Starting an Ebay Business

[BobC]

Originally Posted by Gusturd

I've certainly learned a lot reading (and re-reading) the replies here and the clearer things become the more complicated they seem to become.

When it comes time to report these sales, would/could I actually report them three different ways? I'd see myself fitting all three categories. I have the cards I display, the cards I keep locked away and the cards I've just accumulated and don't care so much about that I would probably start selling with.

Yes it can be very complicated and confusing, without any easy, clear-cut answers. Also why it may make a lot of sense to consult a tax professional to review a person's unique set of tax facts and circumstances.

And yes, someone can have card sales under all three different options/treatments (Dealer, Investor, Collector) in the same year. Would need to keep proper records and such to do so. Not even unique to selling cards either. Think of a guy who buys and immediately flips and sells a house. That is treated as a sale of inventory subject to profit being treated as ordinary income. For that he's a Dealer. Same guy sells another house he had rented out for a number of years. Gain on this sale would likely get taxed as long term capital gain. So for that sale he's kind of like an Investor. And finally, he sells the house he lived in for years. Most likely any profit on the sale wouldn't be taxable, but if sold for a loss, he wouldn't get to use/deduct the loss on his tax return either. So for that house he's kind of like a Collector selling a personal asset.

I passed the CPA exam back in the 70's, and have been practicing ever since, and as such know a little of what I'm talking about. So if you have any questions, you (or anyone else) can just PM me and maybe exchange phone numbers to discuss further. It would be a lot faster and easier than all this typing. LOL