Sell It on ebay!
You May Have to Report the Sale on Your Tax Return
What most people don’t realize is that when they sell
property at a profit, the gain is taxable. Sales on eBay have skyrocketed
to over $24 billion in 2003 and millions of taxpayers are earning good
money selling items they either make or just don’t want any longer. If
you’re one of them, you need to decide if your activity is a business or
just a hobby. In any event, any profits are taxable, and you must report
them on your tax return.
For most taxpayers who sell on eBay, this is not an issue. Often items are
sold for less than what was originally paid for them. If this is the case,
losses on the sale of personal use property are not deductible and are not
required to be reported. Unfortunately, personal losses cannot be used to
offset any profits you may have.
The
same rules apply to personal items sold in a garage or yard sale -- if an
item is sold for more than its cost, the gain is taxable income and should
be reported as a capital gain on Schedule D. If a taxpayer regularly
receives income from yard sales or ebay sales, the taxpayer may be
operating a busines and should report income and expenses on Schedule C as
a sole proprietor.
