An Eye Opening Experience Concerning The Secondary Instrument Market
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I had an interesting eye opening experience today purchasing a mouthpiece advertised on the “Trumpet Herald Marketplace” that would apply to purchases on our site, eBay, and others where private individuals sell used items, such as instruments, accessories, etc.
The price was fair and no negotiation was necessary in my purchase, other than the method of payment. The seller of the item requested “PayPal Family and Friends”. As you know, under these circumstances there is no protection of the buyer. I counter-offered to add a 3% surcharge to cover the PayPal fees. This however was not the issue. The seller was concerned that PayPal would have to report this sale, of a used mouthpiece, in combination with his other sales, to the IRS as income. My initial thought was that this was a “tall tale” (c&b story) created to deceive me. My gut feeling was to walk away from this transaction, but first I researched it and found out that his concern was accurate. After researching it I found that if “you have a side hustle where you buy items and resell them for a profit via PayPal or another digital payment app, then earnings over $5,000 will be considered taxable and reported to the IRS in 2024.”In the near future this will drop to sales over $600 for the year.
Those of us selling used equipment at a loss will have to show documentation of the loss in order to avoid income tax on these sales. I myself am going to list a half dozen or more high end used instruments in the near future that I no longer play. I foresee a major headache when this happens even though there will be no profit involved. This issue not only complicates the seller’s transaction but adversely affects the buyer’s side of the transaction. For those interested, the following is a link to a complete explanation of the current status of this problem:
https://www.cnet.com/personal-finance/taxes/1099-k-irs-delay-what-paypal-venmo-and-cash-app-users-need-to-know-this-tax-season/
