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Taxing eBay Part Deux


When my column on paying income tax on eBay profits ran it brought a wave of emails on whether you were required to report income earned from eBay sales to the IRS sparked a number of additional questions and comments from eBay sellers who were hoping that I could somehow validate that their eBay activities were mere hobbies instead of actual businesses and therefore not susceptible to IRS taxation.

Several folks argued that just because their little eBay hobby generated a little cash, that didn't make it a full blown business. It seems they consider the income from their little hobby to be financial manna from Heaven and thereby not taxable by earthly tax collectors. I've always been amused by folks who try to impress me with talk about their "little side business" but when the subject turns to taxes they suddenly refer to it as "my little hobby."

All arguments aside, the conclusion that I came to after reading each of the emails was always the same: while you may think selling on eBay is just a fun pastime and the money you're making is not reportable as income, depending on the circumstances, the IRS would probably disagree with you.

It seems that everyone likes making money, but hates carving off a piece for good old Uncle Sam. Welcome to free enterprise, folks. If you're going to come to the dance you have to pay the fiddler.

The IRS rules are clear: you must pay taxes on all personal and business income and that includes money you make selling on eBay.

In its most basic sense, the IRS rules can be interpreted to mean that if you buy an old vase at a garage sale for $10 and sell it on eBay (or elsewhere) for $20 you made a $10 profit and therefore must report it as income and pay Uncle Sam his fair share.

In reality, if you are a casual seller who only sells a few items on eBay every now and then it's doubtful the IRS is going to let loose an army of agents to collect taxes on the few bucks you make. However, if you consistently sell on eBay the IRS may deem your activities to be business oriented and you will be required to file a Schedule C and claim the income.

As mentioned last week, the IRS uses a number of factors to determine if an eBay hobby that generates sales revenue is actually a business. These factors include:

· Do you carry on the hobby in a business-like manner?

· Do you spend considerable time working on the hobby?

· Do you depend on income from your hobby for your livelihood?

If the answer to any or all of these question is yes, you're running a business, not carrying on a hobby, and you are responsible for paying taxes on your income.

What's eBay's take on all this? Naturally eBay is vehemently opposed to anything that might rock the eBay boat. eBay does not issue 1099 tax forms to sellers, nor does it report seller's sales figures to the IRS.

eBay considers itself merely to be a facilitator, meaning that they provide a marketplace in which buyers and sellers come together to do business.

Furthermore, under its current system it would be impossible for eBay to issue accurate 1099s to sellers. eBay does not track if a seller actually gets paid by the buyer, so eBay has no idea how much money - if any - actually changes hands at the end of each transaction.

On the bright side, if you do sell on eBay as a business you can deduct a number of business expenses, including the cost of inventory, listing fees, shipping, envelopes, packing materials, etc.

You might also be able to deduct things like the purchase of a computer for business use, office space (even if it's a home office), office supplies, and more.

Talk to your accountant if there's any doubt as to whether you should or should not be paying taxes on your eBay earnings.

Small Business Q&A is written by veteran entrepreneur and syndicated columnist, Tim Knox. Tim's latest books include "Small Business Success Secrets" and "The 30 Day Blueprint For Success!" Related Links: http://www.smallbusinessqa.com http://www.dropshipwholesale.net


TODAYS NEWS BY OFFICEJAX FREE ADVERTISING AND AD EXCHANGE SOLUTIONSMORE RESOURCES updated Thu. August / 18 / 2022

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DNR hosts confiscated equipment auctions | Community | hometownsource.com  ECM Publishers

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Children's remains found in suitcases bought by family at auction, New Zealand police say  CNN

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New Chile power auctions needed to meet dema...  BNamericas English

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Zoo auctions orangutan art as NFTs, $550 starting bid for first-of-its-kind conversation effort  Fortune

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1974 Bricklin SV-1 Is Our Bring a Trailer Auction Pick of the Day  Car and Driver

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Tax Compliance: Understanding Tax Issues With Auctions - Tax Authorities - United States  Mondaq

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Memorabilia of legendary L.A. athletes included in massive auction  KTLA Los Angeles

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Sullivan Auctioneers and BigIron Auctions together allow for growth in online auction market  Geneseo Republic

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This Crocker Could Be the Most Expensive Motorcycle to Sell at Auction  Robb Report

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Idaho auctions 10 Priest Lake lots for $24,542,000 - Local News 8  LocalNews8.com

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Silverstone Auctions Princess Diana Ford Escort Auction  HYPEBEAST

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Exceptional 1797 Half Dollar in Stack's Bowers Showcase Auction  CoinWeek

