Get a better accountant. There is NO reason to pay income tax on proceeds from selling personal property, it's simply NOT income. You still have to declare it and the 1099-K, but you can reduce it by the cost of the goods.
What you can't do is take a loss and reduce your taxable income.
Mike,
The 1099 sent to the IRS by eBay simply tells them that a transaction over a certain dollar value took place, and what that value was. It does NOT mean that taxes are owed. I second rplst8 on this one. You need a new accountant.
Mike
@Mellow Hudson Mike posted:Mike,
The 1099 sent to the IRS by eBay simply tells them that a transaction over a certain dollar value took place, and what that value was. It does NOT mean that taxes are owed. I second rplst8 on this one. You need a new accountant.
Mike
It's not the IRS that's the problem - it's the various states that are looking for their income tax. Turns out that all that stink just a few years ago about internet sales taxes that the states were not getting their cut of also included the state income that they wanted to tax, too.
@mwb posted:It's not the IRS that's the problem - it's the various states that are looking for their income tax. Turns out that all that stink just a few years ago about internet sales taxes that the states were not getting their cut of also included the state income that they wanted to tax, too.
The states are getting their cut. Within the last year or so, sales tax (Minnesota for me) is automatically added at checkout. The very few times I need to return an item, it's always for the pretax amount only, I eat the sales tax. Sellers never see the sales tax, therefor assume eBay collects it.
Here's my 2 cents on a couple issues in this thread.
First of all, since when are winning bidders vultures? Just like on any auction site, live or online, item goes to the highest bidder. The highest bidder does not do anything wrong, they simply bid what they think the item is worth. I can speak from personal experience, sometimes they win, sometimes they lose.
I'll give a couple examples from a Stout auction several months ago at which I won a number of items. As I mentioned in another thread, I bid on many items, because that auction (I think in November) had a wealth of Santa Fe items. So for example I bid $700 on a PAIR of Sunset E8s. I'm much more of an F unit fan, but for Sunset and Santa Fe at 1/2 price, I thought I'd give it a try. I ended up wining for $675. After commission and tax, I paid $832 out the door. Sold the pair on eBay recently for $1250 ($690 for the A and $560 for the B), and after eBay fees cleared $1093, for a "profit" of $261. Had the exact same transaction numbers (except the $1250 was $700 + $550) on a pair of F7s. So that's $522 profit on 2 auction lots. All together, of the items I flipped, I made a total profit of about $1700. However, what I spent minus what I got from eBay is about $3370, meaning that is the cost of the items I kept.
So what did I keep? A pair of Atlas F3s in Santa Fe (which I figure are worth about $300 and $150 at going prices), a Sunset Santa Fe 4-8-4 (which I think is worth about $700), a Weaver Santa Fe 4-6-2 (which might be worth about $300), an unpowered Atlas F7 (worth about $150), a 4 car set of Super Chief cars (plastic, worth about $400), and a 10 car set of Super Chief cars (aluminum, worth about $3000). So because of being able to flip, I feel like I got about $5000 worth of stuff I wanted for about $3300.
Now, on the most recent auction, the topic of this thread, I only won one lot, a set of Atlas WP F3s and 11 zephyr cars. If the zephyr cars only go for $130 and the engines only go for $300, I'll only make about $200 on this flip (which might barely cover shipping). If the zephyr cars go for more like $150 (at least one will go for $300) and the engines go for $400, I'll make more like $600. Ironically, the lots that I wanted to keep a couple items from I ended up not having the winning bid on. In particular, I was eyeing some of the older Atlas F3s in CB&Q, but didn't bid high enough, and one lot contained a zephyr car that I wanted, but that lot went for more than I thought I could make money on.
But even though some items went for more than I thought I could make money on, I think they were still a bargain for someone who was buying to run (at least for the lots for which I had an interest). These F3s I picked up, all powered, cost me less than $300 out the door, and the zephyr cars were a little under $100 each out the door. The main type of items that I thought were overpriced (but maybe that is due to my ignorance on this very niche market) was the brass traction items from The Car Works, many of which went for over $1000.
And I think that Greg made a great decision promoting the auction here. Sure the extra interest may have cost me a chance to make a few bucks flipping items like on the November auction, but he did the right thing for him and his auction house, and you can't fault him for that. I have to admit, when I saw his post here on OGR I cringed (because I was afraid the prices would be higher than in November). And by the way, the 19% buyers fee is only that high if you decide to pay online. If you spend a dollar at the bank and buy a money order (free at some banks) and spend less than a dollar on postage, he only charges 16%. That 3% difference can be a big deal on a large purchase.
