Discussion:1099-K wreak havoc?

I had a call from a client in southern California, who files Sch A, B & occasional D with her husband. Amazon has contacted her regarding the sales generated by her selling of books through them......used books she, hubby and her late parents bought through the years. These are not collectibles but she has grossed more than $600 so far this year, and Amazon wants her SSN etc. Naturally most of these books are being sold for much less than the original amount paid.

This does not sound like an attempt to make a profit (do remember, she is 3000 miles away from me, so I cannot see the inventory), but it is not a loss either......it is just one more thing to be put on the list of items that we will see pop up this year.

And if the return is efiled, you know that any statement attached which says she has a 1099-K for $912 but her costs of purchasing the books is greater, but the activity does not rise to the level of trade or business, will not be transmitted or read.....so hear come the CP-2000s.

Now the form itself becomes the fact. If Joe Stalin came back today and learned about the 1099, he would say, "Why didn't I think of that?"

It's the fact of the matter and not the truth of the matter that counts.

"Both of you are getting hung up on taxability " That's only half true -- only D&T brought up the issue of taxability.

I recommend to my clients they get a W-9 from anyone they will likely be required to send a 1099. I would guess that Amazon and e-bay have a lot of people who will not need to be issued a 1099, hence my statement that I think they are creating more work than is necessary (and churning up a lot of anxiety among their sellers as well).

Badda bum.

from my friend Paul Mulshine