Got the letter from Reverb....

Highroller

Country Gent
Jun 11, 2015
1,847
Portland, OR
... Ebay must be in the same pickle?

Yeah, nobody cares about you selling a few Telecasters over Craigslist. It's all about tracking businesses (or people operating as businesses) over platforms like ebay, etsy, or reverb. And it defines "business" as when the seller is operating with the primary purpose of making a profit. That's to say, not a hobbyist just unloading some old junk.

Getting a 1099 doesn't mean you'll pay more taxes, it just means you'll report more income. There's a million ways to avoid having that lead to paying more taxes. Some people are pretty good at finding them!

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GVDobler

Synchromatic
May 15, 2011
937
Las Vegas
Yes ebay will be in the same pickle. If you sell a guitar for $2100 and have paperwork that you bought it for $1000 and put $200 into it, then you will pay income tax on the $900 profit. So keeping records for an audit is on you.

The old joke about sending your paycheck to the IRS and they will send you what they don't use may yet come true.

About 20 years ago they floated this idea: If your house is paid off, they wanted to tax you on the amount of rent your house could bring according to the IRS chart. Say $1,500 a month. Since you live there rent free, the amount of rent you don't pay would be considered income and subject to income tax. HB4848 I think was the number on the proposed bill.
 
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juks

Country Gent
Nov 26, 2020
1,828
Fremont, California
It's true, the threshold is now low. But there is no way they'll be able to police it.

Not so. The responsibility is with Reverb. They know how much each of their users sold in a year. If it's more than $600 they must issue 1099 that is sent both to the user and IRS.

IRS can always audit Reverb to see if they are doing this. Then if the user does not include the Reverb 1099 in their tax declaration, IRS already has a copy of it. And if they audit that user's account, they will see that the user did not declare all their income. Busted.
 

Henry

I Bleed Orange
Apr 9, 2014
18,355
Petaluma
Lol re "used" things not having to be taxed. Real estate companies would love it if they never had to pay taxes on real estate they flipped because the land and improvements are used.:rolleyes:

Tax is on income, doesn't matter how the income is generated unless the tax code says it matters.
 

Henry

I Bleed Orange
Apr 9, 2014
18,355
Petaluma
It's true, the threshold is now low. But there is no way they'll be able to police it.
Yes . . . But that is why they put the burden on the reverbs of the world. Companies like reverb can police the transactions they host, and the IRS can in turn police large companies like reverb.
 
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juks

Country Gent
Nov 26, 2020
1,828
Fremont, California
Yes ebay will be in the same pickle. If you sell a guitar for $2100 and have paperwork that you bought it for $1000 and put $200 into it, then you will pay income tax on the $900 profit. So keeping records for an audit is on you.

The old joke about sending your paycheck to the IRS and they will send you what they don't use may yet come true.

About 20 years ago they floated this idea: If your house is paid off, they wanted to tax you on the amount of rent your house could bring according to the IRS chart. Say $1,500 a month. Since you live there rent free, the amount of rent you don't pay would be considered income and subject to income tax. HB4848 I think was the number on the proposed bill.

Yep, this is a record keeping nightmare. Not only for guitars but for anything you sell though these platforms.

I have gear that I bought 30, 40 years ago. Do I have the invoice still? Of course not.

Also I'm guessing if you have a luthier fixing your guitar, that's a deductible expense. How about new strings? Is that deductible too? So keep the invoices for all strings you've put on in the lifetime of the guitar before you sell it? Lol.
 

Henry

I Bleed Orange
Apr 9, 2014
18,355
Petaluma
Yes ebay will be in the same pickle. If you sell a guitar for $2100 and have paperwork that you bought it for $1000 and put $200 into it, then you will pay income tax on the $900 profit. So keeping records for an audit is on you.

The old joke about sending your paycheck to the IRS and they will send you what they don't use may yet come true.

About 20 years ago they floated this idea: If your house is paid off, they wanted to tax you on the amount of rent your house could bring according to the IRS chart. Say $1,500 a month. Since you live there rent free, the amount of rent you don't pay would be considered income and subject to income tax. HB4848 I think was the number on the proposed bill.

Part of the problem is the inequitable and regressive system for taxing housing. Homeowners and landlords get tax deductions for mortgage interest and property taxes. Renters get no tax benefits except in certain situations, usually low income. One group gets subsidized housing, another doesn't. Arguably inequitable.

Homeowners tend to be wealthier than renters. So not only inequitable, but regressively so.

And when there are deductions for renters, the value is usually less as they pay rates at a lower marginal rate.

As much as I love and benefit heavily from my SALT deductions in Taxifornia, they aren't good policy imo.
 

Back in Black

Country Gent
Jun 22, 2020
1,245
Ontario Canada
Here we go, who here is handing your social security # to these places????


