Bitcoin is looking better and better.
"Fair Market Value" is a term used to estimate the current value of an item, typically in the setting of a charitable donation? (ie. how much an item may be worth at the time it is donated to a legitimate charity), which is often tax deductible. I doubt IRS would accept a seller's estimate of? Fair Market Value for hobbyist sale transactions as an accurate cost basis since the item may have been purchased many years in the past or inherited gratis,? and determining past valuations is extremely difficult without records (ie. original purchase invoice/receipt). Here is an informative article on the subject of hobbyist tax obligations in light of the new IRS regs (reducing the annual sales level from $20K to 600K/annum). Interestingly, it discusses how the IRS may take action against you if you try to 'skirt' around the new reg by using PayPal "Friends/Family" instead of " PayPal merchandise" unless you can clearly establish the transaction was really made between friends/family members and not strangers. And it is not only PayPal - other 3rd party payers, like Venmo will be required to also issue 1099-K's for sale transactions that exceed $600/annum. So seems like the safest thing is to avoid all of these 3rd party payers, and handle sale of vintage gear by accepting payment in form of? check/MO/Zelle, at least for now:
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Bob K3aC
In a message dated 9/22/2022 11:50:18 AM Eastern Standard Time,
mark@... writes:
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On Thu, Sep 22, 2022 at 10:39 AM, Robert Needleman wrote:
you have no documentation? (or rarely so) of your cost basis if you purchased it many years ago, etc
In general, the IRS will allow you to use ?"fair market value" as your cost basis when you no longer have documentation. ?
Thus, with just a small amount of paperwork, most "hobby sellers" should be able to justify / document that they made no profits from their > $600 sales.
