I have a friend who is wanting me to sale some guitars, a bass, and pedals for him, what would be the best way to do this with Reverbs $600 tax rule to keep me from having to pay taxes at the end of the year, under my name, instead of his? Can I just sale under his account and handle all of the shipping? Has anyone ever done it like this? It’s a lot to move and I’m just trying to help him out, so just curious if I could get some help.
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Reverb Question
- Thread starter nahall8
- Start date
I sold a $4400 bass on reverb 5 months ago. You have to provide tax information for anything over $600, BUT reverb said they don’t report unless you’ve sold $22,000 worth of gear. It was a huge issue in Congress and it got deferred until next year.
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buldog5151bass
Kibble, milkbones, and P Basses. And redheads.
Why not set up the account and help him do the work under his name?
This is what I was curious if I could do, If he sets up the account linking all his banking info, then I just sign in and ship from my home and basically manage the account
buldog5151bass
Kibble, milkbones, and P Basses. And redheads.
Why the @#%%## not? If he doesn't want you with his banking info, you help him set up the Reverb account, you tell him what prices to list, and let him handle that. No reason for you to get deeper involved, especially if he ends up deal8ng with scammers or disgruntled buyers (neve4 mind the tax issues).
Taxes are on profits, not gross sales.
I too am concerned about the new law. The thought of having proof of what you paid for an item possibly 10, 20, 30 years ago seems impossible. If you throw in trades that could include cash how would you account for all that would be required in an audit??
Seems next to impossible to me.
Any ideas?
Seems next to impossible to me.
Any ideas?
Receipts on used equipment are pretty easy to come up with and are always very accurate in reference to the amount paid for the gear.
Person to person used sales/trades should be able to use a signed bill of sale as a receipt. Shouldn't be too hard to "keep track" of those.
Tell that to Reverb and Ebay. They will 1099 on your sales. You would have to prove how much was profit. Unless an item is rare, a collectable or a flip, you never make a profit on something you bought new and re-sell anyway. They even charge YOU sales tax on the shipping that you make nothing on.
You get a 1099-K, refer to:
Understanding Your Form 1099-K | Internal Revenue Service
Reverb and EBay aren’t charging you sales tax, your state is. They are just required to collect it for the state. Send a thank you card to the Supreme Court.
The state charges sales tax on your sale. Reverb and Ebay charge sales tax on your sales and the shipping. It has to do with what THEY collect from the buyer on your behalf not whether it is for sales or for shipping. Wrong IMHO.
^this^
I’ve done this with eBay, gunbroker, etc helping a cousin get rid of a bunch of stuff she inherited when her dad passed. I did all the listings and fielded questions using her account info. When something sold, she got paid and I packed and shipped it. It worked fine because I had the items and was in the info loop so to speak. She would let me know when payment was in her account(s) and I’d pack and ship. I felt it was the best way to avoid any questions about money, or confusion about what needed to be shipped.
Do not attach your name to his account information. Set up the account for him, with his information, and operate it for him. Adding 1099 income (and related expenses) to what was previously a simple W-2 only return adds hassle and expense.
Better yet, just sell locally, with cash. Reverb, E-Bay, etc. are pretty much all for the birds these days. There’s such a large gap between what the buyer pays and what the seller clears that it makes negotiating difficult, among other factors. All for the benefit of what? Having everything collected in one online location, and having mediation supposedly available in disputes? Not a benefit, especially when the mediation staff are practically robots.
Better yet, just sell locally, with cash. Reverb, E-Bay, etc. are pretty much all for the birds these days. There’s such a large gap between what the buyer pays and what the seller clears that it makes negotiating difficult, among other factors. All for the benefit of what? Having everything collected in one online location, and having mediation supposedly available in disputes? Not a benefit, especially when the mediation staff are practically robots.
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Or, you can do what I did. Take the instruments to a music store that will handle Reverb for you. No muss, no fuss. They'll take a cut, but totally worth not having to deal directly with buyers. If your friend wants to sell a bass, tell him to join up here! If nothing else, he'll have a very targeted audience.