Dear Reverber,

We’re writing to let you know about a new IRS reporting requirement for 2022:

  • Beginning January 1, 2022, marketplaces like Reverb will be required to collect tax identification information from sellers who sell $600 or more on the platform in a calendar year.
  • This information is needed to ensure timely and accurate issuing of a Form 1099-K.
  • There’s nothing you need to do now, but we may ask you for tax identification information in 2022 if you hit the new $600 threshold.
Reporting your sales doesn’t necessarily mean you’ll need to pay income tax on your sales—it just means that you’ll be issued a Form 1099-K. You can learn more in our Help Center, which we’ll keep updated with the latest tax information. We’ll let you know if you need to take any action in 2022.

Thanks for being part of our community,

The Reverb team

EM,

The best thing you/anyone can do with Reverb is to avoid them completely!

First and foremost, they are not a dealer/retailer, they're a broker. Thereby, you the ''seller''...become the ''retailer''.

This topic was covered recently.

Do your own brokering. We pay enough for what we buy as it is, why start paying a brokerage fee.

In all my years, especially now with social media, and with the help of friends, like those on this forum, I have yet to look for anything, that with a little perseverance, couldn't be found.

Case in point, I wanted a second Rickenbacker 325 C58, started a search, found a beauty in Legnano Italy.

The pick-guard was cracked, otherwise the little Ric was in ''as new'' condition. I replaced the pick-guard, which was another interesting search, and found ''RickySounds'' in Nottingham England, a Rickenbacker Specialty shop...great folks, all the Ric specialty toys. Robbie fabbed me two replacement pick-guards, and two name-plates. Very quick turn-around, had the parts in a week, and the guitar made the long trip from Italy in under 10 days.

Forget the brokers...let your fingers do the walking, and save your hard earned $$$$!!!

Best,

BIB.

DSCF1423.JPG DSCF1424.JPG DSCF1427.JPG DSCF1429.JPG
 
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Highroller

Country Gent
Jun 11, 2015
1,847
Portland, OR
Yes ebay will be in the same pickle. If you sell a guitar for $2100 and have paperwork that you bought it for $1000 and put $200 into it, then you will pay income tax on the $900 profit. So keeping records for an audit is on you.

This is true - keeping records will become very important. But it also helps to look at the big picture. For those people/businesses that record a large number of transactions, there's always going to be transactions you can claim you lost money on. The $1500 digital workstation that's only worth $500 now. You'll report those too, and that'll offset the profitable stuff, bringing down your overall taxable income.

People that play the stock market have been doing that for years. You always dump your losers at the end of the year to offset the winners.

It's all a game, twisted as it is, but a game nonetheless! :rolleyes:

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Henry

I Bleed Orange
Apr 9, 2014
18,355
Petaluma
Yep, this is a record keeping nightmare. Not only for guitars but for anything you sell though these platforms.

I have gear that I bought 30, 40 years ago. Do I have the invoice still? Of course not.

Also I'm guessing if you have a luthier fixing your guitar, that's a deductible expense. How about new strings? Is that deductible too? So keep the invoices for all strings you've put on in the lifetime of the guitar before you sell it? Lol.
Nah you gotta depreciate the strings over their useful lifetime. :DThomastik Infields may sound great, but are a terrible tax choice due to their longer useful life.:rolleyes:

I am of course kidding..
 

juks

Country Gent
Nov 26, 2020
1,828
Fremont, California
Part of the problem is the inequitable and regressive system for taxing housing. Homeowners and landlords get tax deductions for mortgage interest and property taxes. Renters get no tax benefits except in certain situations, usually low income. One group gets subsidized housing, another doesn't. Arguably inequitable.

Homeowners tend to be wealthier than renters. So not only inequitable, but regressively so.

And when there are deductions for renters, the value is usually less as they pay rates at a lower marginal rate.

As much as I love and benefit heavily from my SALT deductions in Taxifornia, they aren't good policy imo.

I've worked from home twice in my career. The first time I did it around 2010 I could deduct the % my work space occupied of the total home of rent, utilities etc.

So for 2020 I had prepared all the same when I met my tax advisor, happily expecting the same deductions. He said, can not do. That possibility was removed in the 2016 tax code changes. Thanks a bunch... :(.

Even worse, they also reduced the dependant deduction from making a real difference to pitifully small. :( :(
 

wildeman

I Bleed Orange
May 10, 2015
15,997
norcal
Yeah, and there's plenty of vendors on Reverb that aren't private sellers - they're businesses, and that's who this is directed at. But do I think the $600 figure is way, way too low.

Apparently, the IRS has no idea what guitar gear costs!
Yeah, i sold a ABR-1 bridge on there for twice that this year, one used old part.
 

Highroller

Country Gent
Jun 11, 2015
1,847
Portland, OR
Ha! Well, let's not forget ... as a percentage of the entire world's internet marketplace, musical instruments are probably not much more than a blip on the screen. Maybe $600 makes a little more sense if you're looking at socks and underwear.
 

stevo

Friend of Fred
May 1, 2012
6,953
Atlanta
Yes . . . But that is what they put the burden on the reverbs of the world. Companies like reverb can police the transactions they host, and the IRS can in turn police large companies like reverb.

Neither can keep up it. Enforcement is on the IRS, tabulation is on Reverb(s) of the world. It's absurd to put the threshold so low.
 


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