Tax Due On Third Party Payer Sales

[Christian]

A client's daughter sold a bunch of items on Ebay and now has received a listing which shows over $11,000 in items sold. In my tax education this year I read that the IRS had suspended tax on these earnings for 2023 much as was done in 2022 until congress could decide a more reasonable amount for these earnings to tax. Am I correct on this and does someone possess an article on this. I recall reading it in Kiplinger's and intended on saving that issue but health issues this year served to confound my usually good work habits.

[Medlin Software, Dennis]

Reporting the taxable income has not changed. What has/will change is the threshold for the electronic payment vendors to report 1099 data. A big for instance, I was able to get some Adele Las Vegas tix for the original dates. When she bailed at the last minute, we bailed as well, selling then for a HEFTY markup (paid for a fam trip to the Mouse). Just because I am not getting a 1099 does not mean the profit is "tax free".

[Lee B]

  Perhaps you're thinking about the delay in filing 1099 K, which did not suspend the tax.

Sounds like reportable income to me.

[Lee B]

See IRS Fact Sheet 2023 - 27:

https://www.irs.gov/newsroom/irs-announces-2023-form-1099-k-reporting-threshold-delay-for-third-party-platform-payments-plans-for-a-5000-threshold-in-2024-to-phase-in-implementation

[Christian]

Yep sure does and of course the IRS has sent a list evidently provided by Ebay of each item and what she got for it. Needless to say it will not be yours truly sorting all that out.  

[BrewOne]

had a (former) client got caught in a similar situation--no mention to me of their buying and selling and possibly no 1099-K, but the IRS knew the amount they sold on eBay.  When I told them they would need to know what they paid for every item they sold, they had a hissy fit.  Since I had no idea how long this had been going on (possibly for years), I told them I wouldn't handle it and recommended they get a tax attorney.  Their new CPA wanted to know why I didn't want to handle such a simple matter and I told him I'd retired.