Client buys scrap and collectible from private parties not businesses. Sometimes she pays over $5000 and even $10000. 1099-K is not necessary. Does anyone understand the Direct Payers portion of the 1099 MISC?
What constitutes the requirements to file? My client is purchasing from private parties the inventory. So client needs to report to the IRS the purchases over $5000 and get an SSA number or W-9 completed from the seller?
@DLMCPA The purchase of goods and other tangible assets is generally not covered by Form 1099-MISC. If the goods and supplies are part of the services provided by the independent contractors & LLCs, they would be included in the 1099-MISC form. If they are not part of the service provided, you do not need to report payments for equipment, supplies, or other tangible goods, including inventory.
There is a section in TurboTax to record Inventory on Hand at the beginning of the year, Total Inventory Purchases during the year, and Ending Inventory for a Business.
Here's more detailed info on Inventory Tracking for a Business.
1099's are not required to be issued to vendors from whom you purchase inventory items only.
Click the link for instructions on When to Issue a 1099-Misc.