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Ferrari Dominates the Most Expensive Cars Sold at Car Auctions  MotorBiscuit

Franklin Co. expects loss from property auctions | News | pressrepublican.com - Plattsburgh Press Republican
Franklin Co. expects loss from property auctions | News | pressrepublican.com  Plattsburgh Press Republican

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DR Congo Opens Up Oil Auctions to Crypto and Carbon Firms  The Motley Fool

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PRESS RELEASE: Surplus Auction for the City of Beaumont Starts Tomorrow – Anyone Can Bid  City of Beaumont, Texas (.gov)

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Buffalo Trace flood relief auction includes rare Pappy, Blanton’s, Antique Collection  Lexington Herald Leader

Sotheby's to Sell NFT Jewelry Item at Upcoming Auction - JCK
Sotheby's to Sell NFT Jewelry Item at Upcoming Auction  JCK

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August 19, 2022: Auction Calendar  Wisconsin State Farmer

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Frank Frazetta Covers Ghost Rider on Tim Holt #17, Up for Auction  Bleeding Cool News

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Catawiki Holds Exclusive Auctions Week  Fine Books & Collections Magazine

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Magic: The Gathering - Arcane Wizardry Deck On Auction At Heritage  Bleeding Cool News

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New England Auto Auction™ Explodes into Two Days of Rare and Collectible Vehicles Crossing the Block  PenBayPilot.com

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Imperial Palace Casino Equipment Heads To Court-ordered Auction To Cover Debts  Casino.Org News

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Parting With a Lifetime’s Collection: Legard Farm Auction Showcases Farming History  Loudoun Now

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Online Watch Auctions Go Deeper Into Luxury Territory  The New York Times

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Elite Carson City Coins Offered at Heritage Auctions August 22-28  CoinWeek

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M&M assets to be sold at auction  Vertikal.net

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The car with Paul Newman's name on it is up for auction  SFGATE

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Manor Estate in Exclusive River Oaks, Houston to Auction via Sotheby's Concierge Auctions  EIN News

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Auction Draft Strategy for 2022 Fantasy Football  fantraxhq.com

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New faces including at Catherine Southon Auctioneers, Olympia Auctions and LAPADA  antiquestradegazette.com

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Auction of Washington Wines raises $4m  decanter.com

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Jackson, Wyoming Estate Bordering the National Elk Refuge to Auction with No Reserve via Sotheby’s Concierge  EIN News

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Hitler's watch sells for $1.1 million at Alexander Historical Auctions  The Washington Post

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She bought a house on a fledgling auction site. Now she faces over $100K in repairs  CBC.ca

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COSL announces Independence County tax auction results | News | guardonline.com  Guard Online

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BoG to boost foreign exchange auctions through mining, foreign oil firms  GhanaWeb

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Brooklyn's Weekly Foreclosure Auctions: Who Goes and Why?  Curbed

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The Chemung County real estate auction wrapped up today, here’s what sold  WETM - MyTwinTiers.com

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Brazil cancels A-6 energy tender, might postpone backup auction  BNamericas English

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Aveda founder Horst Rechelbacher's art collection heading to auction - Minneapolis / St. Paul Business Journal  The Business Journals

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What to Know About a Car Auction | Chase  Chase News & Stories

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ODOT to hold auction for land in Henry County  Defiance Crescent News

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Christiansburg auction company sells ‘holy grail’ of firearms  WDBJ

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Southport Fireman's Auction  Boothbay Register

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RESULT OF RIKSBANK REVERSED AUCTIONS KOMMUNINVEST BONDS  GlobeNewswire

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Arlington International Racecourse to Hold a Series of Auctions  NBC Chicago

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Former NBA player Slava Medvedenko auctions championship rings for Ukraine  NBA.com

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Unique Peoria recreational complex is up for auction. Here are details  Peoria Journal Star

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The Art That Inspired Joan Didion Goes to Auction  Hyperallergic

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Ferrari 288 GTO, an '80s icon, heads to auction  Motor Authority

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Why Mecum Auctions at the Pa. Farm Show Complex is a ‘rock concert’ for car collectors  PennLive

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KAR Auction Services, Inc -- Moody's upgrades KAR's ratings, corporate family rating at B1; outlook stable  Yahoo Finance

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$121m Bonds Sold in Tuesday Auction  Financial Tribune

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ACV Auctions has hit a speed bump, but its CEO remains cautiously optimistic  Buffalo News

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Hitler's Watch Sells for $1.1 Million at Controversial Auction  Smithsonian Magazine

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OpenSea is now hosting a Nakagin Capsule model NFT auction  Archinect

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Mecum Auctions sets new record for event in Harrisburg  WGAL Susquehanna Valley Pa.

