EBAY Question
 

My wife has been selling lot of stuff on EBAY lately.
Do we need to do anything for tax purposes? I am concerned we will get nailed by the IRS for income tax violations. Can someone help me out?
thanks,
Waynw

That's a very good question. I wonder how long it will be until ebay/paypal report transactions to the IRS.

Technically, if you so much as sell a used muffler bearing on the Pelican classifieds for $5, you're supposed to report it.

It's government. It's all about money. Duh. :)

You don't have to report income unless it's really profit. Seems most of the things I sell on Ebay cost more than I end up getting for them. :(

I suspect the only " reporting" required for most sales is the gain-on-sale, if any.

In other words, if you bot an MFI pump for $200 and flipped ot for 400, you should report the gain, probably on Sch. C. Practically speaking, I've never seen this in all my years. Also, don't forget that if you paid 'ol Gus to R&R the pump, this cost will be used to offset the gain.

IMHO

And if she is selling regularly for a profit, you should be writing off half your house, the miles driven to the post office to ship, your computer, internet connection, digital camera, etc, etc. You may find that by playing by the rules you come out ahead overall!

I sold a collectable guitar case on EBAY. Cost basis was about $60, sold it for $600. You bet I reported it.

Not sure how they'd find out.

I've only been audited once by the IRS, and I prevailed in the issue they questioned, BUT I never want to do it again. It took a great deal of my time, and caused significant anxiety. I'm always forthright in my taxes and if there is any question, I err on the conservative side.