning inventory cost basis, add purchases for the year, and input ending inventory. So the way I do it is if I bought 1 collection during the year for $1000 that had 1000 books and I know I only have half the collection left then my remaining inventory is $500 and the cost of goods sold is calculated as $500. If you're a collector who might sell 100 books on ebay per year and you usually buy them at cover price then just make a spreadsheet when you make your sales and your basis is cover price plus sales tax. It's easy as long as you stay on top of it throughout the year. I ship around 300 packages/year and buy between 5-10 collections. I don't buy weekly at a comic shop. 

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6 minutes ago, rsouxlja7 said:

If you're using a Sch C you record your beginning inventory cost basis, add purchases for the year, and input ending inventory. So the way I do it is if I bought 1 collection during the year for $1000 that had 1000 books and I know I only have half the collection left then my remaining inventory is $500 and the cost of goods sold is calculated as $500. If you're a collector who might sell 100 books on ebay per year and you usually buy them at cover price then just make a spreadsheet when you make your sales and your basis is cover price plus sales tax. It's easy as long as you stay on top of it throughout the year. I ship around 300 packages/year and buy between 5-10 collections. I don't buy weekly at a comic shop. 

Yes, so then that comes into categorizing inventory. If you buy 5 collections do you keep them all separate, you don't alphabetize them? Thus mixing up the inventory.

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3 minutes ago, ygogolak said:

Yes, so then that comes into categorizing inventory. If you buy 5 collections do you keep them all separate, you don't alphabetize them? Thus mixing up the inventory.

My inventory spreadsheet lists the collection, title, issue, grade, price, etc and I just keep track of what's remaining in each collection that way

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19 minutes ago, rsouxlja7 said:

My inventory spreadsheet lists the collection, title, issue, grade, price, etc and I just keep track of what's remaining in each collection that way

Yes, that is ideal. I think most are saying they don't have the time to do that.

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9 minutes ago, ygogolak said:

Yes, that is ideal. I think most are saying they don't have the time to do that.

I started out going the detailed spreadsheet route the first couple years and it was nice to look over the sales for the year and see what type of profits I made for specific books.  The last few years it would have been a part time job to keep up with all the books I get in and ship out.  I end up just keeping track of all the money I spend on books over the year and consider that the price to purchase inventory (and that gets subtracted from gross sales).  It is a bit crude but I think it gives the IRS what they are looking for and keeps me from the nut house.

How as sales last Sunday?  Nico was a mad man running around buying books.

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17 minutes ago, ygogolak said:

Yes, that is ideal. I think most are saying they don't have the time to do that.

I’m going to see my accountant in a few weeks. I hope he has answers to these questions. There have been years that were good and years I’ve lost my tail in comics transactions. 
 

I’ve been trying to come up with ways to count the costs outside of a ledger and times where I’ve pulled more than a $1000 in cash for these types of purchases. Having the same bank account for 30 years should help. I have years of purchases on statements from Midtown and other shops. I have roughly 3000 separate purchases, many were collections, on eBay the last 20 years. I’m wondering if there is a way to pull these purchases and sales transactions. 
 

I started to laugh over a group of trades that went from trading old football cards for the original Star Wars 12 back action figures that were still carded. Traded those for a 65 Mustang and cash. Traded that Mustang for a huge amount of comics. I can’t remember what I paid for the football cards nor which comics I ended up with. This will be an interesting journey to say the least.

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4 minutes ago, 1Cool said:

I started out going the detailed spreadsheet route the first couple years and it was nice to look over the sales for the year and see what type of profits I made for specific books.  The last few years it would have been a part time job to keep up with all the books I get in and ship out.  I end up just keeping track of all the money I spend on books over the year and consider that the price to purchase inventory (and that gets subtracted from gross sales).  It is a bit crude but I think it gives the IRS what they are looking for and keeps me from the nut house.

How as sales last Sunday?  Nico was a mad man running around buying books.

You would think he had never been to a convention. Everyone was buying like mad though.

I keep record of all my sales and have for 5 years. I may have 50 transactions a month.

At the end of the year I d/l my PayPal transactions as well and weed it down to my purchases. So I have a spreadsheet that can show everything bought and sold online. Cash sales are more difficult and that is where the time comes in, logging all of that.

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14 minutes ago, 1Cool said:

I end up just keeping track of all the money I spend on books over the year and consider that the price to purchase inventory (and that gets subtracted from gross sales). 

