New IRS reporting for 2021? 8 8

[Shrevvy]

3 hours ago, jharvey said:

The tax treatment is different depending on whether your comic selling is considered a hobby or a business. Ask your tax preparer what you need to do in order to be considered a business, and thus can deduct all expenses, including purchased inventory.

Even as a business, you cannot deduct purchsed inventory unless you have sold it. 

[MyNameIsLegion]

2 minutes ago, Shrevvy said:

Even as a business, you cannot deduct purchsed inventory unless you have sold it. 

and isn't there something about unsold inventory older than a year being taxed, or recorded or something?

[fantastic_four]

One annoyance about all of this is I don't always remember what I paid for any given item I want to sell.  I track comic buy/sell prices, but only if I paid more than about $50 to $100 for it.  Cheaper stuff I bought raw at cons I mostly won't remember what I paid.  I'll be selling statues and action figures I bought at MSRP, but I don't remember MSRP prices for stuff from decades ago.

[Shrevvy]

Just now, MyNameIsLegion said:

and isn't there something about unsold inventory older than a year being taxed, or recorded or something?

Unsold inventory is not taxed at the Federal level. I suppose it could be taxed at the state level, but am unaware of that. 

[fantastic_four]

3 minutes ago, MyNameIsLegion said:

and isn't there something about unsold inventory older than a year being taxed, or recorded or something?

The only thing I know about collectibles inventory from over a year old is that if you've had it over a year it's considered a long-term investment and subject to a different tax rate.  Under a year of ownership is the short-term rate.

[jharvey]

5 hours ago, Shrevvy said:

Even as a business, you cannot deduct purchsed inventory unless you have sold it. 

Yes, you are correct. Cost of goods sold you can deduct.

[Key Largo Comics]

Will be interesting to see who gets driven out of the hobby. Could be a good thing?

[fastballspecial]

So someone correct me if I am wrong because I didnt read the whole thread yet.
All these sellers are scared because they will finally have to pay taxes like many
of us already do on comics?

How is less competition on ebay going to bother me? I am going to love it. 

On the bad side just found out next year because I sold so much last year I have to make 
quarterly payments. All gladly make them if there is less sellers on ebay. 

[fastballspecial]

On 3/8/2021 at 1:26 PM, the blob said:

On 3/8/2021 at 1:03 PM, shadroch said:

Anything to evade paying your fair share of taxes. How patriotic. 

it is more the record keeping and tax form filing requirements for a small seller who may not actually make taxable profit overall.

It is not that difficult. People are just lazy.

 

 

Edited April 15, 2021 by fastballspecial

[fastballspecial]

On 3/8/2021 at 2:25 PM, Wolverinex said:

A big question is selling comics that you've held over a year.. are you charged at a long term capital gains tax rate and how does ebay know?  

No its Purchase-Sold=Profit. Now I admit it gets blurry at some point if you have had the books a long, but a year nah.

As 1Cool stated its Sold-Purchase = Profit - expenses. I actually have it above
on my spreedsheet, but I use a formula.  

 

Edited April 15, 2021 by fastballspecial

[the blob]

1 minute ago, fastballspecial said:

It is not that difficult. People are just lazy.

 

 

folks who have been accumlating comics since 1993 were not keep great records. I should have probably kept all the old bags and the old price tags.

[fastballspecial]

On 3/8/2021 at 2:31 PM, OdinsSecrets said:

My sales are definitely well below $20,000, but I reported them last year as sales of capital assets. The tax rates are not that high and it wasn't a huge hassle, but I can see it getting complicated if eBay and PayPal start stepping in and issuing their own 1099s...

This year was a little difficult as the switch from ebay to paypal sucked, but their fees are easy to find. The key is to keep 
good records off ebay purchases because the ones on ebay you can easily download.

 

[fastballspecial]

1 minute ago, the blob said:

3 minutes ago, fastballspecial said:

It is not that difficult. People are just lazy.

 

 

folks who have been accumlating comics since 1993 were not keep great records. I should have probably kept all the old bags and the old price tags.

Yes that is an issue for some if the book has been held long term, but a best guess is fine. Remember you are taxed on the profit. 

 

[fastballspecial]

On 3/8/2021 at 3:20 PM, the blob said:

A lot of hobbyists became part time "dealers". If they have to start paying 1/2 of their income in taxes, that's going to put a damper on their business, and I'd imagine many will stop selling altogether. 

For most people, depending on whether they are already maxed out on social security taxes, and depending on state income taxes, the federal marginal rate is going to be 18-24% and that is on profits, not sales, and you can deduct a myriad of things against sales that reduce the taxable profits.

Exactly fees, expenses, a room, etc....

Nobody ever mentions the large margins of profit on comics. I could care less if they tax me on it. If I am doing it right I am 
well ahead either way.

 

[fastballspecial]

On 3/8/2021 at 7:16 PM, THE_BEYONDER said:

My 90-day-total is just over $600, and all I’ve been doing is plucking books from my long box $1 bin fodder.

Same here easily the biggest year for me ever.

 

[the blob]

6 minutes ago, fastballspecial said:

Yes that is an issue for some if the book has been held long term, but a best guess is fine. Remember you are taxed on the profit. 

 

I spent $3500 a year on storage for my collection from 2002 - 2007 or so. I wonder how I can factor that into my cost basis? It made a lot of those $1-2 purchases at the time really cost $3-4. I'm not so brilliant it seems.

Edited April 15, 2021 by the blob

[fastballspecial]

Just now, the blob said:

5 minutes ago, fastballspecial said:

Yes that is an issue for some if the book has been held long term, but a best guess is fine. Remember you are taxed on the profit. 

 

I spent $3500 a year on storage for my collection from 2002 - 2007 or so. I wonder how I can factor that into my cost basis?

You already know the answer to that and if you don't can you video your tax accountant when you tell him that?

[the blob]

3 minutes ago, fastballspecial said:

You already know the answer to that and if you don't can you video your tax accountant when you tell him that?

I do my own taxes. I was not happy with the accountant we hired one year.

According to ebay I have averaged under $1,000 in sales per year in my 22 years on the platform. I easily spent more than double that on comics each year. But this year is different. 

Edited April 15, 2021 by the blob

[fastballspecial]

 

1 minute ago, the blob said:

I do my own taxes. I was not happy with the accountant we hired one year.

So you do know the answer. 

[fastballspecial]

On 3/9/2021 at 9:37 AM, 1Cool said:

The $20k limit did seems pretty crazy in terms of a threshold.  $600 seems a tad small but I guess if it's just a key stroke for E-Bay then it doesn't matter what the threshold is.  I've been paying taxes on e-bay sales for years so it is the same of same to me.  If people want to stop selling on e-bay -  I'm all for it since I'll be happy to pick up the slack.

No the paper work is too much for you. Please stop.