If you ask me, the real vultures are the train show sellers and some brick and mortar retailers who insist on trying to get full retail for items that are readily available all over the internet for much cheaper. A very well known store here in So Cal has a plethora of brass items from a variety of importers. One that caught my eye was a Sunset Models Southern Pacific Atlantic steam engine. I own two of these little beauties, and neither of them cost me over $400. I asked the store owner the price, and he said (with a straight face) $750. When I gasped at the price, he assured me it was a really good price; I'm never going back. Had a similar experience at one of the large train shows at the fairgrounds. Gentleman claimed to know both Mort Mann and Scott Mann as he went on to explain why this Sunset Models consolidation was worth $800, even though I never see them go for more than $500 on eBay.
The other set of vultures are those will shills bidding on their items on eBay. But that is another story for another day.
The last thing I wanted to mention about fair priced versus overpriced, is that it depends a lot on the population of bidders interested in a certain item. I mean I know that kind of goes without saying, but here is an example. I watch several categories of items on eBay on a daily basis. One area of interest for me is the older Atlas reefers. Usually I pay no attention unless I can get the item to my door for under $50 (maybe $60 if it is very desirable). But if a certain road name came in 4 road numbers, and I have 3 of the 4 road numbers, and that one road number I'm missing comes up, then I'm usually willing to go full retail if needed on that item to complete that set. Someone looking at that from the outside might wonder why I paid $70 for a car that goes on eBay all the time for more like $40.
That's been my experience. Sorry that it was so sour for so many on this forum.
@lionel1946 posted:The other set of vultures are those will shills bidding on their items on eBay. But that is another story for another day.
snip...
One area of interest for me is the older Atlas reefers. Usually I pay no attention unless I can get the item to my door for under $50 (maybe $60 if it is very desirable). But if a certain road name came in 4 road numbers, and I have 3 of the 4 road numbers, and that one road number I'm missing comes up, then I'm usually willing to go full retail if needed on that item to complete that set. Someone looking at that from the outside might wonder why I paid $70 for a car that goes on eBay all the time for more like $40.
What makes you think those “vultures” on eBay are any different than you, trying to complete a set of something they like to collect?
Auctions are won by bidding. Highest bid wins. Rules are usually very clear.
To me, vultures are those guys who show up early at train shows, snap up all the bargains, move them across the aisle, and double the prices.
I see nothing wrong with buying lots of stuff at auction, splitting it up, and re- auctioning for fun & profit. That is adding value.
The way I see it is everyone gets a fair shake at buying the stuff. If you do not win it on the auction, you can try to get it online and if the prices there are too high then wait a year or two. Many is the time I paid too much for something "rare" that I just had to buy for fear I would never see it again and voila, a month or two later I saw the same exact product at a show, online or at an auction for half the price of what I paid. I know in this era of instant gratification we have to have it now but sometimes if we just put on the brakes and wait a bit, the good deal is just around the corner. This forum has been a great way for me to buy and sell stuff at a fair price with both seller and buyer usually walking away with a smile.
To lionel1946,
Stores, particularly in CA have high overhead. The brass SP Atlantic you speak of is fine engine and $700 is not unreasonable. Have you seen the price of the SP 0-6-0 lately from Sunset or Glacier Park? Yes, you may have got lucky buying those locos at $400 and actually made in a nonCommunist country. We all get good deals here and there but that should not be the benchmark.
My OPINION is why would anyone would pay more than $350 for a pair of F-7s, a lot more plastic than metal and made in Country with numerous human rights violations.
Whereas brass is truly a custom made product, not some mass produced hunk of plastic. Moreover, brass is often made in countries that are our allies.
”Price is what you pay, value is what you get.”
@rplst8 posted:What makes you think those “vultures” on eBay are any different than you, trying to complete a set of something they like to collect?
I don't think you understand the word shill, which makes this a pretty lame attempt at an attack. But to help you out, a seller on eBay employs a shill (or shills) to bid up the price on the items which they are selling. Sometimes this backfires and they end up purchasing their own item (through their shill). But often the extra fake action creates a bidding war that might not have occurred without the shills.
@Cadillac Mike posted:Many is the time I paid too much for something "rare" that I just had to buy for fear I would never see it again and voila, a month or two later I saw the same exact product at a show, online or at an auction for half the price of what I paid. I know in this era of instant gratification we have to have it now but sometimes if we just put on the brakes and wait a bit, the good deal is just around the corner.
I've had the exact same experience. Searched for years for a certain item, finally found it at a shop in Europe (I think Switzerland), and between the exchange rate and shipping I ended up paying about double retail for the item. Wouldn't you know, even though I hadn't see this item for years, within a month it shows up on eBay for below retail. Like AGHR Matt likes to say, eBay is like a bus stop; if you miss one bus, another one will come by eventually. LOL
@bob2 posted:I see nothing wrong with buying lots of stuff at auction, splitting it up, and re- auctioning for fun & profit. That is adding value.