This is what I have been doing the last 5 or so years. I’ll log each transaction and what it was for, but I don’t itemize collections or bulk purchases. Is there a benefit to itemizing?

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31 minutes ago, ygogolak said:

You would think he had never been to a convention. Everyone was buying like mad though.

I keep record of all my sales and have for 5 years. I may have 50 transactions a month.

At the end of the year I d/l my PayPal transactions as well and weed it down to my purchases. So I have a spreadsheet that can show everything bought and sold online. Cash sales are more difficult and that is where the time comes in, logging all of that.

I use to do 50 - 60 transactions a month and even that seemed tedious to keep track of each book that came in and how much it sold for.  Now that I've been doing 150 transactions a month for most of the year I just can't imagine finding the time to itemize each purchase via a spreadsheet.  I pretty much only sell on E-Bay now so I get a total in sales for the year and then subtract out the cost of the books that sold.  I estimate the remaining inventory at the end of the year since that goes into the equation.  In general - the tax man sucks.

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24 minutes ago, awakeintheashes said:

This is what I have been doing the last 5 or so years. I’ll log each transaction and what it was for, but I don’t itemize collections or bulk purchases. Is there a benefit to itemizing?

You can either itemize or estimate - I'm sure the tax man would like it better if you itemize each book since it is more complete (but also way more complex).  I think as long as you keep good records of how much you spend over the year buying books and collections and E-Bay gives you total sales you shouldn't run into too many problems if you run into an audit or issues.

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3 hours ago, shadroch said:
15 hours ago, ttfitz said:

I'm not entirely sure of what your question is, or how it relates to what I was talking about, so let me try this again. The post I was referring to talked about someone buying a comic years ago from the rack at 7-11 or something, and needing a receipt for that purpose after this goes into effect. My response was that if he sold that comic for, let's say, $1000, the difference between paying taxes on the whole $1000 or $998 was so small that it wouldn't be worth worrying about not having a receipt; further that if you DID claim $998 as profit and the IRS came calling about it, I would guess that showing them the comic and saying, "See? It cost 2 bucks back 30 years ago when I bought it, there's the price right there [pointing to cover price]" would be sufficient proof of the COGS.

You do realize that you won't be filing taxes on each book, right?  And that you've had expenses storing the book for the last thirty years.

Sure, but none of that has anything to do with being able to document what was paid for the book off the rack years ago, which is, once again, the ONLY point I was responding to.

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41 minutes ago, 1Cool said:

You can either itemize or estimate - I'm sure the tax man would like it better if you itemize each book since it is more complete (but also way more complex).  I think as long as you keep good records of how much you spend over the year buying books and collections and E-Bay gives you total sales you shouldn't run into too many problems if you run into an audit or issues.

Thanks. I have a well detailed record of all sales. It’s the itemizing the collections and the LCS pickups (no itemized receipts) that will add a bit of work. 

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3 hours ago, ygogolak said:

Yes, so then that comes into categorizing inventory. If you buy 5 collections do you keep them all separate, you don't alphabetize them? Thus mixing up the inventory.

There are three methods of accounting for inventory at year end - LIFO, FIFO and WIFL. Most small businesses use WIFL - Whatever I Feel Like.

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On 3/12/2021 at 10:14 AM, NewWorldOrder said:

I don't understand the point of this thread.  If you make a profit, USA gov't wants their cut.  Even in years past if you sold 10k worth of comics it doesnt matter if eBay sent you a 1099 or not.  You are supposed report profits on all amounts you made regardless of eBay.

And I don't understand how the people of this country can stand being taxed upon taxed upon taxed. I buy a book using income thats already been taxed. The book itself upon purchase has a sales tax associated with it. So I'm supposed to be taxed AGAIN if, god forbid, the taxed book I bought using money thats already been taxed is slightly more valuable now? What an absolute joke. 

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8 hours ago, Darkwing7869 said:

And I don't understand how the people of this country can stand being taxed upon taxed upon taxed. I buy a book using income thats already been taxed. The book itself upon purchase has a sales tax associated with it. So I'm supposed to be taxed AGAIN if, god forbid, the taxed book I bought using money thats already been taxed is slightly more valuable now? What an absolute joke. 

What country does this not happen so I can move there?

Profit tax is the not the same as Sales Tax, you are very confused on this simplistic issue.   By your logic all comic book dealers should freely make money without paying sales tax and income tax.  See how that sounds?

Edited by NewWorldOrder
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