Guitar Sales, Reverb, and your TAXES... 2024 Update!

[@markflores2475]

Awesome and simple explanation Mr. Esquire. Maybe I will start selling on Reverb again now that I know this updated information.

[@blueslawyer]

Nice Mark! Thanks for sticking with us since the first version of this video ;)

[@olearywu]

Completely agree. I have sold under $600 on Reverb & eBay for two years now. All it really did was stop me from buying things I wasn't certain about and, likewise, dried up the used market. Real genius move. And then at the end of year announcing its delay or pause, two years in a row now, isn't of any assistance whatsoever to me. Damage already done. The one thing I would still like to know, how easy is the filing of this? Most importantly, how easy is it to claim a loss, as opposed to a profit? Like most maybe, I never profited from my selling on Reverb or eBay. Best!!!

[@blueslawyer]

@@olearywu check with your accountant, but you should be able to generate a 1099k from Reverb and if you have receipts from your purchases, you can show a gain or loss. Documentation is key.

[@olearywu]

@@blueslawyerUnfortunately, that's what I was afraid of: documentation. Maybe I am being ditzy here, but that sounds like a horrible hassle. But thank you for your response/clarification. This was a great video idea, imho. I'm guessing this change in the law altered the market in lots of not so great ways and, I would venture, has reduced tax revenue, not upped it. I'm buying a lot less these days (and therefore, I am paying less sales tax) precisely because I can't unload it like I used to. I can't be alone here. The good news is I can work as I did within a $5,000 limit, especially since one has both Reverb & eBay to offload on. Going forward, it would still make me a bit skittish, though, of stretching for high-end guitars, but, admittedly, the documentation on those types of sales would be pretty easy (i.e., not a lot of receipts). But even then, such a high-end loss/no-profit would be easy enough to document but you'd be over the limit ($5,000) and perhaps have a bunch of smaller sales (Pigtronix pedals, pickups, pickguards, Planetwave cables, and so on) that'd you end up paying tax on. That would chafe my hide, frankly. The $20,000 or whatever older limit was probably the sweet spot here.

[@blueslawyer]

@@olearywu for the 2023 season (this filing) you get the $20,000 and 200 transactions and, as you said, $5,000 has a little bit of flexibility. I wonder if this will encourage "single source" shopping and selling, where you stick with one market (Reverb, eBay, or Sweetwater GX) to save on paperwork.

[@danthegeetarman]

Love the videos as always!

[@blueslawyer]

Thank you! You folks make it all worthwhile

[@danthegeetarman]

@@blueslawyer 👍💪🙏

[@vechap]

What if all your sales are losses? I'm not running a business. I would only be selling my own personal guitars, and rarely, if ever make a profit, usually a loss. I might meet the $5K but how would you note that all sales were losses, for example on a 1099K... Or just file them in the Capital Gains and Losses?

[@blueslawyer]

@@vechap check with your accountant, but you'll have to have original purchase receipts that show what you paid.

[@fader_dragon]

That $600 threshold was absurd. Not in love with the $5K threshold but I get why it exists. Kinda wish I'd sold more stuff online last year. 🙂

[@blueslawyer]

You should focus on buying guitars this year

[@fader_dragon]

Barely two months into the year and we already have the best KZbin comment response of 2024. 👑

[@blueslawyer]

@@fader_dragon you know how to get a shout out on the viewers comments video! ;)

[@mookyshoots1]

As long as you're not showing an overall profit at the end of the year, there's nothing to worry about. The current market pretty much ensures you're not coming out ahead unless you're a dealer. Any profits I made were eaten up by losses on other gear, so I ended the year with a loss.

[@blueslawyer]

If Reverb is where you bought and sold the guitars over the course of the year, that would be simple --but if you have historic losses, it gets complicated

[@jdm925]

So, if you have to claim income for instruments you sell, are you going to be able to write off the ones you buy?

[@blueslawyer]

Ask your tax preparer, but if you have the receipts from the original purchase, then you'd be able to show the profit