Hi, i understand under new IRS rules that accounts that have over 200 transactions and gross 20,000$ are required to report their sales as income. My question is if i just stop short of 20,000$ then use my wife's paypal account for the rest of the year, does that allow me to continue selling without having to report the sales as income?
For example:
I use my account until sales hit : 200 sales / 19,900$ gross
then we switch to my wife's paypal account and then make another 200 sales / 19,900$ gross
at the end of the year, do we need to report those sales to the IRS?
I registered with paypal several years ago... Question # 1 - does Paypal already have individual SSN's registered with each account? If yes, then I understand how they can link any multiple accounts you may have together. If not, how will they be able to link them?
& Question # 2 - if a spouse (different SSN) sets up a new paypal account, are you able to continue with the existing ebay user ID? or do you have to set up a brand new ebay account AND paypal account under the new individual...
To answer question # - If you signed up for a PayPal account and provided your SSN# when you sign up for a PayPal account we would already have it. We can link your PayPal accounts together with several factors such as name, address, or phone.
To answer question #2 - I would contact eBay to see if you are able to continue with the existing eBay user ID or if you have to set up a brand new eBay account.
Did you ever find out if you could keep the same user ID? I know you can designate which paypal address you want your payment to go to during the listing process. I would think you can use the same user ID.
So if i am understanding this new rule correctly then i would need to have both 200 transactions AND $20,000+ in Sales. By transactions, is that meaning # of sales or sales and withdraws both? If i am understanding this correctly then i could sell 100 vehicles at $10,000 apiece grossing $1,000,000 and this would not be reportable? (just an example)
Yes, you are correct, "So if i am understanding this new rule correctly then i would need to have both 200 transactions AND $20,000+ in Sales." In regards to, "If i am understanding this correctly then i could sell 100 vehicles at $10,000 apiece grossing $1,000,000 and this would not be reportable?" - PayPal is not required to report it however, I would contact a tax consultant for legal advice on how to report your income if PayPal does not report it.
Did anyone find out the answer to ucla_phil's first post? I'm also running into this confusion and been doing research online until coming upon this thread. Is it perfectly fine to let another household member (with their own paypal account) do the selling with the same ebay account when I've reached my $20k limit? I found out there are plenty of restrictions for a new seller account if the household member tries to create a new one to use. If it's getting that tough, I think we'll just quit ebay in the end. It's was fun while it lasted. With all the work and now having to go through all these tax stuff, it's just not worth the time anymore.
Misty
