Dear Paul:
DISCLAIMER: I am not a tax professional and this is not intended as tax advice for anyone in particular. Consult with a pro if you have questions.
I don't think you would get a 1099 from the IRS. The 1099 form is basically a report of money paid from the person who paid you, with a copy to the IRS. If that money does not subsequently show up on your tax return for the year, the IRS may come calling. Usual 1099s are from financial institutions for interest, dividends and cap gains, and from persons who hired you as an independent contractor. The dollar threshold used to be a round $600 for contractors and $10 for financial institutions for interest, dividends and such. Failing to send a 1099 if the IRS says you should will also get you in trouble with the IRS.
In the auction context, it would have to be eBay issuing the 1099s, if you sold above X dollars in a year. Then on your taxes you would deduct any transactional costs and the original cost of the item(s) to see if you made a profit, and owed tax. I don't know if the IRS has tried to require ebay to send 1099 forms to big sellers. Profit or loss from hobbies that are not a major source of income are usually not required to be on your tax return, on the assumption that most people lose money on hobbies. But if you sell several Herses of California Masi's in a year, it wouldn't surprise me if the IRS decided to ask what your profit was on the sale.
Tom Adams
Manhattan, KS USA
From: W PAUL PATZKOWSKY <oldtrikerider@q.com> Subject: Re: [CR] Ebay - Another issue To: classicrendezvous@bikelist.org Date: Tuesday, May 4, 2010, 3:39 PM
I've already sent a personal reply to Greg regarding the original question, basically covering some of the same points that others have addressed. I'm curious about something else, however. Has anyone ever recieved a 1099 or similar document from the IRS for Ebay sales?
Paul Patzkowsky
Longmont, Colorado