IRS Delay on reporting sales

[Brad Little]

Haven't seen this here, but might be of interest to some who sell on line.
IRS Delay

 

[Harp Tail]

Very interesting. Thanks!

 

[HeyMikey]

It kind of sucks they communicate this at the end of the year. They did the same thing last year. Is it going into effect come Jan or will they scrap it again late next year? I don’t like playing Russian Roulette. Cash or checks only thank you.!

 

[Guildedagain]

How strangely coincidental to reveal this just in time for black Friday.

 

[Default]

"IRS officials say one reason for the delay is taxpayer confusion over what sorts of transaction are reportable.

For instance, peer-to-peer transactions, like selling a couch or car, sending rent to a roommate, and buying concert tickets would not be reportable, whereas other purchases would apply."

If I sell some of my "furniture", maybe I can buy a birth year "couch".

 

[HeyMikey]

That statement in and of itself is confusing. How would “buying” concert tickets ever require you the buyer to report the sale? That would be on the seller. And what that absolute xxxx are these “other purchases” that would apply?

There is taxpayer confusion because the government has no definitive idea themselves. I’ve asked three of our State senators with whom I communicate periodically for clarification last year. Each one had a different interpretation of what they thought the law implied and what I had to report. So when the IRS comes after me I’m sure they’ll accept those different points of view.

Maybe this should be moved to ROTD.

 

[Default]

Upshot is, we can sell guitars without capital gains being declared.

 

[Harp Tail]

Upshot is, we can sell guitars without capital gains being declared.

Which, incidentally, the billionaires always find legal ways to avoid doing.

 

[fronobulax]

Upshot is, we can sell guitars without capital gains being declared.

Not technically true. If the sale generates taxable gains according to existing tax law then you are liable to pay tax on those gains.

The reporting requirement is extremely flawed in that the reporting requirement includes transactions that will never generate taxable income, such as buying goods and services. It also creates a new burden on taxpayers. Previously the IRS trusted taxpayers to report sales activity that generated taxable gains. The reporting requirement now forces the taxpayer to be prepared to prove that whatever activity was reported was not generating taxable income. There are many situations where casual buying and selling of guitars does not generate taxable income but with the reporting requirement you now have to explain that to the IRS.

This is not a change in tax law, rather it is a change in the ability to detect violations of the existing law. An analogy to red light cameras may be helpful. Introducing automated red light cameras did not change the law about running red lights. What the introduction did do was catch and fine more violators but at the cost of ticketing people who did not break the law but did trigger the camera's detection algorithm.