Tax Questions for Sellers (Schedule C)

[ValKehl]

Hi Gary - I'll try to help you with your Schedule C questions. However, FYI, I am a retired corporate & governmental accountant (NOT a tax accountant), and the only tax returns I do are my own; but I do Schedule Cs for our (my wife and me) eBay sales activity. If there are any tax accountants/attorneys on this Board, please do not hesitate to correct me if I am wrong. This said, here are my responses to your questions:

(1) Yes
(2) Yes
(3) I would include this $20 "loss" on Line 36. Alternatively, it could be included on Line 39.
(4) Yes, by virtue of including the cost of this worthless card on Line 36 and not including it on Line 41, you will in essence be writing this "loss" of via the Cost of Goods Sold on Line 42.
(5) Same as (4) above. If you put items (3) thru (5) on Line 27-Part V, the end result will be the same, however I believe that the costs associated with the products you sell should be reported in Part III.
(6) Yes. The purchases you didn't sell would be reported on Line 41.
(7) Yes. And, the TPG costs for cards you didn't sell become part of your end-of-year inventory on Line 41.
(8) I trust that you realize that checkbox 32a/b is applicable only if you had a net loss on this business activity. I assume you would check box 32a, unless there is an unusual situation, such as someone else having agreed to cover any losses that you incur.

I hope this is helpful to you. Please don't hesitate to LMK if you have any questions.
Best,
Val
ekehl333@aol.com