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Author Topic: Anyone receive an IRS 1099-K form from PayPal for selling your ham equipment?  (Read 1361 times)

KW4CQ

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This year was the first time I have ever receive such a form showing that I owe the IRS tax on my ham equipment I sold through PayPal in 2020.  I'm stunned!  What's going on with PayPal?
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WA9AFM

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The 1099K has to do with 'third party transactions', i.e. sales via PayPal, EBay, etc.

Your best bet is to take it to your tax advisor and let them deal with it.
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KW4CQ

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Yes, I am aware of that.  Here is something I just discovered on-line and will pass it along for anyone else who may be interested:

PayPal will track the payment volume of your account to check whether your payment volume exceeds both of these levels in a calendar year:

$20,000 USD in gross payment volume from sales of goods or services in a single calendar year
200 payments for goods or services in the same year
Some US States require merchant reporting at a lower threshold:
Vermont, Massachusetts, Virginia, Maryland: $ 600 USD in gross payment volume from sales of goods or services in a single calendar year regardless of the number of transactions;
Illinois: $1,000 USD in gross payment volume of goods or services in a single calendar year with at least 4 payment transactions processed.
Note:  If you are a ham living in Virginia, as I am, and you sell some ham gear and collect the payment via PayPal you will get an IRS-1099-K reporting the total amount of your transactions for the year if the total exceeds $600.00.  You will have to report that to the IRS on your Schedule C when you file your tax return for the year.
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WA9RHD

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Unless you made tons of money selling your ham gear -

You may have to report it but there is no tax liability if your tax basis (cost) exceeds the net proceeds (i.e. sold at a loss)

Also - personal losses are not deductable


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WA6BJH

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So, you have to pay tax?  Get over it, we all have to pay tax.
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WA6BJH

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Oh, something else.  You might have to pay sales tax in Virginia.
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AA4PB

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Even if you did sell the radio for more than you paid for it, you can claim the profit as hobby income. You can write off all your hobby expenses that year against it. That argument might work well with the XYL as well. But honey, if I don't buy this new radio before Jan 1st then *we'll* have to pay income tax on the sale of the old radio. :-)
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Bob  AA4PB
Garrisonville, VA

WA9AFM

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Oh, something else.  You might have to pay sales tax in Virginia.

In Oklahoma, we're 'required' to pay sales tax on ANY sale, commercial or private.  Thus, any revenue from a garage/private/flea market sale requires collection/payment of sales tax.  The Oklahoma Tax Commission showed up at our local hamfest several years ago and distributed tax packages to the commercial and flea market vendors.
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KW4CQ

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An addendum.  I sold a piece of equipment to a fellow ham.  It turned out he wasn’t happy with what he bought.  I refunded his full purchase price.  Net zero profit on sale.  PayPal showed this as a “sale” on the 1099-K.  I still had to pay iRS tax  on the net zero sale.  Bummer!
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W9IQ

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An addendum.  I sold a piece of equipment to a fellow ham.  It turned out he wasn’t happy with what he bought.  I refunded his full purchase price.  Net zero profit on sale.  PayPal showed this as a “sale” on the 1099-K.  I still had to pay iRS tax  on the net zero sale.  Bummer!

Then you need a new tax advisor. No tax is due if those transactions occurred in the same fiscal year. If it spanned fiscal years, the net tax is still zero if your overall financial situation hasn't changed.

- Glenn W9IQ
« Last Edit: March 17, 2021, 05:20:58 PM by W9IQ »
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- Glenn W9IQ

God runs electromagnetics on Monday, Wednesday and Friday by the wave theory and the devil runs it on Tuesday, Thursday and Saturday by the Quantum theory.

KW4CQ

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Good point, Glenn.  You saved me a tidy sum with that advice.  Settle for a cigar?
73, Bob KW4CQ
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W9IQ

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Will I have to declare its value?

- Glenn W9IQ
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- Glenn W9IQ

God runs electromagnetics on Monday, Wednesday and Friday by the wave theory and the devil runs it on Tuesday, Thursday and Saturday by the Quantum theory.

KW4CQ

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Only if you smoke it!  ;D
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N8YX

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And this kind of thing is what will give rise to the use of cryptocurrency for person-to-person transactions, along with a resurgence in cash-only sales at hamfests or in person...etc.

If the government has a money problem, the government should quit printing and spending money it doesn't have.
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W6MK

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If the government has a money problem, the government should quit printing and spending money it doesn't have.

That's what governments are all about. A major reason we have them. No government, no money.

Very tough for most people to live without it.
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