Another example of this... I ran across a gentleman selling 13 Atlas zephyr cars for $1700, which I thought was a very fair price (especially since we were able to meet and avoid tax and shipping), about $131 per car. But I was only in need of 4 of the cars (the others I already had), so I bought the entire lot. Turned around and sold the 9 I didn't need for $1063 (after fees), leaving me with a cost of $637 for the 4 cars I really wanted; $159 each, so just a little under retail.
@lionel1946 posted:I don't think you understand the word shill, which makes this a pretty lame attempt at an attack. But to help you out, a seller on eBay employs a shill (or shills) to bid up the price on the items which they are selling. Sometimes this backfires and they end up purchasing their own item (through their shill). But often the extra fake action creates a bidding war that might not have occurred without the shills.
And you know they are “shills” how exactly?
@rplst8 posted:And you know they are “shills” how exactly?
That's easy. The item gets relisted shortly after due to "nonpaying buyer" or some other similar explanation. I have had this happen several times. First time was about 15 years ago on some RC equipment before there was bid sniping software, it was so obvious what happened that I reported it to eBay and the seller ended up banned. Of course that was in the days eBay was more interested in taking care of problematic buyers and sellers and you could still downvote buyers when they acted improperly.
Another issue I have had happen is I have won an item for obviously much less than the seller wanted, I pay immediately, and they stall the shipment or come up with some excuse not to ship.
Here's a dead giveaway for shills. Click on the item's bid history. Then click on the individual's bidder ID. There will you see "Bid activity (%) with this seller" and also "Bid retractions". If the bidding activity with this seller is around 100% and there are lots of retractions, then you know it's a shill account (he's bidding on his own auctions and retracting the bids to avoid winning).
Good to know, thanks.
However, I’ve bought a large portion of my collection on eBay and never noticed these shills. In fact, on many auctions I’m the only bidder, or submit a best offer and win that way.
Maybe this was more of a problem in the early days of eBay. It’s easy to avoid, just don’t bid if the price is too high.
What’s hard to avoid are people only interested in making a buck by reselling things from the private auctions on eBay. Breaking up a lot of items and reselling some of it is one thing, but just turning it around deprives someone who really wants it from being able to collect it.
@mwb posted:A lot of people who complain about "shills" are people that simply did not bid high enough, or got into a bidding war, and lost.
I will grant you that. But it looks very suspicious when an item sells for $300, then a week or so later the exact same item sells for $150. Then, as Mike points out, you look at who was bidding on the item at $300 (hiding the user names of the bidders is another giveaway) and notice NONE of them are bidding on the exact same item at $150. You can understand the winner at $300 might be out of the bidder pool, but the others just disappeared? "Not Bloody Likely"
@lionel1946 posted:I will grant you that. But it looks very suspicious when an item sells for $300, then a week or so later the exact same item sells for $150. Then, as Mike points out, you look at who was bidding on the item at $300 (hiding the user names of the bidders is another giveaway) and notice NONE of them are bidding on the exact same item at $150. You can understand the winner at $300 might be out of the bidder pool, but the others just disappeared? "Not Bloody Likely"
Agreed, the sellers are smart enough to work around eBay detection. Same items and same pics but relisted with different seller but same location etc. Lot's of context clues on these things. I think eBay will suspend accounts with too many retractions. Personally I don't care, nothing I want is a need especially with toy trains. I bid what I am willing to pay and don't get pulled into bidding wars.
I don't fault those as well who by and sell to fund their hobby, it's a good method. I sometimes bid on items if I think I can do that. But I put in huge buffers on what I will pay when I do that and honestly due to eBay becoming so unfriendly to nonbusiness sellers I really don't use them anymore.
@rplst8 posted:Good to know, thanks.
However, I’ve bought a large portion of my collection on eBay and never noticed these shills.
Totally agree. It’s rampant in another hobby of mine. I think it’s rare in O gauge trains. If everyone will just snipe the auction with your best bid, that will eliminate shills anyway.
I think the shill bidding greatly increased when Ebay decided the seller was going to pay a premium on any items with a "reserve". Recently, I listed a vintage guitar with a reserve price not realizing I would have to pay for the ad whether it sold or not. As luck would have it, a guy I work with ended up buying it so I ended the Ebay auction after one day. Even though I did not have a single bid, I ended up paying over $200 for the listing because I put a reserve on it. I have not used that site since and plan on selling what remains of my postwar Lionel collection elsewhere.
This has been an interesting thread. I don't really do much research on the things I buy. I have a price for what I want to pay for something and that's what I bid. if I get outbid then that's the way it goes. A few months back there was a big auction at Stouts and several things went in large groups. The buyer split them up and sold them on the 'bay and I was able to pick up a few of the items I was interested in without having to buy a huge lot and sell off what I didn't want.
One thing I have noticed is some sellers inflating their shipping charges. I sell enough items to have a good idea what it costs for shipping both large and small items. But I've started to see $60 listed to ship a single passenger car. I don't bid on items when the shipping charges are that padded.
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