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Old 01-04-2008, 01:48 PM
 
417 posts, read 1,360,190 times
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Default Sell things on Amazon or EBay? Do you think most people pay taxes on profits?

I read that thousands of people are making money selling things on Amazon and EBay (and other sites). Most sell less than $1000 a year but are suppose to report any profit they make selling goods on the Internet on their taxes. So, do you think most people report this income and does Amazon or EBay report this information to the IRS?
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Old 01-04-2008, 02:11 PM
 
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What I think of others is immaterial. I show it properly on my return and sleep at night.
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Old 01-04-2008, 02:19 PM
 
Location: Oz
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Are you asking in a roundabout way whether or not YOU should report it? If so, then my answer is YES!
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Old 01-04-2008, 02:58 PM
 
Location: Los Angeles Area
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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.
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Old 01-04-2008, 08:32 PM
 
Location: property tax hell
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I've always wondered about that... And the key term here is "profit". How is that defined? i.e. I buy a ipod for $400, use it for 2 years... and sell it on Ebay or amazon for $200. What's considered profit? the $400 I paid was after tax money.... so I'm simply recouping my "loss". Am I going to take depreciation into this to determine my true profit? or is IRS looking at the $200 as profit?

I'm only asking this because someone told me that if you sell a car, that money you get is taxable.... which to me seems like we're getting taxed twice.
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Old 01-04-2008, 10:27 PM
 
Location: Cary, NC
2,408 posts, read 7,265,441 times
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Quote:
Originally Posted by macroy View Post
I've always wondered about that... And the key term here is "profit". How is that defined? i.e. I buy a ipod for $400, use it for 2 years... and sell it on Ebay or amazon for $200. What's considered profit? the $400 I paid was after tax money.... so I'm simply recouping my "loss". Am I going to take depreciation into this to determine my true profit? or is IRS looking at the $200 as profit?
You don't pay taxes on that, since it's not a gain. When you sell used stuff at a loss after using it, that is not profit and therefore, not taxable. And at least in my municipality, we don't pay taxes when we sell a car. When I buy a car for $40k or so, I pay taxes, registration & doc fees. When I sell it for less than $40k, I keep the money. The new buyer has to pay taxes, registration, etc.
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Old 01-05-2008, 11:08 PM
 
211 posts, read 575,080 times
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Quote:
Originally Posted by macroy View Post
I've always wondered about that... And the key term here is "profit". How is that defined? i.e. I buy a ipod for $400, use it for 2 years... and sell it on Ebay or amazon for $200. What's considered profit? the $400 I paid was after tax money.... so I'm simply recouping my "loss". Am I going to take depreciation into this to determine my true profit? or is IRS looking at the $200 as profit?

I'm only asking this because someone told me that if you sell a car, that money you get is taxable.... which to me seems like we're getting taxed twice.
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. So you had a $200 LOSS on your ipod (the $200 sales price less the $400 you paid for it originally). Nothing needs to be reported. This is true of most transactions when people get rid of their personal belongings... generally, whether it's your car that you're selling, or old clothes and household goods on Ebay or at a garage sale, you are selling them for less than you originally paid for them, at a loss, so no reporting necessary.
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Old 01-06-2008, 12:16 AM
 
Location: Palm Beach Gardens, Fla
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No. Sort of like a garage sale- would you pay taxes on that? I had a consignment service in which I offered to sell items for friends and neighbors on ebay for a small profit. My business was licensed (had my name registered, etc) and of course, I had to pay taxes on that: I charged for the service, then charged a small percentage off the final amount. When I sold household items and other things I wanted to get rid of, I had no need to report it.
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Old 01-06-2008, 05:57 AM
 
417 posts, read 1,360,190 times
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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....
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Old 01-06-2008, 05:33 PM
 
Location: Sunny SC
4,080 posts, read 9,371,952 times
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It depends...

If you have a business account with them, then you would have to collect sales tax for any purchases within your own state and pay those taxes.

If you have a regular account and are just cleaning out your closet, then no but you would have to check with your own states sales tax laws to find out what's the total amount you can make without paying tax.

This is how I understand it and how I sell things on those sites. My guess is most people are doing it however they can to avoid paying taxes.
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