20K Total - REFUNDS

[questionofday]

I just spoke with someone at PayPal who said that when I issue a REFUND that counts as a transaction so

1) if you sell, refund, and resell an item - that's 3 transactions (toward your 200 total) and

2) that's 2X the "sales" volume reported, cause you "sold" it twice

I'd been keeping track and was under the 20K/200 sales until I learned this - if true, then I'm over. Done.  One purse I had to return and relist twice, was $800 purse, so counted as 5 transactions and $2400 in sales, even though in the end I only made $800

someone please tell me this isn't true...

[questionofday]

likewise - if you "sell" a item, they don't pay and you have to cancel the order...then you relist and sell, that's TWO sales as far as 20K and 200 items sold

[Whac-A-Mole]

the refund is a credit transaction meaning it reduces your gross sales,so it washes out your original payment which is a debit.

you sold a purse for $800.

you refund $800.

net result =0

and your 1099k total effect is zero/

but transaction count,yes it counted 2. 

the IRS 1099 requirement is 200 transactions AND $20,000.

So a refund may push it over 199,but reduces your $$ 

[sharpiemarker]

No, adjustments will not be taken into account when calculating the 20K requirement.  You can deduct the adjustments later when preparing your tax return but that has no influence on determining if you get a 1099 or not.

"As required by the rules, the $20,000 will be calculated by looking at a seller’s gross payment volume for sales of goods or services. Gross amount means that any adjustments for credits, cash equivalents, discounts, fees, refunded amounts or any other amounts will not be netted out.

In addition, the reported amount will include any shipping and handling, sales tax or other fees which are included in payments you receive. We realize that these amounts may or may not be included in your taxable income, but we are required to report them. You should work with your tax advisor to determine how these items should be treated for tax purposes."

And, if you sold something but a PayPal payment hasn't been recorded for it (the buyer didn't pay) it doesn't count.

[Whac-A-Mole]

My apology,Sharpie is right,refund is not counted in gross,you have to remove it yourself.