Reverb, online market places, & the IRS

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bearblastbeats

Senior Member
Holy Moly!

After listing a drum set on reverb, they notified me I couldn't receive my funding until I finalize some tax information. Making over $600 now needs to be reported to Uncle Scam?

So, after trying to sell a kit at a loss, the big guy then gets 27% of what's left?

Ya gotta love the good ol' USSA!
 

Seafroggys

Silver Member
This plus the addition of 87000 more IRS "employees".

Nothing to see here though.
This is a good thing, actually. The IRS is severly underfunded and underemployed, and have been for iirc over ten years at this point. There's a lot of high end white collar crime / tax fraud cases that are flying under the radar because the IRS doesn't have the manpower to investigate it. They're often framed in popular media as the ultimate evil to the average joe, but that's just a big lie engineered by big corporations to keep the common person to go against the agency that can actually go after the real crimes happening in this country.

Wage theft is the biggest theft in the United States by a huge margin, blowing shoplifting out of the water. But IRS bad, amirite?
 

bearblastbeats

Senior Member
This is a good thing, actually. The IRS is severly underfunded and underemployed, and have been for iirc over ten years at this point. There's a lot of high end white collar crime / tax fraud cases that are flying under the radar because the IRS doesn't have the manpower to investigate it. They're often framed in popular media as the ultimate evil to the average joe, but that's just a big lie engineered by big corporations to keep the common person to go against the agency that can actually go after the real crimes happening in this country.

Wage theft is the biggest theft in the United States by a huge margin, blowing shoplifting out of the water. But IRS bad, amirite?
Did you read about the IRS agents who failed to file there taxes this year? Using claims such as "I forgot the deadline" and "I didn't know how."

"Some of these were rehires after being previously fired for "willful failure to properly file their Federal tax returns.""

 

Jeremy Crockett

Well-known Member
This is a good thing, actually. The IRS is severly underfunded and underemployed, and have been for iirc over ten years at this point. There's a lot of high end white collar crime / tax fraud cases that are flying under the radar because the IRS doesn't have the manpower to investigate it. They're often framed in popular media as the ultimate evil to the average joe, but that's just a big lie engineered by big corporations to keep the common person to go against the agency that can actually go after the real crimes happening in this country.

Wage theft is the biggest theft in the United States by a huge margin, blowing shoplifting out of the water. But IRS bad, amirite?

Your response has ZERO bearing on the OP who sold $600 worth of used equipment and is having that money held hostage by Reverb acting as an IRS proxy. But, you-do-you, Boo.
 

someguy01

Platinum Member
This is not news. This was covered when everyone complained about PayPal 1099ing you when you collect more than $600. Reverb is just catching up to the rules.

Those taxes, paying for pesky things like the salaries of all the members of the military, those parks we like to visit, and the services everyone takes for granted because the "news" like to only speak of the attention grabbing excess that makes up a fraction of a percentage of what the government spends on everything.
It's all good though, if everyone looked at the entire picture and things made sense, instatwitface would go silent. No one could concentrate on the three dots in the corner of the pointillism painting and complain about the color.
 

Jeremy Crockett

Well-known Member
This is not news. This was covered when everyone complained about PayPal 1099ing you when you collect more than $600. Reverb is just catching up to the rules.

Those taxes, paying for pesky things like the salaries of all the members of the military, those parks we like to visit, and the services everyone takes for granted because the "news" like to only speak of the attention grabbing excess that makes up a fraction of a percentage of what the government spends on everything.
It's all good though, if everyone looked at the entire picture and things made sense, instatwitface would go silent. No one could concentrate on the three dots in the corner of the pointillism painting and complain about the color.
Not everyone gets everything at the same time. Things like this become issues for most people when they are immediately affected by them.

Didn't you leave the US for Mexico? (Edited for clarity).
 
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dboomer

Senior Member
Seems to me that if you report your sales then you should be able to also declare any new purchases as “inventory”. If the IRS is gonna treat small sales like this as taxable, then they just made you a “business” and you should be able to deduct as a business. The current exemption is $12,000 if you file schedule C, so I imagine that would put most of us way ahead.

I think this is gonna bite them in the ass.

But I will need to confirm this 😉
 

Push pull stroke

Platinum Member
Seems to me that if you report your sales then you should be able to also declare any new purchases as “inventory”. If the IRS is gonna treat small sales like this as taxable, then they just made you a “business” and you should be able to deduct as a business. The current exemption is $12,000 if you file schedule C, so I imagine that would put most of us way ahead.

I think this is gonna bite them in the ass.

