The American Rescue Plan Act - FYI for forum sellers

[Orthin]

So someone brought this up to me at work and this is the first I have heard of it but apparently The American Rescue Plan Act Section 9674 will required third party transaction sites (paypal, venmo etc) who have been using the sites and bring in $600 or more to be reported to the government. Apparently the old threshold was 20k. Those individuals who meet the criteria will then be issued 1099 and be taxed on the money brought in. This goes in to effect 01/01/2022.

Passing this along since I know folks use paypal and other ish for sales and I doubt they reach 20k but I can bet they reach $600. I didn't really do any digging on this so there could be more to it but when it was brought up I thought I should at least pass this along to the good ole peeps here for vetting or to mentally bank

[Tgo01]

Well this sounds like bullshit. So they are just assuming that anyone who receives 600+ dollars that the money is all taxable income?

The Democrats have gotten drunk with power.

[Orthin]

and it may be a single transaction = $600 or more versus $600 total received through that service in the course of a year. Again I didn't really do any legwork, but it seemed worth sharing for those who didn't know

[Neveragain]

So someone brought this up to me at work and this is the first I have heard of it but apparently The American Rescue Plan Act Section 9674 will required third party transaction sites (paypal, venmo etc) who have been using the sites and bring in $600 or more to be reported to the government. Apparently the old threshold was 20k. Those individuals who meet the criteria will then be issued 1099 and be taxed on the money brought in. This goes in to effect 01/01/2022.

Passing this along since I know folks use paypal and other ish for sales and I doubt they reach 20k but I can bet they reach $600. I didn't really do any digging on this so there could be more to it but when it was brought up I thought I should at least pass this along to the good ole peeps here for vetting or to mentally bank

They tried going after game currencies a few years back as well. They retracted only because it's a giant cluster fuck of a venture that needs more time to straighten out.

Eventually, probably sooner than later, games will be required to use a universal currency.

[Tgo01]

and it may be a single transaction = $600 or more versus $600 total received through that service in the course of a year. Again I didn't really do any legwork, but it seemed worth sharing for those who didn't know

I looked it up, it's 600 dollars in total no matter how many transactions it takes to reach 600 dollars.

The previous way was 20k dollars AND at least 200 transactions. Now it can just be one transaction of 600 dollars or 2 transactions of 300 dollars each.

Although from everything I have read this sounds like it just pertains to people/companies performing services or selling goods, no idea if that pertains to selling virtual goods but I have a feeling it will.

If the IRS is going to deem selling virtual goods to be "selling goods" and thus taxable are they only going to tax the profit? For example if someone spent 1000 dollars on Simucoins and sold the BS they made for 1200 dollars is the IRS going to consider the whole 1200 dollars taxable or just the 200 dollars?

This all sounds like a huge mess.

[bemental]

and it may be a single transaction = $600 or more versus $600 total received through that service in the course of a year. Again I didn't really do any legwork, but it seemed worth sharing for those who didn't know

This is going to be a shit show.

I’ve used services like these to collect rental income instead of checks, so now there will have to be some sort of reconciliation process.

Also, this doesn’t really make sense.

If I deposit cash into my checking account, I don’t have to account for it with a separate statement or fact on my tax return. It’s reported as as single number as a source of income.

Again, this is going to be a shit show.

Does the IRS expect me to depreciate and itemize every single piece of furniture I’ve bought over my lifetime so when I sell it on Craigslist I can deduct the cost over time from the cash I received to my Venmo?

[emoji2364]

[Tgo01]

Does the IRS expect me to depreciate and itemize every single piece of furniture I’ve bought over my lifetime so when I sell it on Craigslist I can deduct the cost over time from the cash I received to my Venmo?

This is the type of shit I'm wondering if they decide to tax virtual sales.

Someone has owned their character for 10 years, been paying premium/40 dollars a month for the character, that's 4,800 dollars the person has put into this character, they sell said character for 3k, is the IRS going to consider all 3k profit or will they allow the person to deduct the 4800 dollars they put into the character? Is the person going to be required to keep receipts during that entire 10 year period in order to deduct the 4800 dollars?

The funniest part is this was all stuffed inside of that stimulus bill where we received a whole 1400 dollars. So much for a "stimulus."

[Roblar]

I don't think this would apply as most GS transactions are done as family/friends and wouldn't consitute commercial activity.

[Tgo01]

I don't think this would apply as most GS transactions are done as family/friends and wouldn't consitute commercial activity.

I guess we'll all find out in a few months if we start receiving tax forms from Paypal.

[Roblar]

You wouldn't find out until Jan 30th 2023.

I expect pushback or modification between now and then.

[Neveragain]

Does the IRS expect me to depreciate and itemize every single piece of furniture I’ve bought over my lifetime so when I sell it on Craigslist I can deduct the cost over time from the cash I received to my Venmo?



When the Berlin wall came down, Russian citizens were burning furniture as a heat source.

You may want to keep this in mind if, as promoted by Rachell Maddow, the Russians cyber attack our gas lines.

[Tgo01]

You wouldn't find out until Jan 30th 2023.

I expect pushback or modification between now and then.

I thought I read somewhere this goes into effect in 2022 for the 2021 tax year, which would mean we would be receiving the tax forms in a few months. Unless I read that wrong.

[Roblar]

I've read for transactions beginning Jan 1st, 2022 so the following year's returns. That would make sense too as third party settlement organizations would need time to collect Taxpayers ID numbers and adjust processes. If you haven't been asked yet doubt they will get them out in time for this last year.

Either way, the threshold is likely too low and will be changed, there will definitely be a backup from all the extra 1099 and collections for all these trasnactions. Probably also political pressure on the Democatic party in control from some of their base (lower income hustle economy Uber/Lyft driving etc).

No wonder they want to expand the IRS ha. This will definitely be a large bureaucratic growth and is only one aspect.

[Shaps]

Been saying it for years... eventually it will get to something you care about... keep giving them power and it never stops...