Is all your eBay income taxable?

Recently someone posted a comment to my post about the IRS looking at PayPal records for people who are trying to avoid paying taxes on eBay income. Click here to see the post and comment.

This person asked: so if I sell the junk in my basement, I have to pay taxes on it?

The answer is, in most cases no.

The reason is that the IRS has a rule about occasional income, such as the money you might make from garage sales or selling other used personal items. Also, chances are that you’ll get less than you paid for a used item when you sell it, so you’re not making a profit on the transaction that could be taxable income.

It’s a different story if you’re buying someone else’s junk and selling it – that’s a business. eBay sellers who shop at garage sales for items they sell on eBay and other online auctions should be tracking their income and expenses, and then reporting their income appropriately. Another situation where you might have to pay tax on the sale of a personal item is when you have a collectible that has increased in value.

If you’re cleaning out your closets, garage, attic, basement, etc., and make a little money in the process, that’s one thing. If you are running an ongoing business, that’s something entirely different.

And now for the disclaimer: check with a qualified tax advisor if you have any questions.

Jackie

What do you do with gifts you don’t want?

More than half of Americans recently surveyed by Harris admit to re-gifting – that is, rewrapping and presenting a gift they’ve received to someone else. Click here to read more about that.

Something else you can do with those gifts that you don’t like or can’t use and can’t return is to sell them on eBay. You can either post the item for sale yourself or use a storefront eBay seller such as QuikDrop to sell it for you. That way you can have the cash to use as you please instead of cluttering up your closets until you can get rid of the item.

Jackie

Boost Your eBay Profits

If you’re thinking about putting some things up for sale on eBay, whether you want to just clear out your closets or start an ongoing business, consider the tips in “Boost Your eBay Profits.” Writer Farnoosh Torabi interviewed me for this piece and did a great job of presenting a lot of advice in a short space.

Of course, if you want to know more, be sure to get the book I wrote with Charlene Davis, Make Big Profits on eBay. Visit my website at www.jacquelynlynn.com for more details and a link to purchase the book.

Jackie

News for PayPal users

The Texas attorney general has reached an agreement with PayPal designed to protect consumers. For the full text of the news release with details of what the agreement includes, please click here.

Jackie