can i claim things i have sold on eBay on my taxes as an income?

Question

does this qualify as an income, i am asking because i want to know if i can get a tax refund or earned income because i have 2 kids but i didnt make any money this year just a little selling on ebay.

Answer 1

You not only can but are required to if you had a profit over what you paid for the items, and it's over $399. Your net income from this will be taxable, including 15.3% self employment tax, but it will be eligible earned income for getting EIC.

Answer 2

What were you selling?

The sale of personal items at a gain goes on schedule D and is not counted as earned income.

The hobby of buying a few things and selling them on eBay is reported as income on line 21 as other income and the expenses go on schedule A. A hobby does not count as earned income.

The BUSINESS of buying items for resale and selling them on eBay goes on schedule C and net earnings are counted as income. The IRS routinely questions any return where the Schedule C income appears to be there simply to get EIC. So you must be able to show receipt of income, receipts for expenses claimed and be able to show how this is a business not a hobby.

From IRS publication 535 (edited):

Not-for-Profit Activities
If you do not carry on your business or investment activity to make a profit, you cannot use a loss from the activity to offset other income. Activities you do as a hobby, or mainly for sport or recreation, are often not entered into for profit.

In determining whether you are carrying on an activity for profit, several factors are taken into account. No one factor alone is decisive. Among the factors to consider are whether:

You carry on the activity in a businesslike manner,

The time and effort you put into the activity indicate you intend to make it profitable,

You depend on the income for your livelihood,

You (or your advisors) have the knowledge needed to carry on the activity as a successful business,

You were successful in making a profit in similar activities in the past."

Answer 3

WELL obviously you can't get a credit for more than you made. How can you make $100, get a $1000 credit, and get a check for $900.