New Reverb selling requirement

Discussion in 'THE Gretsch Discussion Forum' started by LA Miles, Jan 5, 2022.

  1. LA Miles

    LA Miles Country Gent

    Dec 6, 2012
    UPSTATE NY
    Maybe this has been discussed already....
    "As of January 1, 2022, marketplaces like Reverb are required to collect tax identification information from sellers who sell $600 or more in a calendar year. This information will help us issue you the necessary tax documents and ensure that your payouts are not impacted."
     
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  2. rcboals

    rcboals Country Gent

    Nov 21, 2008
    Springfield Oregon
    I used to receive lots of 1099's each year from over twenty to thirty insurance company we contracted with. They like my company were required to send a 1099 to anyone they paid over $600.00. Every one of those 1099's went in the garbage they mean't absolutely nothing to my CPA. What matters is what you actually received. This really isn't a big deal. You keep track of the income you receive and report it. You do not send copies of 1099's with your tax returns. It is up to you to report and keep track of your income and business expenses.
     
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  3. Merc

    Merc Friend of Fred

    May 6, 2017
    Florida
    I think I recall hearing that might include payment services like maybe PayPal and stuff as well.
     
  4. DaddyDog

    DaddyDog Country Gent

    Sep 18, 2011
    Mississauga, Canada
    Like my Canadian social insurance number??

    upload_2022-1-6_10-7-22.png
     
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  5. LA Miles

    LA Miles Country Gent

    Dec 6, 2012
    UPSTATE NY
    I have your number on file if you've lost it Blair :)

    But, yes.
     
    Last edited: Jan 6, 2022
    DaddyDog likes this.
  6. LA Miles

    LA Miles Country Gent

    Dec 6, 2012
    UPSTATE NY
    My take is now, instead of a 20k threshold it's been dropped to .6k. So you sell a guitar for 2k, you get a 1099 showing it as income and the IRS gets the info too. Sooooo, you owe tax on it unless you paid say $2500. Now you got a loss, if you can prove what you paid for it.

    Potential tax preperation nightmare if the IRS wants to make it one. The truth is, the Feds are checking between the cushions on the couch to collect every quarter they can find.
     
    capnhiho likes this.
  7. rake_ether

    rake_ether Gretschie

    419
    Aug 24, 2019
    Athens, GA USA
    Philip McNight talked about this on his YouTube video recently. According to him when a sale is made (and this is for us casual sellers as businesses of course already capture this info) Reverb will ask what did you buy the item for. If you sell it for more than what you paid for it a U.S. IRS 1099 may be generated if all your sales for the year exceed $600 more than what you paid. If you sell at a loss a 1099 will not be generated. And, apparently, the amount you paid for the item is self-reported. I have no idea how this effects those outside the U.S.
     
    Philtertronic likes this.
  8. swivel

    swivel Country Gent

    May 13, 2018
    PNW
    There's the problem. You now have to treat it like a business, showing what you paid, what you added that cost you etc. Then claiming a loss. You are only allowed to claim a loss 3-4 years in a row or the IRS considers it a hobby.
    To have it be a hobby, you then have to take the increased income hit without deducting.
     
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  9. drmilktruck

    drmilktruck I Bleed Orange

    May 17, 2009
    Plymouth, MN
    Time to form an LLC! DMT Musical Specialties. :D
     
    scrimmer, rcboals and LA Miles like this.
  10. LA Miles

    LA Miles Country Gent

    Dec 6, 2012
    UPSTATE NY
    Yep
     
  11. nightbird

    nightbird Electromatic

    83
    May 4, 2013
    arizona
    H0w does this affect the sale of a vintage equipment? If I sale a vintage guitar for $5,000 and Reverb wants to know what I originally paid for it, what proof do I need to provide? My word? A handwritten bill of sale, which I can write up myself?
     
  12. rake_ether

    rake_ether Gretschie

    419
    Aug 24, 2019
    Athens, GA USA
    My understanding you state what your purchase price was. It seems Reverb is not requiring or needing documentation, but the IRS may.
     
  13. hcsterg

    hcsterg Friend of Fred

    Feb 13, 2012
    France
    Reverb ?
    I don't know them.
    A+!
     
    capnhiho likes this.
  14. nightbird

    nightbird Electromatic

    83
    May 4, 2013
    arizona
    Anyone know if this is an across the board policy or just Reverb? Ebay doing the same?
     
  15. juks

    juks Country Gent

    Nov 26, 2020
    Fremont, California
    Yes, ebay is doing the same. If you sell in CL, they can't track it. So no issue there.
     
  16. Mark W

    Mark W Country Gent

    Age:
    69
    Jun 6, 2008
    Central Florida
    Just keep your receipts. If some of ya'll are making money selling your gear I applaud you. I usually add/upgrade components which involves a luthier installation fee and with many guitars have purchased a case and of course set up costs. So what I am saying is a Lose some amount of money on every guitar I have sold. Oh plus shipping costs are ridiculous so there is that too!
     
  17. rake_ether

    rake_ether Gretschie

    419
    Aug 24, 2019
    Athens, GA USA
    Philip McNight updated what Reverb is doing with 1099s on his Friday show. What he stated last week was incorrect, Reverb (and eBay) will send us (U.S. citizens I'm guessing) a 1099 when our sales exceed $600 total for the year. It will be up to us to justify to the IRS that the sale(s) resulted in a loss.
     
  18. LA Miles

    LA Miles Country Gent

    Dec 6, 2012
    UPSTATE NY
    Exactly, when you get a 1099, the IRS is getting an electronic file with that info. Whether you use the 1099 on your taxes is up to you but if you don’t you may have ‘splainin to do to Uncle Sam.
     
  19. Frank_NH

    Frank_NH Synchromatic

    847
    Mar 25, 2013
    Lebanon, NH
    Welcome to 2022. The reality is that this new 1099K reporting requirement will likely have a significant chilling effect for all online sales platforms. Ordinary folks like you and I will be less likely to sell merchandise online but rather use online Classifieds like Craig’s List and Facebook Marketplace. This will leave mainly the large retail stores and sellers on marketplaces like Reverb and eBay.

    At eBay they mentioned that they are lobbying Congress to get the threshold increased to a more sensible level. I’m not sure if Reverb is doing the same, but certainly PayPal, Vendmo, and other payment services are lobbying as well. Good luck to them but somehow I don’t think tax burdens are going to be reduced in the foreseeable future…
     
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