Thank You, IRS... now we get to pay tax on guitar sales. Lovely

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I didn't read this whole thread so forgive me if this is redundant. Most of us sell gear at a loss so you don't pay tax on the revenue from a used sale. THe 1099 is just a way to snitch you out to the IRS so you have to say "I lost money on the deal, piss off."
 
I, as well, respect a solid a55h0le to a much greater extent. Happy people just don't experience life normally. :cool:

Yup. It's that "other guy" who's turned away that's the problem.

It's also the guy who has an exceptionally fast turnaround time when you order something and it arrives at your door sooner than expected.
 
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It has to be $600 profit.

95% of what I’ve sold has been at a loss. I’m not worried.

To get the Reverb 1099, it’s gross sales, not profit. And it’s not per sale, it’s cumulative over the entire year. And while you may not pay any tax depending upon your basis, it’s another reason for the IRS to eye each of us suspiciously.

And to brighten your day, most current homeowners policies state that a hobby generating $2,000 gross sales (cumulative) is considered a “business.” Business is excluded under both property and liability sections of homeowners policies (with few exceptions). Good luck with your “TV insurance companies,” especially. ;)
 
Good luck with your “TV insurance companies,” especially. ;)

There's TV insurance? To compensate me for bad shows like "Call Me Kat" or the US version of "Coupling"? How much do they pay for the parts of SNL that's not Weekend Update?

i-amuse-myself-funny.gif
 
And to brighten your day, most current homeowners policies state that a hobby generating $2,000 gross sales (cumulative) is considered a “business.” Business is excluded under both property and liability sections of homeowners policies (with few exceptions). Good luck with your “TV insurance companies,” especially. ;)
I’m happy to say my policy has no such clause. But my insurer doesn’t advertise on TV.
 
I’m happy to say my policy has no such clause. But my insurer doesn’t advertise on TV.

I’d be extremely surprised if Canadian homeowners insurance has no business exclusion. In the USA, it’s only a question of whether or not the US carrier has adopted the ISO form with the $2,000 gross definition limitation.
 
And to brighten your day, most current homeowners policies state that a hobby generating $2,000 gross sales (cumulative) is considered a “business.” Business is excluded under both property and liability sections of homeowners policies (with few exceptions). Good luck with your “TV insurance companies,” especially. ;)
This is where @sergiodeblanc 's advice comes in handy. Always buy, never sell. Then your bidness is never making money. It's only spending money. Not good in the real world, but not bad in the guitar world.

Candidpicker, remember it's still all about shell corps.

(visual aid)
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The IRS loves it when you write that on a form. True story!

"I lost money on the deal; piss off..."

Sellers/dealers will happily take your money. If you sold at a loss, you were just buying and selling in the used items world.

The IRS doesn't care if you bought or sold items.

They just want their fair share of the profits, much like the cartoon thugs who arrive at your door with pitchforks and torches wearing black hoods demanding taxes.

Welcome to the warped sense of reality, in comic language. You can get it back when you file your taxes, or raid the castle like you usually do. :p
 
To get the Reverb 1099, it’s gross sales, not profit. And it’s not per sale, it’s cumulative over the entire year. And while you may not pay any tax depending upon your basis, it’s another reason for the IRS to eye each of us suspiciously.

And to brighten your day, most current homeowners policies state that a hobby generating $2,000 gross sales (cumulative) is considered a “business.” Business is excluded under both property and liability sections of homeowners policies (with few exceptions). Good luck with your “TV insurance companies,” especially. ;)
Thanks… a point I’ve been try to make!

And yes, homeowner’s insurance usually excludes any item you use for business. State Farm does, for sure. MusicPro insures my music gear for that very reason, home and away.

In a way, this is one of those posts I regret making. But if it gets a few folks to dig deeper than their assumptions before they get “the letter,” then I suppose it’s worthwhile discussion.
 
And since the topic of insurance has come up:

(dated Feb 2021):

“The AAJ compiled a list of the worst insurance companies in the United States by examining thousands of records about the companies, including court documents, FBI records, and testimony from former insurance employees. Their research identified the companies that work against the clients that need them the most by rejecting claims, denying coverage, and jacking up premiums.”

You might be surprised who makes this list:

https://www.natlawreview.com/article/11-worst-insurance-companies
 
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Just got notified by Reverb that they need my tax information if I sell anything over $600 in a year so they can report it to the IRS and issue me a 1099-K. Just wonderful. Is there anywhere the Feds don't want to wring out another drop of blood?

Person to Person sales, here I come.

You can thank Joe Biden and those who passed the jobs recovery act. The folks in Washington don’t read bills anymore.
 
It has to be $600 profit.

95% of what I’ve sold has been at a loss. I’m not worried.

You now have to fill out more tax forms. And if you can’t prove your cost basis you will have to get an appraisal to establish fair market value for tax purposes.

And if you don’t report it, the irs will assume your cost basis is zero and tax you on the full amount.

You would likely get an invoice for tax due and you’d have to amend your tax return.

Thanks Mr Biden.
 
Just got notified by Reverb that they need my tax information if I sell anything over $600 in a year so they can report it to the IRS and issue me a 1099-K. Just wonderful. Is there anywhere the Feds don't want to wring out another drop of blood?

Person to Person sales, here I come.
You can thank Mr. Trump for that. If you can remember, in 2017 he went on a rampage about people selling and buying on the internet and not paying taxes, especially "those hippie musicians". He went on and on about it. At first states and the IRS didn't want to charge the online sales tax but Mr. Trump insisted and kept on pressuring them to do so and so they finally conceded. This new policy about the $600 or more having to be reported to the IRS is a result of this administration allegedly claiming to be cracking down on "tax evaders", but of course that only means that they're still not going to tax the wealthy but are doubling down on the little man. Therefore neither Ebay or Reverb will ever again see another one of my dollars.
 
Ok, slow your rolls.

My understanding is that this already existed, the number just got lower. And that it’s only if you profited more than $600. They will start asking you how much you paid for the item you’re selling (your cost basis), and then the 1099 is if you sold for more than you paid - think capital gains/losses.

This is a PRS forum, where are so the accountants?!?
If you have been depreciating your equipment for tax purposes, then you must take that into account when determining your cost basis when you sell. Some free advice from a former accountant. :). I myself am just a hobbiest.
 
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