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Daredevil's Takeover of Silver Streak Comics, Up for Auction  Bleeding Cool News

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Twenty-Year Bond Auction Attracts Well Below Average Demand  Nasdaq

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Here Are the 15 Most Expensive Artworks Sold at Auction Around the World in July 2022  artnet News

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Pokémon Pinball In English For Auction Over At Heritage Auctions  Bleeding Cool News

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COSL announces Jackson County tax auction results | Newport | jonesborosun.com  Jonesboro Sun

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Newman/Haas Racing Is Selling 42 Indy Cars at One Big Auction Oct. 29  autoweek.com

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Kirk Gibson hosting golf outing and auction to benefit foundation for Parkinson's  WXYZ 7 Action News Detroit

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FirstEnergy Ohio Utilities' Competitive Bidding Process Auction: Information Session for Prospective Bidders on Wednesday, August 17, 2022  Business Wire

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Warren Buffett’s art auction benefits Girls, Inc.  WOWT

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Online property auction in Seneca County begins Friday  Finger Lakes Times

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Machinery Auction Merger: BigIron Auctions Acquires Sullivan Auctioneers LLC  Agweb Powered by Farm Journal

STORAGE AUCTIONS - Columbia Star
STORAGE AUCTIONS  Columbia Star

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Credit committee lists 8 bonds eligible for Russia CDS payout auction  Reuters

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Italian painting in auction features collector of Roman ancients  Coin World

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Senators’ new bill expands meat processing to auctions  AGDAILY

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U.S. launches new 5G mid-band wireless spectrum auction  Reuters

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ESAC announces 3rd Annual ArtSquared Online Auction  Fox 10 News

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HiBid.com Auctions Range from Vintage Comic Books to Gold Bullion Following a $33.4 Million Week  PR Newswire

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Rowley Auctions accepting consignments for upcoming auction - upnorthvoice.com  Up North Voice

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Kobe Bryant's Ukrainian teammate auctions championship rings at $200,000 for rebuilding efforts  The Sportsrush

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Mint 1952 Mickey Mantle card could fetch record price at auction  ESPN

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New Sandhills Global Market Reports Show Growing Gap Between Asking and Auction Values Across Equipment and Truck Markets  PR Newswire

July 22, 2022: Auction Calendar - Wisconsin State Farmer
July 22, 2022: Auction Calendar  Wisconsin State Farmer

Eastgate Mall sold at auction - FOX19
Eastgate Mall sold at auction  FOX19

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ELITE AUCTIONS Announces August 19 Auction of Historic Mansion & Local Landmark in Suffolk, VA  PR Web

Auction of A. Lange & Söhne Watch to Support Prince Charles’ Youth Charity - Barron's
Auction of A. Lange & Söhne Watch to Support Prince Charles’ Youth Charity  Barron's

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Hotels Continue to Lead CMBS Loan Auctions  Commercial Observer

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LUV Institute to celebrate 10-year anniversary with Parade of Hearts auction this weekend  CBS News

The Drawing Center 2022 Benefit Auction Art New York - HYPEBEAST
The Drawing Center 2022 Benefit Auction Art New York  HYPEBEAST

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Enormous Livestock Auction In Erie County This Weekend  wyrk.com

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Oakland, Macomb county foreclosure auctions move online  Crain's Detroit Business

Detroit police auctioning off cars, trucks, RV, and more -- See the auction schedule here - FOX 2 Detroit
Detroit police auctioning off cars, trucks, RV, and more -- See the auction schedule here  FOX 2 Detroit

From pit lane to the press, broadcast booth to auction block, Steve Matchett can tell a world of stories. - Monterey County Weekly
From pit lane to the press, broadcast booth to auction block, Steve Matchett can tell a world of stories.  Monterey County Weekly

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Sherwood house on 20 acres sells for $482,820, $2 over the lowest possible bid in IRS auction  OregonLive

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Skeleton of a Gorgosaurus Sells at Auction for $6.1 Million  The New York Times

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Shocker Softball Dinner & Auction Set for Sept. 24  GoShockers.com

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Branch County Fair auctions bring in nearly $427900  WTVB

Long-lost Elvis Presley jewelry heads to auction - CNN
Long-lost Elvis Presley jewelry heads to auction  CNN

Art center seeking pieces for upcoming auction - Kenai Peninsula Online
Art center seeking pieces for upcoming auction  Kenai Peninsula Online

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Taiwan plans 100MW floating offshore wind auction  Windpower Monthly

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Orono-OldTown Kiwanis annual charity auction and yard sale  Bangor Daily News

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