Too_Many_Tools wrote:
Been there...done that...got the kick in the teeth for being helpful.

Experience never comes cheap...

Count yourself lucky....for a small price of admission, you just
learned more about your neighbor than you likely wanted to know. I can
guarantee you that the experience just saved you from getting into
something really serious with the neighbor down the road and paying a
much larger price.

And you are right about not telling anyone that you do
Ebay....neighbors, friends and family may turn you over to the IRS for
their cut of the unreported income....happens all the time.

I would be surprised if the IRS doesn't monitor ebay sellers to some extent

"I would be surprised if the IRS doesn't monitor ebay sellers to some
extent "

They do.

So do other Federal and State agencies.

And more than one person has learned that previous unreported Ebay
income counts in divorce proceedings if a marriage tanks.

The really interesting issue with the IRS is that they can and will go
back years to investigate whether tax fraud was committed (with no
statue of limitations)....and Ebay has the records available online for
the auditing process.

It's a brave new world out there...

TMT

In article .com,
"Too_Many_Tools" wrote:


The really interesting issue with the IRS is that they can and will go
back years to investigate whether tax fraud was committed (with no
statue of limitations)....and Ebay has the records available online for
the auditing process.

Just because you sold something on ebay does not mean you made a taxable
profit, you likely sold it at a loss. If you sell your used car by
classified or ebay for $5000, do you think that is taxable income? OTOH
if you sell a $5000 car every week the IRS will get suspicious.

--
Free men own guns, slaves don't
www.geocities.com/CapitolHill/5357/

"Just because you sold something on ebay does not mean you made a
taxable
profit, you likely sold it at a loss."

LOL...Yeah right...millions of people are selling on Ebay because they
like to lose money. ROFLMAO

"If you sell your used car by classified or ebay for $5000, do you
think that is taxable income? "

If you made money on the deal, it is taxable income. If you swap items
and had a taxable gain, you are liable for paying taxes on that
gain...even if money did not trade hands.

"OTOH if you sell a $5000 car every week the IRS will get suspicious."

So your opinion is that if you stay "under the IRS radar" it's ok to
cheat the IRS and those of us who pay our taxes?

Times are a changing....thanks to the magic of technology. Computers
today allow economical data searches for tax dodgers that are catching
those who have been "under the IRS radar" for years. And to make it
even better, the Feds share their data with the States so you can end
up paying any state income tax you may have "forgotten" too.

As for "loosing money", when they come knocking on your door just be
sure you have the paper work that supports that claim and any
others....incuding the one that you didn't have to report the income.

The larger the income from Ebay, the more likely you will get that
knock on the door.

And they are knocking....and successfully prosuecuting Ebay sellers for
tax invasion.

Remember that tax fraud has no statue of limitations....and the IRS is
well known for following up years later to collect their pound of
flesh. With the financial records that Ebay keeps on each seller, most
of the effort/cost to the IRS to prove tax fraud is already done. This
makes chasing tax dodging Ebayers an efficient revenue source that can
be easily tapped. The IRS has already announced that they are expanding
their efforts to pursue wayward Ebay sellers who have "forgotten" to
report gains.

Meanwhile the fines and the interest on the unpaid income tax just
keeps increasing....

TMT

Too_Many_Tools wrote:
"Just because you sold something on ebay does not mean you made a
taxable
profit, you likely sold it at a loss."

I have a lifetime accumulation of things that I will be selling on ebay
starting next month. Many things I recall what I paid, in cash, likely
at a garage sale. I intend to keep records on each sale, including cash
basis and all expenses associated with the sale. I would expect to have
a fatter bank account, and a tax obligation that is a fraction of that.

Ignoramus19198 wrote:
On Wed, 14 Dec 2005 15:45:08 -0600, Rex B wrote:

Too_Many_Tools wrote:

"Just because you sold something on ebay does not mean you made a
taxable
profit, you likely sold it at a loss."

I have a lifetime accumulation of things that I will be selling on ebay
starting next month. Many things I recall what I paid, in cash, likely
at a garage sale. I intend to keep records on each sale, including cash
basis and all expenses associated with the sale. I would expect to have
a fatter bank account, and a tax obligation that is a fraction of that.


Assuming that you had these tools as hobby tools...

Check with your accountant, as gains on sale of these tools may not be
taxable (and that is the answer that I expect you to hear).

What is important when you make money on resale is whether you
intended to make a profit with them.

Example. Person A buys 11 400-600 A circuit breakers for $66 and
resells them for $1,400 within two months, as part of a pattern of buying
used industrial stuff and reselling it. A profit has been made and
taxes need to be paid.

Example. Person B buys a lathe for $15 at a garage sale and uses it
for 20 years for pleasure. Sells it on ebay for $300. There is no
profit motive and the gain is likely not to be taxable.

Find it out for sure with a tax pro, but look for someone recommended
who actually wants to help you besides collecting the fee.

That is very good information.
Thanks for posting.

Rex

In article ,
Rex B wrote:

Too_Many_Tools wrote:
"Just because you sold something on ebay does not mean you made a
taxable
profit, you likely sold it at a loss."

I have a lifetime accumulation of things that I will be selling on ebay
starting next month. Many things I recall what I paid, in cash, likely
at a garage sale. I intend to keep records on each sale, including cash
basis and all expenses associated with the sale. I would expect to have
a fatter bank account, and a tax obligation that is a fraction of that.

I remember quite clearly what I paid for all the stuff I sell;
unfortunately I was too gullible and paid 10x too much for it so even
after inflation I'm losing money hand over fist.

--
Free men own guns, slaves don't
www.geocities.com/CapitolHill/5357/

"I remember quite clearly what I paid for all the stuff I sell;...."

The IRS doesn't work on memories....they will want a paper trail.

Otherwise they price items for what they think will maximize their tax
revenue return.

It pays to document all purchases and to keep those records for later
usage.

TMT

In article .com,
"Too_Many_Tools" wrote:

"I remember quite clearly what I paid for all the stuff I sell;...."

The IRS doesn't work on memories....they will want a paper trail.

Otherwise they price items for what they think will maximize their tax
revenue return.

It pays to document all purchases and to keep those records for later
usage.

TMT


I document everything, and guarantee the ink is dry before the IRS sees
it

--
Free men own guns, slaves don't
www.geocities.com/CapitolHill/5357/