Tax consequences of paypal Options

[sixaddict]

Well we were all aware of this coming but just got my love letter 1099 from PP.
Trying to figure how to handle.
Anyone have legitimate advice?
Obviously the 1099 is gross income……but that would be if cost basis was zero and that is not the case. If you don’t itemize how do you get a fair assessment.
Wont get into political weeds but this is BS.

[Patrick_139]

Well we were all aware of this coming but just got my love letter 1099 from PP.
Trying to figure how to handle.
Anyone have legitimate advice?
Obviously the 1099 is gross income……but that would be if cost basis was zero and that is not the case. If you don’t itemize how do you get a fair assessment.
Wont get into political weeds but this is BS.

Not ashamed to say I worked for and retired from the IRS. The links below are your best starting point as they are from the IRS. In this case do your best in calculating what you paid for the items so that you are only taxed on the gain. The big questions are going to be: Are you running a business or are you a sometime seller of old parts you no longer need? If you sold them for more than you paid for them are these capital gains or income? Obviously if you paid more for the items than you sold them for you are going to report no gain/income, but to keep the nasty letters from IRS arriving you will want to report something even if it is $0.00.

https://www.irs.gov/businesses/what-to-do-with-form-1099-k

https://www.irs.gov/businesses/understandin...our-form-1099-k

https://www.irs.gov/pub/irs-pdf/f8949.pdf

https://www.irs.gov/pub/irs-pdf/f1040sc.pdf

Pretty sure the purpose of lowering the reporting requirements is too identify (catch?) the income of professional sellers operating on multiple platforms who have not been reporting their sales because there was no identifying their sales to the IRS in the way that one's employer reports employee's income. The law did not change just the reporting requirements, but sadly small sellers are going to get caught up in the requirements. One thing I do know is that the IRS has bigger fish to fry than someone who has a 1099K for thousands of dollars and reports something (anything?) for income/capital gain vs someone with 10s of thousands reported who reports nothing/ignores the 1099K.

Feel free to ask me anything more about this, but in general tax advice is usually worth about what you paid for it and I did not do auditing in my career so there is that.