.... must be "explained" to the IRS...or something like that.
mh9162013 : I have enjoyed reading your posts. Your input to this topic is very insightful. Thanx !
To answer your musings : The way anyone shows that any such "income" is more-than-offset by expenses (thus not "profit"), is that they would need to list their expenses as write-offs.
No different than a business does for their receivables vs expenses. For example, in my business, I too receive handfuls of 1099s each year from customers. And I dutifully report all our income. Yet, like any business, I too write-off expenses. Eg.: Fuel, labor, materials, etc.....
That's fine & dandy for individuals who already have a business tax system set up. That's routine for any business to itemize like that.
But for someone who is just selling a used Nox for $750, or someone who sells $750 in gold to a refiner, then it's like they have set up their personal tax returns as a business. In order to qualify for write-offs.
And I realize we hobbyists bristle at this, since, of course, this truly IS just a hobby. We're not making $$ off of it (unless one of hits a bonanza rare coin or cache).
But to Uncle Sam's credit (ie.: from their perspective) it's the Camel's nose-in-the-tent : The next guy will also jump on that band-wagon and say that all the $$ they're getting is "merely a hobby". When, in fact, they just don't want to pay taxes on their income.
So you can hardly blame Uncle Sam for wanting to close these loopholes. And you can hardly blame Seller/retailers , who dutifully pay taxes on their income, from crying foul when other sellers are skirting taxes. The creating an unfair un-level playing field.
20+ yrs ago, before the advent of digital buying and selling, you had to go to brick & mortar stores to buy or sell an item. And that has always had taxes built into the products (as evidenced by the taxes listed on your store receipt). But in this digital age that we live in, things are trying to keep up with the times.
And you're right : At no point was taxes ever not due on things we find. Eg.: when we go to smelt gold (from our rings), or the profits made on flipping garage sale items, etc..... It was always/only/ever the "honor system" before. And if someone objects and says : "But my costs are higher than my earnings" or "this is only a not-profitable-hobby", then : They are more than welcome to create the long-form taxes each year, to treat it like a business, so they can avail themselves of write-offs. Eh ?