[Jewelry making - Article 00038] - Re: [Orchid] Consignment and taxes

[Kimberly Starbard]

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Hi everyone:

>     I have never encountered this situation in any of the galleries
>     that I've consigned to, and I've not required the 60 plus artists
>     who consign in my gallery. They do NOT WORK for me, I pay state
>     sales tax on items sold. I would question the need for this sort of
>     documentation. Please keep us posted. 

    It was bothering me very much that i could not give the proper
    answer to the 1099 questions, so I went over the directions for the
    form again and called the IRS. Consignment sales are not reported on
    a 1099. They are exempt. Payments for services only are reported on a
    1099-MISC. An example would be: those of you who teach and consign
    your work. You would receive a 1099 for amounts paid to you for
    teaching. You would record amounts paid to you for consignment sales
    on the gross receipts line on your Schedule C (or other appropriate
    schedule should you be filing as, say, a partnership). 

    One funny thing though....I asked the agent "how do I account for
    sales made on consignment?" His reply..."I don't know, you'll have to
    check with your CPA" So, I go back to the old standby. Please don't
    rely on anyone (not even an IRS agent) to give you proper tax advice.
    Ask a qualified CPA. 

I'm sorry if I confused anyone.
Kim Starbard
Cove Beads


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