Will the new changes to IRS reporting requirements add significant cost to the secondary market?
I am not a tax lawyer or a accountant but it seems to me like the change in reporting requirements means that each transaction loses ~20% to the government.
For example:
If I sell a set of wheels for $1000 + $50 shipping and the buyer pays through PayPal as goods and services this gets reported to the IRS as $1050 in income to me on a 1099-K. Do I now owe the federal government $231 in income taxes not including what I have to pay to my state?
If this is true, should will we see dramatically higher prices in the secondary market as people try to cover their own income tax?
I am not a tax lawyer or a accountant but it seems to me like the change in reporting requirements means that each transaction loses ~20% to the government.
For example:
If I sell a set of wheels for $1000 + $50 shipping and the buyer pays through PayPal as goods and services this gets reported to the IRS as $1050 in income to me on a 1099-K. Do I now owe the federal government $231 in income taxes not including what I have to pay to my state?
If this is true, should will we see dramatically higher prices in the secondary market as people try to cover their own income tax?