Ebay 1099 threshold

[disneysteve]

I guess I assumed that things such as eBay fees and postage (since I purchased through eBay) would be reflected in the 1099.

No. A 1099 is simply a statement of how much income came in. Expenses are claimed separately on your schedule C. Ebay can't deduct your expenses from the 1099 since they have no way to know what all of your expenses are.

[disneysteve]

If I sell a car I own for $10,000 on eBay, it sounds like I'll have to file a 1099 for that, would that be true? Doesn't matter what the car is/was worth, eBay shows I made $10k in "income". And then I'd have to prove the offset on my taxes, it was actually my car that I purchased for myself, etc, so I shouldn't have to pay "income" tax on that $10k.

That's kind of a pain, if it's true...

This has always been how taxes worked though. Nothing has changed. If you sold a car for $10,000, legally you were supposed to report that $10,000 on your taxes. It didn't matter if you got a 1099 or not. You could offset that by saying you paid $20,000 for the car and thus you'd owe no tax, but the income has always been reportable.

[disneysteve]

What has changed is the reporting threshold for electronic transactions, but the actual tax laws haven't changed at all. Legally, if you make $300 cash at a yard sale, you're supposed to report it. Nobody does but legally you're committing tax evasion when you fail to report that income.

The change now is that with electronic payments like PayPal, Venmo, CashApp, etc. it you have over a certain amount of income for the year, the processor has to issue you a 1099 which then forces you to report it on your taxes. The point is to cut down on all of the tax evasion that has been occurring. Prior to this year, you could earn $19,999 on ebay and not get a 1099 so many of those sellers didn't report their income. There are over 18 million sellers on ebay alone and they sold over $70 billion worth of merchandise in 2022 so you can see how tax evasion would be a huge problem. Add in Mercari and Poshmark and Depop and Etsy and every other platform and you're talking billions of uncaptured tax revenue.

[LivingAlmostLarge]

The problem somewhere like eBay is the tax cheats are a problem for the rest of us who do it right. It’s challenging to compete with sellers who don’t pay 25% to the IRS.

Except at least with gambling I don't think most people even remember what they win and lose other than a 1099G. I have yet to meet a gambler who came out ahead. Maybe the ebay but that's not gambling.

[disneysteve]

Except at least with gambling I don't think most people even remember what they win and lose other than a 1099G. I have yet to meet a gambler who came out ahead. Maybe the ebay but that's not gambling.

True. Nobody ever brags about their gambling losses, only their wins. And most people don't keep track either way.

ebay, however, is a business venture. You need to keep records of your cost of goods, packing materials, ebay fees, store subscription cost, mileage for sourcing, and any other expenses so that you can deduct them at tax time. In the case of a one-off sale like a car, I suppose all you need is proof of original cost to show that no taxable profit was made.

[kork13]

ebay, however, is a business venture. You need to keep records of your cost of goods, packing materials, ebay fees, store subscription cost, mileage for sourcing, and any other expenses so that you can deduct them at tax time. In the case of a one-off sale like a car, I suppose all you need is proof of original cost to show that no taxable profit was made.

It really depends on how it's used. For me, eBay is nothing but an avenue to offload unwanted stuff -- not a business, and not looking for a profit. Somebody like me isn't going to keep much in the way of records because mostly there's typically no profit, and it's only occasional sales.

Someone like you, a dedicated seller? Totally different experience & perspective. You've got hundreds of active listings, $1000+ in monthly profits.... If someone like you doesn't keep good records for tax purposes, they're either crazy or criminal.

[EasyMoney00]

PSA...looks like the threshold for 2025 is $2,500. Then $600 for 2026.

I don't have anything else to sell at the moment so we'll see if I sell anything in the new year.

[disneysteve]

PSA...looks like the threshold for 2025 is $2,500. Then $600 for 2026.

I don't have anything else to sell at the moment so we'll see if I sell anything in the new year.

I hadn’t seen that yet. Makes no difference to me but the question comes up a lot.

Again keep in mind that the threshold varies by state so even if your sales are under the Fed cutoff you might still get a 1099 if you’re over the state cutoff.

[EasyMoney00]

https://www.ebay.com/help/selling/fees-credits-invoices/ebay-form-1099k?id=4794

I assume this is official straight from eBay. That is true. I always forget about state by state.

[disneysteve]

I assume this is official straight from eBay. That is true. I always forget about state by state.

Yep. It’s $1,000 here in NJ and some states have already adopted the $600 limit.

[Like2Plan]

If I sell a car I own for $10,000 on eBay, it sounds like I'll have to file a 1099 for that, would that be true? Doesn't matter what the car is/was worth, eBay shows I made $10k in "income". And then I'd have to prove the offset on my taxes, it was actually my car that I purchased for myself, etc, so I shouldn't have to pay "income" tax on that $10k.

That's kind of a pain, if it's true...

Here is the guidance on the IRS site:
" If you sold personal items


You may get a Form 1099-K for personal items you sold through a payment app or online marketplace.

A personal item is something you owned for personal use such as a car, refrigerator, furniture, stereo, jewelry or silverware, etc.

How you report these payments on your tax return depends on whether you sold the item at a loss or a gain. If you sold a mix of personal items at a loss and a gain, report losses and gains separately. Personal items sold at a loss


A loss on the sale of a personal item can't be deducted from your taxes. But you can zero out the reported gross income so you don't pay taxes on it.

If you sold personal items at a loss, you have 2 options to report the loss: Report on Schedule 1 (Form 1040)


You can report and then zero out the Form 1099-K gross payment amount on Schedule 1 (Form 1040), Additional Income and Adjustments to Income PDF.

Example: You receive a Form 1099-K that includes the sale of your car online for $21,000, which is less than you paid for it.

On Schedule 1 (Form 1040):

• Enter the Form 1099-K gross payment amount (Box 1a) on Part I – Line 8z – Other Income: "Form 1099-K Personal Item Sold at a Loss, $21,000"
• Offset the Form 1099-K gross payment amount (Box 1a) on Part II – Line 24z – Other Adjustments: "Form 1099-K Personal Item Sold at a Loss $21,000" "

More details found at this link to: https://www.irs.gov/businesses/what-...th-form-1099-k

Hopefully you would have documentation for the cost of your car --that would be your original basis. As noted above, in this case you can not write off a loss, but you can zero out any gain (assuming you sold it for less than what you bought it for)

[crazyliblady]

Does anyone know the threshold for ebay to send a 1099? Ive heard rumors of a $5,000 limit, others stated possibly $600. Obviously you're supposed to claim profits either way but would just make things easier if the IRS forced ebay to lower the threshold and did the leg work for you.

I was just looking this up myself. https://www.irs.gov/businesses/understanding-your-form-1099-k#:~:text=Form%201099%2DK%20is%20a,party%20settlem ent%20organizations%20or%20TPSOs