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I agree with folks above who liken it to a garage sale. If it's your stuff that you've had for years, it's not taxable income. The IRS may want to know, but they're not going to hunt you down. And I think the current tax on capital gains kicks in only after $250,000.00.
If you're buying books to resell, technically, that's a business, and you need to report it. But your two grand a year is small potatoes. The IRS isn't looking for people like you to audit.
But...I know someone who started on eBay years ago. It was essentially a second job. This person otherwise made only $10 an hour, so he loved the eBay money. He bought things and resold them at a nice profit. Finally, his profits hit over $20K in a year. That threshold triggered PayPal to notify the IRS that he'd received that amount in eBay payments. He was audited and had to pay taxes on it. Of course, after years of thinking it was tax-free money, he'd never saved a single receipt for write-offs (postage, cost of goods he bought, packing supplies, and everything else you can deduct for a home business).
#1 The IRS isn't going after you until you appear to be running an actual resale business.
#2 Save your receipts. The guy in question complained bitterly about the IRS taking *his* money. Fact, he owed, just like everyone else. More crucial fact, if he'd had any sense he would have looked into this beforehand. And if he had, he would have realized that he could have taken a ton of deductions for his home-based business and owed no tax, all while being honest and square with the IRS.
Ebay & Amazon will report you to the IRS if your sales are over a certain amount. I used to know the number but all I recall, is I didn't fit within that realm since I would only make less than $500 a month.
I made about $325+ but my papyal took in about $475 each month from the sale. And as long as I didn't provide them a Social Security number, which allows me to go beyond taking out $500 per month, I knew I was safe. I haven;t sold in about 3 months but prior, was a top rated seller on a regular basis. I've sold on ebay about 3 years consistently
Sorry this is so shaky but it's better than nothing.
Ebay & Amazon will report you to the IRS if your sales are over a certain amount. I used to know the number but all I recall, is I didn't fit within that realm since I would only make less than $500 a month.
I made about $325+ but my papyal took in about $475 each month from the sale. And as long as I didn't provide them a Social Security number, which allows me to go beyond taking out $500 per month, I knew I was safe. I haven;t sold in about 3 months but prior, was a top rated seller on a regular basis. I've sold on ebay about 3 years consistently
Sorry this is so shaky but it's better than nothing.
Paypal reports sellers who make over 20k a year.
I sell on Ebay once in a while. Recently they required my social security even though I've sold less than 3k this year (of my personal items). We were moving and I was trying to get rid of as much items as possible.
I believe I'm not required to pay taxes on sold items from my own garage, since I didn't make a profit.
In my case I buy academic books for a few dollars at Library book sales and then resell them on Amazon for $15 to $100 a piece. I make at least a 80% profit on each. I understand there are many people who do this and I meet them at the book sale. I wonder how many of us are paying taxes. I am not and made about $2000 in profit last year. This is part of the new economy that is not being taxed.
I know we should be paying taxes but wonder how many people are....
I was in the same business for a few years (started in 2005 and stopped in 2007), and I reported all my profits. If you are making a profit, you should pay taxes. I reported this as business, so I got to write off some of my expenses (cellphone bill, Internet). I also bought a laptop and ran through depreciation. I don't remember all the details, but yes, I reported this on my tax return.
I know you make a good money on used text books, and running that business doesn't take all that much time. It's most likely a supplemental income, and should be reported as income. Is there any doubt about it?
For tax purposes, you cannot depreciate personal property. You measure your gain or loss by taking the sales price and subtracting out your "basis" (what you paid for it). If there is a gain, you must report it and pay income tax on that gain. If there is a loss, unfortunately, you cannot take personal losses on your return.
Just to clarify, though, you can net your gains against your losses. So if you sell a vintage BMX bike at a $200 gain over what you originally paid for it, you don't have to report that gain if you sell the iPod at a $200 loss in the same year.
I had a question though. What is the tax situation for a person in my position? I purchased a receiver and speakers that newegg was running a promo for at the price of $550 but i'm planning to sell the speakers and keep the receiver. The current running value of the speakers is $425 after shipping / amazon - ebay fees it would bring it to a net total of $360. The speakers if sold are worth around $450 if sold.
Currently I do not believe eBay or Amazon report anything to the IRS. But the IRS is becoming more and more interested in what goes on in places like eBay. Not so much because some people are making $1,000 a year and not reporting it (You're allowed to make 400 without payment self-employment tax etc on it), but because some people are making a lot of money and not reporting it.
Um...ever notice how you pretty much have to use PayPal to buy or sell stuff on eBay?
PayPal kicks out a Form 1099 to every seller who receives $600 through PayPal in a year with a copy to the IRS.
What if let's say someone buys a ferrari at 200k and spends 50k in modifications for a total of 250k. then 2 years later, sells that very unique car for 250k. Does he have to pay taxes on the 50k 'gain' on the original car purchase price? or is it a wash, since he spent 250k in obtaining that car that sold for 250k?
Um...ever notice how you pretty much have to use PayPal to buy or sell stuff on eBay?
PayPal kicks out a Form 1099 to every seller who receives $600 through PayPal in a year with a copy to the IRS.
Do you have the source for that?
This is from PayPal's tax info site:
PayPal will track the payment volume of your account(s) to check whether your payment volume exceeds both of these levels in a calendar year:
$20,000 USD in gross payment volume from sales of goods or services in a single year
200 payments for goods or services in the same year
You may be asked to add your tax ID number, such as a Social Security Number (SSN) or Employer Identification Number (EIN), to your existing account(s), if you don’t already have one on file.
If you cross the IRS thresholds in 2012, PayPal will send Form 1099-K to you and the IRS for the 2012 tax year in early 2013.
What if let's say someone buys a ferrari at 200k and spends 50k in modifications for a total of 250k. then 2 years later, sells that very unique car for 250k. Does he have to pay taxes on the 50k 'gain' on the original car purchase price? or is it a wash, since he spent 250k in obtaining that car that sold for 250k?
There is no gain to pay taxes on as your cost basis should increase with the 50k investment, much like a house
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