I sell items on ebay for my cousin and friend... How do i report the profit I made from the transaction?

Question

Do I show a layout.. like... He gave this item... I sold it, here is the price after all the fee's and now I get my 15% cut... so I show that all on paper? and report the extra income at the end of the year and save my own worksheet paper?

Whats a schedule?

Answer 1

You should keep records on each item of what you bought it for or gave to the owner after the sale, what you sold it for, and any expenses of selling or shipping. You'll keep those records for several years, but just report the totals on your schedule C. A schedule is a type of tax form that supplements another form. You'll find schedule C at irs.gov under 1040 schedule C since it will go along with your 1040 form.

Answer 2

1. Your income will be self-employment income. On your tax return Form 1040, it is to be reported on Schedule C of Form 1040.

2. You must keep track of your income and expenses to figure out net profit. This net profit is also subject to Self Employment tax @15.3%. For this you will also file schedule SE (Form 1040) with your Form 1040.

3. Get a business license from your city/county. The fee ranges from $10 to $100 depending upon your city/county.

4. Open a bank account exclusively for your business activity. This way you can easily keep your personal and business expenses separate. You will not have much problem with IRS if they question your expenses.

Answer 3

i don't think you need a layout because i think only investment income requires a schedule.

your profit would count towards your ordinary income. but you should have a record of your profit in case you get audited.

Answer 4

Don't you mean how do you not report the profit. wink wink.