Got the letter from Reverb....

Discussion in 'Fred's Barcalounge' started by englishman, Dec 2, 2021.

  1. stevo

    stevo Friend of Fred

    May 1, 2012
    Atlanta
    It's true, the threshold is now low. But there is no way they'll be able to police it.
     
  2. Highroller

    Highroller Country Gent

    Jun 11, 2015
    Portland, OR
    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!

    ---
     
    Last edited: Dec 2, 2021
    NJDevil likes this.
  3. GVDobler

    GVDobler Synchromatic

    935
    May 15, 2011
    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.
     
    Last edited: Dec 2, 2021
    Highroller likes this.
  4. juks

    juks Country Gent

    Nov 26, 2020
    Fremont, California
    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 likes this.
  5. Henry

    Henry I Bleed Orange

    Apr 9, 2014
    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.
     
    Runamok and Jelly Roll Horton like this.
  6. Henry

    Henry I Bleed Orange

    Apr 9, 2014
    Petaluma
    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.
     
    Last edited: Dec 2, 2021
    Duo Slinger likes this.
  7. juks

    juks Country Gent

    Nov 26, 2020
    Fremont, California
    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.
     
  8. Henry

    Henry I Bleed Orange

    Apr 9, 2014
    Petaluma
    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.
     
    MotorCentaur likes this.
  9. Back in Black

    Back in Black Country Gent

    Age:
    72
    Jun 22, 2020
    Ontario Canada
    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
     
    Last edited: Dec 2, 2021
  10. Highroller

    Highroller Country Gent

    Jun 11, 2015
    Portland, OR
    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:

    ---
     
    Last edited: Dec 2, 2021
  11. Fat Bastid

    Fat Bastid Gretschie

    178
    Jan 16, 2021
    England
  12. Henry

    Henry I Bleed Orange

    Apr 9, 2014
    Petaluma
    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..
     
    Sabato and juks like this.
  13. LA Miles

    LA Miles Country Gent

    Dec 6, 2012
    UPSTATE NY
    Oh boy, I’m so tempted to let fly and get this shutdown :D:D:D
     
  14. ramjac

    ramjac Synchromatic

    955
    Aug 14, 2011
    Wisconsin
    In before that!
     
  15. juks

    juks Country Gent

    Nov 26, 2020
    Fremont, California
    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. :( :(
     
    MotorCentaur likes this.
  16. wildeman

    wildeman I Bleed Orange

    May 10, 2015
    norcal
    Yeah, i sold a ABR-1 bridge on there for twice that this year, one used old part.
     
  17. Groutsch

    Groutsch Synchromatic

    534
    Jun 9, 2018
    Maryland, US
    Someone needs to set up a new Reverb.com in Panama or the Caymans.
     
    MotorCentaur likes this.
  18. Highroller

    Highroller Country Gent

    Jun 11, 2015
    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.
     
  19. Jelly Roll Horton

    Jelly Roll Horton Country Gent

    Nov 10, 2017
    Portland, OR
    "Render therefore to Caesar the things that are Caesar’s." It was ever thus. I don’t make enough money to not pay taxes. :rolleyes:
     
  20. stevo

    stevo Friend of Fred

    May 1, 2012
    Atlanta
    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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