eBay IRS question??

Question

I have a question about claiming income from eBay selling. If I lets say, buy a book at a garage sale for $1.00. Then, I sell it on eBay for $10.00. If the book's original retail value was $20.00, do I still have to claim my income from that since I am still selling it for under it's original value?

Answer 1

Technically,
You would have a $9 gain on that sale
(you purchased an item for $1, and sold it for $10, a $9 gain) and that would be reportable income to the IRS.

Gain/Loss is based on YOUR ACTUALY PURCHASE & SALE price.

Now, you can also factor expenses (like the mileage on your car to go to and from the garage sale)... at the standard mileage rate of 48.5 cents/ mile, you might just get up to the $10 sales price and owe no taxes in the end.

I hope that helps.

Answer 2

You would be claiming the $10 as the sale and $9 for your profit regardless of what the book's original value is. Also, check out www.score.org which is part of the SBA and have free counselors to speak with who are retired business owners!

Answer 3

You would owe taxes on the $9 gain, LESS any related expenses (assuming you itemize your deductions). THings such as your ebay fees, shipping (if you paid), telephone and packing costs, etc...

The original value is not important... its what you started with and what you had left over.

.

Answer 4

You are taxed on your profit, which is what you sold it for (minus expenses) minus what you paid for it. In your example, the $20 has nothing to do with you. Your gain, the taxable amount to you, is $9.

Answer 5

Income for tax purposes is YOUR net profit, so you owe the tax, unless your expenses are so high that you have no net profit.