Ebay tax reporting drops from $20,000 to $600

[BobC]

Originally Posted by Michael B

Bob,

Thank you for writing all you do. I am amazed at all of the incessant hand-wringing everyone does over something that has essentially been there all along. I sold on Ebay for many years and never had any problem. You sell, you profit, you pay your taxes. That is not hard to understand. If you are making a concerted effort to try and obey the law you will have no problems. The IRS bogeyman is not hiding in your bushes watching your every move.

There are plenty of opportunities to reduce the liability which seem to be lost in the conversation. What is the basis of the item? Honest, best guess will work. No one is going to pore over 10 year old issues of Baseball Card magazine to find out that you overstated how much you paid for an item by 75¢. There are also packing materials, postage, other supplies (pens), roundtrip mileage to the post office, subscriptions to any site or publication which helps you price your items and ebay fees. Also the expenses of travelling to a show - hotels, admission, food, gas (or mileage), tolls, parking, etc. If you are attending a show to purchase items to eventually sell the expenses to attend the show are part of the deduction equation. These travel expenses can also be incurred by going to flea markets, antique shows, stamp/coin shows, yard sales. Plenty of people have posted new acquisitions on this board that they found at a yard sale and then intend to sell. There were expenses over the money paid for the item that are part of the true cost.

I may be oversimplifying the facts, but I learned from a former work acquaintance who was an attorney/accountant that it is important to pay attention to what you are spending to acquire something you intend to sell for a profit.

All true. One of my all-time mantras has always been:

Tax evasion is a crime, but tax avoidance is your Constitutional and God given right! Amen.

As for the comments about the importance of expenses, that is also very true. But the exact types and amount of expenses you end up deducting can vary greatly depending on whether or not you file your tax return and report the sale of your cards as a dealer, as an investor, or as just a pure hobby collector. Can actually make a big difference.