IRS may call Ebay sales "taxable income"

[steveinaz]

http://story.news.yahoo.com/news?tmpl=story&cid=528&ncid=528&e=2&u=/ap/20050328/ap_on_go_ot/taxes_online_auctions

The IRS, what a lovely institution. :mad:

[jdhdiggs]

I don't know, if your going to tax employees and small business's, might as well do this. Some people are making 20-30K a year on E-bay. Sounds like a business to me.

[billbillw]

Seems to me that you would have to profit from the sales to be taxed.

The large majority of people are selling things that have greatly depreciated and are just getting a small percentage of the original cost back. There is no way that most sales on Ebay are taxable.

[disneyjoe7]

People are making $20 to 30k without claiming it yes this should be taxed. But it's a business also so you have expenses, so get them legal.

[jdhdiggs]

There are still a lot of vendors that buy low and sell high on items that make it them a real business.

What you are missing is the great counter to this. If you buy high, sell low, you lose money, of course you'd have to ammortize the loss, but still its a loss and should reduce your tax burden.

[jdhdiggs]

DJ7, you just confused the crap ought of me... Thought I double posted or something...

[disneyjoe7]

Great minds think a like. ;)

[billbillw]

Originally posted by jdhdiggs
What you are missing is the great counter to this. If you buy high, sell low, you lose money, of course you'd have to ammortize the loss, but still its a loss and should reduce your tax burden.

Hmmm. That's a great idea. I wonder, is there a minimum threshold to claim losses?

[nadams]

If that happens, I'm guessing eBay is going to lose a lot of business. That's a lot of extra work to keep track of all your profits and losses through eBay. I know I'd be out...

[DAGLJAM6]

Gotta get a grip you can't expect the gov't to give back money with the left hand and not find a way to get an equal amount back somewhere with the right. :D

[Shizelbs]

They (the govt) could lower taxes and their expenses.

[brettw22]

The one positive is that you could write off all the fees that Ebay bones ya out of.......

[steveinaz]

Well, I'm sure this is an effort to target "power sellers" not the kid who throws a couple CD's up there every now and then; and yes, losses could be reported to counter gains--of course you get into pubs about depreciation, etc, etc...

[ohskigod]

Originally posted by steveinaz
Well, I'm sure this is an effort to target "power sellers" not the kid who throws a couple CD's up there every now and then; and yes, losses could be reported to counter gains--of course you get into pubs about depreciation, etc, etc...



exactly. there are people basing entire businesses on Ebay sales. their easy to spot, especially with extrememly high volume sales, selling new retail items, as opposed to the used items from someone's basement. These sales were allways taxable, its not like a new law, the IRS is giving a heads up that they are going to start looking into this, and the ones raking serious income and not reporting it need to heed the warning.

[Mjr7531]

It's a bad idea imho, seriously, I mean, why not send agents out while they're at it and tax the boy who mows your yard? Or the girl that babysits your kids, or maybe they can get their fingers on the cash you got from the bench you sold to your neighbor.
It's an auction site, has the government taxed an auction before? (No really, I don't know) Oh well, rant off.

[PhantomOG]

Originally posted by Mjr7531
It's a bad idea imho, seriously, I mean, why not send agents out while they're at it and tax the boy who mows your yard? Or the girl that babysits your kids, or maybe they can get their fingers on the cash you got from the bench you sold to your neighbor.
It's an auction site, has the government taxed an auction before? (No really, I don't know) Oh well, rant off.

i'm all for keeping the government out of my life as much as possible, but i just don't see how you can compare kids babysitting or mowing lawns for money on the side with a legitimate business owner who sells everything on ebay. they are *vastly* different. this same person who is a "power seller" on ebay and makes enough money to take care of his whole family comfortably should not be able to say they don't have any taxable income. if so, they would be eligible for *thousands* of dollars in earned income credits from the IRS based on their low taxable income and dependents. that person taking *my* money from my taxable income is the "bad idea" and needs to be fixed.

[Mjr7531]

Phantom, you're right, I don't know what I was thinking, I used a really bad example. I'll clarify my thoughts, I think that ebay is used by enough few time sellers that it seems like a bad idea to tax it to me.

[unc2701]

Here in NC we're supposed to pay sales tax on things we buy online- including Ebay. When you do your state taxes you're supposed to add up everything you bought that year and didn't pay sales taxes on and give them 7.5%.

Usually, I put down that I spent $150 just to avoid triggering an audit, but it's still rediculous.

[PhantomOG]

I may be wrong, but I don't think the IRS wants to get involved in *every* single auction that goes on. it just wants people who make considerable amounts of money (taxable income) on Ebay to be truthful, report it, and pay taxes just like anyone else does from their paycheck.

[Burnzy]

Actually, I thought there is a question that asks you about any "other income" that you made this year somewhere in those IRS forms. So therefore you should already be reporting your eBay income anyway, although who does it?

If your are making a good bit of money on it then you should report it but there should be a minimum limit as to report. And if you do report it, they should allow all the eBay and PayPal fees as a tax write off for business expenses.

[Mjr7531]

Originally posted by PhantomOG
I may be wrong, but I don't think the IRS wants to get involved in *every* single auction that goes on. it just wants people who make considerable amounts of money (taxable income) on Ebay to be truthful, report it, and pay taxes just like anyone else does from their paycheck.

That makes sense, maybe I oughta think more before I talk.:o