It’s never been clear to me whether an individual can deduct costs like cellaring costs for wine that is sold. A business could certainly deduct costs.
-Al
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In way too many transactions, it’s completely insane for the IRS to expect people to identify a complete record of the linked transactions (past purchase, split, etc.) to justify a wash/loss or the correct profit. So many transactions will involve shared purchases, for which the burden of documentation is unreasonable. To account for future sales over the threshold, one would also have to maintain a record of every non-perishable purchase ever, since any could days or decades later be worth more than $600.
Most people can’t afford to consult with an accountant outside of an annual tax filing, and the law certainly targets people of lower means who aren’t used to maintaining tight records for tax purposes. There is no education or cultural shift that will change behavior outside of a number of people getting walloped by audits.
Enough hands getting slapped will only result in driving commerce to crypto and back to cash. The reality is it’s not a rule that is in place to create good behavior. It’s a rule designed to go after people when you want to put a target on them since it will only be audited in an infinitesimally small percentage of cases. The spirit of collecting true and fair taxes is respectable, but this design is just terrible.
If you have to report the “profit” as income, seems to me you could subtract out your costs of receiving the wine (shipping to you), storage, and shipping out, no? That’s how you determine cost basis.
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Depends if we are discussing a capital asset sale versus selling wine as a business/hobby. Even then there are differences. Take the example of a sale of a house in which the selling expenses of the house do reflect the cost basis. One could take the argument that if I sell a bottle of DRC, then yes the shipping, storage etc would increase the cost basis.
Different rules apply for Schedule C -business versus the sale of a capital asset.
The idea of receiving a 1099 for every transaction is insanity. My wife and I use it. Friend will use it to split meals. Again from what I understand, you only receive a 1099 if the transaction is listed as commercial.
I think they may now. A friend told me about his partner, who has a tutoring business and is paid by Venmo. He received payments regularly enough that Venmo said he had to set up a business account.
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I assume it must since Zelle was set up by a bunch of banks.
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If I were the IRS, I would be looking at people (e.g., tradesmen or eBay dealers or the like) who received scores or hundreds of payments a year. I wouldn’t be wasting resources on someone who had a couple of $600 transactions.
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Even worse, it’s a total of $600 over all transfers.
Used to be $20k and at least 200 transfers, similar to your suggestion.
-Al
I am paid via Zelle by the accounting firm that I work for. Will see if I receive one a year from now.
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Zelle currently claims the law does not apply to them because they are an interbank messaging service and not a payment company (they don’t themselves hold funds). Don’t know whether the IRS will agree.
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That’s interesting, Al. Thanks. It’s hard to imagine that the IRS wrote regs that didn’t cover Zelle, unless they thought they could get the same info some other way, e.g., through the banks at either end.
Or the lobbying was super effective such that everyone will be forced to use Zelle instead of these not-as-bank-friendly disrupters.
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Also a possibility. 
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I suspect the original law, part of the American Rescue Plan, was intended to cover Zelle, but didn’t understand the differences between it and Paypal, Venmo, etc. From new stories, some small businesses have moved to Zelle in response to the new requirement. To the degree that it’s a loophole, it may not stay that way for long.
-Al
Unless there was something about them that just rubbed you the wrong way for whatever reason.
I thought it was $600 per transaction. No?
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No, aggregate over the year. Which is very little for a regular user.
-Al
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That is the beauty of not having competition. You don’t really have to worry about your customers headaches.