Welp, looks like I'm done selling on Reverb.

Soundstorm

Soundstorm

Well-known member
Got a 1099-K for a whopping $23k in sales on Reverb. Luckily, I was able to deduct way more than that due to studio costs. My CPA warned me they're also going to collect date from any Goods and Services PayPal transactions moving forward. So I'll have to stick to forum deals, Friends and Family only transactions moving forward. See, this is what happens when politicians act like they're going to force the "Billionaires" to "pay their fair share". Capital gains taxes affect anyone, and the ultra rich will most likely find new ways to maneuver, while lots of regular people won't.
 
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I think if you itemize, you only have to pay taxes on profits. I’m not entirely sure if that’s the rightt language but it’s something like that. Can you ask your CPA about that?
 
phillybhatesme said:
I think if you itemize, you only have to pay taxes on profits. I’m not entirely sure if that’s the rightt language but it’s something like that. Can you ask your CPA about that?
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Yeah, I believe the way it works is the cost of the purchase and the amount of the sales offset each other. So previously let's say I had 50k in expenses, under the umbrella of "studio equipment, music gear, etc", then I would have 50k of purchases I could claim as business expenses. And unless you were a reseller or were making profits on the sales, you didn't have to claim anything for it. But now if I turn around and sell 25k of that gear to recoup some costs and try new gear in the process, I only have 25k in deductions. I'll run it by him again though just to be sure.
 
Soundstorm said:
Yeah, I believe the way it works is the cost of the purchase and the amount of the sales offset each other. So previously let's say I had 50k in expenses, under the umbrella of "studio equipment, music gear, etc", then I would have 50k of purchases I could claim as business expenses. And unless you were a reseller or were making profits on the sales, you didn't have to claim anything for it. But now if I turn around and sell 25k of that gear to recoup some costs and try new gear in the process, I only have 25k in deductions. I'll run it by him again though just to be sure.
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I'm confused tbh. Your post sounds like you were buying 50k of gear and then selling 25k worth all in the same year?

Technically you should've been paying taxes on profits from gear sales the whole time whether it was reverb, ebay, a forum, or face to face in cash. If you are selling at a loss then that loss should be documented and part of your write offs.
 
VonBonfire said:
I'm confused tbh. Your post sounds like you were buying 50k of gear and then selling 25k worth all in the same year?

Technically you should've been paying taxes on profits from gear sales the whole time whether it was reverb, ebay, a forum, or face to face in cash. If you are selling at a loss then that loss should be documented and part of your write offs.
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VonBonfire said:
I'm confused tbh. Your post sounds like you were buying 50k of gear and then selling 25k worth all in the same year?

Technically you should've been paying taxes on profits from gear sales the whole time whether it was reverb, ebay, a forum, or face to face in cash. If you are selling at a loss then that loss should be documented and part of your write offs.
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Well the 50 and 25 was just used as an example. But I do a lot of buying and trying and selling. Both with amps and pro audio gear. I move a lot of stuff.

And previously, you only paid taxes on purchases from Reverb. Now since tax laws have changed, people are getting a 1099-K for their sales. Right now it's anything over 20k in sales. Next year iirc it goes to $6500, and then after that $600. It's up to you whether you want to file that form at the end of the year. If you do, you'll need to provide receipts to prove that you made no profit from the sales, if you were typically selling at a loss. If you don't file it, you risk being audited.
 
Eh, I wouldn't worry too much. I filed my taxes in January and the IRS still hasn't processed it. You're likely looking at a 2-3 year wait until they have anyone to look at your situation.
 
I stopped using Reverb because the fees force me to increase the price too much. Forums can be great for lower prices and less tax issues, but you gotta watch out for those accounts that have been dormant and then someone hacks into and posts a fake amp for sale. Yes, I fell for one of those, but I was fortunate to get my money back. Reverb or Forums: pick your poison.
 
Soundstorm said:
And previously, you only paid taxes on purchases from Reverb. Now since tax laws have changed, people are getting a 1099-K for their sales. Right now it's anything over 20k in sales. Next year iirc it goes to $6500, and then after that $600.
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I get what you are saying but going completely by the book you should've been filing for any and all profit above $600 all along and if you had been an actual "business" or "vendor" you would've been doing that. This is no different than doing a gig where the sum total of yearly payment from a given venue exceeds $600. You're getting 1099'ed. I think the idea is to crack down on people who aren't paying taxes and have been using reverb/ebay/etsy/etc as a source of income/employment, hence the step down from over 20k, to 6.5k, to the standard over $600, giving people time to get their stuff together.
 
