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Old 05-24-2011, 03:10 PM   #151 (permalink)
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Thanks for all the great responses folks.

"An activity is presumed for profit if it makes a profit in at least three of the last five tax years, including the current year."

That is a very interesting quote, thanks for bringing that up. I will ask my accountant about it when I speak to her again next week. I did tell her that I do expect to make a profit when I sell EVERYTHING from the cases I buy. This will include sales on cards that I hold for more than a year and thus carry over as inventory. This is generally true, I am very close to making a profit so far in 2011, and with my successful 2011 Bowman break (10 cases) I should be in the green by the end of the year as long as I don't pick dogs like 10-11 Classics basketball anymore.

But it's good to know what to watch out for if I start losing money. I'll ask her about it. She's probably looking into it already.
And that's really one of the key statements you just made. If you rip cases and keep some PC cards, it'd be pretty hard to "write-off" the case as a business expense; wouldn't it? That's kind of the point between business/hobby. If you are keeping some and aren't in it solely to make a profit, odds are you are a hobby, not a business.

But if you buy the case, rip it and literlly flip the entire contents (even if it's not in one year), then it would be a business activity whether you generate a profit or a loss.
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Old 05-25-2011, 11:38 AM   #152 (permalink)
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ok, so say I buy a case of cards for $1000, break it and sell cards for a total of $800. I would report the $800 as income and could claim up to $800 as an itemized expense as I made no net profit? (all this being done as a hobby, not as a business?)

Yes, I just sat here and read the entire thread and its not clear to me (hey, I'm just an engineer, not a CPA). And this is all theoretical since I havent actually sold anything yet (but I may at some point this year).

Ahh screw it, I'm just gonna stay a collector for now.
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Old 09-21-2011, 02:55 PM   #153 (permalink)
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ok, so say I buy a case of cards for $1000, break it and sell cards for a total of $800. I would report the $800 as income and could claim up to $800 as an itemized expense as I made no net profit? (all this being done as a hobby, not as a business?)
Thats whay I was talking about hoby income earlier. If they IRS deems it a hobby you can't write off anything.
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Old 09-21-2011, 03:13 PM   #154 (permalink)
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Thats whay I was talking about hoby income earlier. If they IRS deems it a hobby you can't write off anything.
Doesn't mean you can't write them off. Just the placement is different. Becomes an misc. itemization and subject to a 2% AGI limitation instead of a business expense. It's a FROM AGI deduction rather than a FOR AGI deduction, which means you only take it if you 1) itemize, 2) have hobby expenses that exceed 2% of your income. You also can only claim hobby expenses to the extent you have hobby income - you can't generate a loss from it.
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Old 10-08-2012, 12:52 PM   #155 (permalink)
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This should be a sticky and every other tax question be asked in here.
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Old 10-08-2012, 03:23 PM   #156 (permalink)
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This should be a sticky and every other tax question be asked in here.
I agree--I'm going to stick this damn thing in my sig
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Old 10-08-2012, 05:11 PM   #157 (permalink)
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I have a dumb question regarding this. Do you have to file for $20,000 AND 200 payments received or can they make you file with just 200 payments received. I am wondering this because I am getting close to 200 payments received for the year but nowhere close to 20k. Also, do those 200 payments include gift and goods, or just goods. I am wondering this because I have had a few people send me gift payment over the year. Thanks in advance. Much appreciated.
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Old 10-08-2012, 05:19 PM   #158 (permalink)
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I have a dumb question regarding this. Do you have to file for $20,000 AND 200 payments received or can they make you file with just 200 payments received. I am wondering this because I am getting close to 200 payments received for the year but nowhere close to 20k. Also, do those 200 payments include gift and goods, or just goods. I am wondering this because I have had a few people send me gift payment over the year. Thanks in advance. Much appreciated.
gift is not included.
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Old 10-08-2012, 05:20 PM   #159 (permalink)
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gift is not included.
Does it matter if I have like 300 payments but under $20,000 or is it 200 payments AND $20,000?
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Old 10-08-2012, 05:23 PM   #160 (permalink)
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Does it matter if I have like 300 payments but under $20,000 or is it 200 payments AND $20,000?
200 payments AND $20,000?

you need to have both.
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Old 10-08-2012, 05:30 PM   #161 (permalink)
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200 payments AND $20,000?

you need to have both.
You need to have both to get the PayPal 1099. You have to file regardless if you have income from selling.

Just read the thread guys.
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Old 10-08-2012, 05:33 PM   #162 (permalink)
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200 payments AND $20,000?

you need to have both.
And this is why tax advice should be given by a CPA
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Old 10-08-2012, 05:35 PM   #163 (permalink)
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Does it matter if I have like 300 payments but under $20,000 or is it 200 payments AND $20,000?
It's 1 sale and 1 payment.

Yes I realize it's like jaywalking.

The IRS and Paypal are not the same thing.
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Old 10-08-2012, 05:37 PM   #164 (permalink)
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It doesn't matter if it's 1 transaction or 100,000,000 transactions. It doesn't matter if it's $1 income or $100,000,000. You have to pay taxes regardless. Just read the thread. This is why a sticky on this isn't going to matter - people will ask the same questions that have been answered in here 10x over.
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Old 10-08-2012, 05:38 PM   #165 (permalink)
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Does it matter if I have like 300 payments but under $20,000 or is it 200 payments AND $20,000?
Where in ND are you??
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Old 10-22-2012, 11:05 AM   #166 (permalink)
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As I was sitting here getting ready to send my money to the IRS for money owed due to the 1099 I thought I would chime in about the paypal transaction "rules". They say it is for 200 transactions AND 20k. Well apparently I was an anomoly. I received a 1099 for roughly 7k in transactions. I may have crossed the 200 transaction mark but I'm not positive. I did not meet both criteria and I did not receive the 1099 until after taxes were due. I had already filed mine so I needed to file an extension. I have CC receipts showing my purchases but I owe some money back. I was not expecting this and had almost completely stopped selling in 2012 due to the new reporting.

I also had not received any notification in my paypal account until after the filing deadline. Most people said they had received notification on there and the 1099 but I didn't. I contacted paypal and they told me I received one because I had multiple address/accounts linked. Not sure what that had to do with it but that's what they told me. I also should note that they never asked me for my tax ID # or to add my social to the account.

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