ORP, OR LLC
RULES, ESHOLDS: es Affect Online Sellers In most cases, people may sell items online at a loss. Consider this scenario: You purchased exercise equipment for $1,000, and after a year of non-use, decide to sell it for $600. Under the new regulations, you may receive a 1099-K for this sale, even though it’s not a taxable event, as you incurred a $400 loss. Here’s where it becomes complicated. While the IRS acknowledges that the example above isn’t a taxable event, you are now tasked with proving it. You must demonstrate that you bought it for $1,000 and sold it for $600, and the burden of proof rests on you.
WIN OF THE MONTH Everything Is Squared Away
While these new rules aim to enhance tax compliance in the digital marketplace, they may bring unintended complexities for both sellers and tax authorities.
Staying informed and maintaining accurate records of your online transactions is crucial to navigate these changes effectively and ensure you’re not paying more taxes than you owe!
INGREDIENTS
CASE SNAPSHOT Client: Worried Business Owner Type of IRS Issue: Business Income Tax Tax Year in Question: 2017 IRS Claimed Liability: $20,599.55 Savings: $20,599.55
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2 tsp salt
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2 lbs ground beef
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2 tsp beef bouillon granules
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6 cups water
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1 tsp black pepper
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1 28-oz can tomato sauce
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2 cups cooked long- grain rice Chopped fresh parsley (optional)
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1 28-oz can diced tomatoes, undrained 2 cups chopped green peppers
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1/4 cup packed brown sugar
DIRECTIONS
Our client owns a company in Puerto Rico that relied on Square Inc. to complete some of the business transactions. Our client reported her business income correctly, but Square Inc. sent a 1099-K personally to her instead of the business and refused to correct the mistake. To help our worried client, we jumped into action. We were able to adjust the personal return and provide company bank statements, a company tax return, and Square Inc. reports to prove that all of the income had been correctly reported. The IRS agreed that she should not be liable for personal income taxes on income that was already reported on her business taxes. We saved our client the entirety of the assessed liability in the amount of $20,599.55 and got her IRS issues “squared away”!
1. In a Dutch oven over medium heat, cook beef until no longer pink, breaking it into crumbles; drain. Add beef back to the pot and stir in all ingredients except the cooked rice. Bring to a boil.
2. Reduce heat. Simmer uncovered until peppers are tender, about 30 minutes.
3. Add cooked rice and simmer, uncovered, for about 10 minutes. If desired, sprinkle with chopped fresh parsley.
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