But I will need to confirm this 😉

Agreed. I’m filing schedule C and claiming every percussion purchase over the last 30 years as an expense. How far back can you claim? Lol
 

Chris Whitten

Silver Member
If you sell something it's income isn't it.
If you are professional musician and sell a drum kit at a loss then it gets counted against your overall income.
If you are a plumber, drumming is your hobby and you can't generally claim a drum kit as an expense.
The whole thing is completely legit.
If you are a plumber but also sell a dozen snares and a couple of kits a month, you are running a gear business and Reverb/IRS want to know about it.
 

toddbishop

Platinum Member
This is a good thing, actually. The IRS is severly underfunded and underemployed, and have been for iirc over ten years at this point. There's a lot of high end white collar crime / tax fraud cases that are flying under the radar because the IRS doesn't have the manpower to investigate it. They're often framed in popular media as the ultimate evil to the average joe, but that's just a big lie engineered by big corporations to keep the common person to go against the agency that can actually go after the real crimes happening in this country.

Wage theft is the biggest theft in the United States by a huge margin, blowing shoplifting out of the water. But IRS bad, amirite?

All true-- as the IRS has been understaffed audits of working class people have gone up. More IRS staff is good for everyone except wealthy tax evaders.

Your response has ZERO bearing on the OP who sold $600 worth of used equipment and is having that money held hostage by Reverb acting as an IRS proxy.

That's just commerce. Anyone who pays you >$600 for anything is supposed to file a 1099.

Seems to me that if you report your sales then you should be able to also declare any new purchases as “inventory”. If the IRS is gonna treat small sales like this as taxable, then they just made you a “business” and you should be able to deduct as a business.

That's exactly what you're supposed to do.

The current exemption is $12,000 if you file schedule C, so I imagine that would put most of us way ahead.

The current standard deduction is $12500 for individuals, it has nothing to do with expenses/deductions on a Schedule C.
 

Stroman

Platinum Member
Nothing like taxes to get people riled up! Lol

Reminds me of a totally off-topic story. One day, I was out running errands, and I ended up at a stoplight next to a car with a sticker that said "Taxes are theft."

I motioned for them to roll down the window, at which point I said "How're you doing? Nice day for a drive."

They nodded, looking a bit nonplussed.

"I noticed you're driving on this roadway here."

Now they looked a bit confused, but acknowledged my statement.

"How do you suppose this roadway was paid for?"

Window shot up, eyes forward! Lol

Okay, back to the thread. Yes, you have to report the >$600. Report the original cost too, so it shows a loss, as so many have stated.
 

Xstr8edgtnrdrmrX

Diamond Member
Nothing like taxes to get people riled up! Lol

Reminds me of a totally off-topic story. One day, I was out running errands, and I ended up at a stoplight next to a car with a sticker that said "Taxes are theft."

I motioned for them to roll down the window, at which point I said "How're you doing? Nice day for a drive."

They nodded, looking a bit nonplussed.

"I noticed you're driving on this roadway here."

Now they looked a bit confused, but acknowledged my statement.

"How do you suppose this roadway was paid for?"

Window shot up, eyes forward! Lol

Okay, back to the thread. Yes, you have to report the >$600. Report the original cost too, so it shows a loss, as so many have stated.

yep...taxes are only theft/evil to those who are uneducated about what taxes do

and often times those same people are exploiting tax based programs to the extreme...

I have no problem with the idea of giving my tax info to PayPal for how I use it. In fact, it makes it easier for me to keep track of taxes and my private lessons...I just don't trust giving out my tax info over the interwebs. If I could hand it to someone in person, no problem
 

Stroman

Platinum Member
If you sell something it's income isn't it.


If you are a plumber, drumming is your hobby and you can't generally claim a drum kit as an expense.
That first statement is something that people are often confused about. Income does not equal profit. They're thinking, "But I lost money?? How can it be income???"

The second part of the quote is where I think people get upset when they're selling off gear. "If I can buy something, and then sell it later at an understandably lower price, how can I be responsible for reporting the sale as income if I am not allowed to report the purchase as an expense?"

I think that's a legitimate concern.
 

dboomer

Senior Member
The current standard deduction is $12500 for individuals, it has nothing to do with expenses/deductions on a Schedule C.

Maybe I’m confusing that with a pass-through-deduction which is 20%. Sure made a big difference when I did my taxes last year using turbotax. So instead of itemizing all my business expenses, I took some standard amount. My amount owed dropped like a rock. But hey, I’m not a CPA
 

toddbishop

Platinum Member
Maybe I’m confusing that with a pass-through-deduction which is 20%. Sure made a big difference when I did my taxes last year using turbotax. So instead of itemizing all my business expenses, I took some standard amount. My amount owed dropped like a rock. But hey, I’m not a CPA

That's the QBI deduction, which I don't understand completely. From what I'm reading about it now it's a deduction against your Sch. C profits-- meaning you still figure a profit/loss based on income/expenses, and take the deduction on the results-- if you showed a profit. It's not meant to be an alternative to calculating expenses.
 

Jeremy Crockett

Well-known Member
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