VonBonfire said:
I get what you are saying but going completely by the book you should've been filing for any and all profit above $600 all along and if you had been an actual "business" or "vendor" you would've been doing that. This is no different than doing a gig where the sum total of yearly payment from a given venue exceeds $600. You're getting 1099'ed. I think the idea is to crack down on people who aren't paying taxes and have been using reverb/ebay/etsy/etc as a source of income/employment, hence the step down from over 20k, to 6.5k, to the standard over $600, giving people time to get their stuff together.
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Well the problem is that none of these sales are profits. I understand who they're going after, but I don't think that accounts for the vast majority of Reverb users. Now what happens if you sell a few amps you've had for years and don't have any documentation for? Boom, those sales are now considered profit. Prior to this new law, I would've been able to claim just the purchase price and taxes as business expenses. Now these sales are deducted from the business expenses and my return is lower.
 
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BABMusic said:
I stopped using Reverb because the fees force me to increase the price too much. Forums can be great for lower prices and less tax issues, but you gotta watch out for those accounts that have been dormant and then someone hacks into and posts a fake amp for sale. Yes, I fell for one of those, but I was fortunate to get my money back. Reverb or Forums: pick your poison.
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Yeah, it's getting bad in the forums. 2 factor authentication and the feedback system is a must at this point. A quick phone call doesn't hurt, either.
 
Yeah the whole 1099 situation sucks. How do I know what I paid for that USA Strat in 2014 that I just sold for $800. I usually just put a reasonable original value on it but it's still just a pain in the rhoids
 
Soundstorm said:
Now what happens if you sell a few amps you've had for years and don't have any documentation for? Boom, those sales are now considered profit.
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You state what you paid for the amp. Unless your return is full of handwritten receipts there won't be much eyebrow raising. They aren't looking for peanuts, they are like cops who are looking for the dude doing 100 in a 50mph zone in his corvette.
 
VonBonfire said:
You state what you paid for the amp. Unless your return is full of handwritten receipts there won't be much eyebrow raising. They aren't looking for peanuts, they are like cops who are looking for the dude doing 100 in a 50mph zone in his corvette.
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You're probably right. I should mention I was audited once years ago and I've been overcautious ever since.
 
Soundstorm said:
Well the 50 and 25 was just used as an example. But I do a lot of buying and trying and selling. Both with amps and pro audio gear. I move a lot of stuff.

And previously, you only paid taxes on purchases from Reverb. Now since tax laws have changed, people are getting a 1099-K for their sales. Right now it's anything over 20k in sales. Next year iirc it goes to $6500, and then after that $600. It's up to you whether you want to file that form at the end of the year. If you do, you'll need to provide receipts to prove that you made no profit from the sales, if you were typically selling at a loss. If you don't file it, you risk being audited.
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I got a 1099-k from PayPal for 3 G&S sales totaling $6300. I paid zero tax as everything was at cost or less. I keep receipts for everything. You don’t file receipts, you just state your cost basis. You only need receipts if you are audited to substantiate the cost basis you reported.

BTW…It’s not too hard to make a purchase invoice (after the fact if need be. Lol) for the cash purchase you made from some rando on CL
 
RedB4Black said:
I got a 1099-k from PayPal for 3 G&S sales totaling $6300. I paid zero tax as everything was at cost or less. I keep receipts for everything. You don’t file receipts, you just state your cost basis. You only need receipts if you are audited to substantiate the cost basis you reported.

BTW…It’s not too hard to make a purchase invoice (after the fact if need be. Lol) for the cash purchase you made from some rando on CL
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Can you clarify if one must itemize deductions in order to claim losses on sales from a 1099-K? Or can you do this while taking the standard deduction?
 
Soundstorm said:
Got a 1099-K for a whopping $23k in sales on Reverb. Luckily, I was able to deduct way more than that due to studio costs. My CPA warned me they're also going to collect date from any Goods and Services PayPal transactions moving forward. So I'll have to stick to forum deals, Friends and Family only transactions moving forward. See, this is what happens when politicians act like they're going to force the "Billionaires" to "pay their fair share". Capital gains taxes affect anyone, and the ultra rich will most likely find new ways to maneuver, while lots of regular people won't.
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The Tax Man has got his hands in everything and every part of our lives, fuck that. :mad: I'm sick of it!
 
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