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Community Member
Accepted Solution
Does ebay report earnings to the irs?
Posts: 1
Registered: ‎01-10-2010

Does ebay report earnings to the irs?  If so, is it on an annual basis no matter the amount, or once you cross a $ threshold for the tax year, or cross a $ threshold for a lifetime, or ...?  Also, what is the law regarding hobby selling vs. a true business?  I have not kept track of anything as I could not care less about profits.

Accepted Solutions: 2
bostongrammy
Community Member
Posts: 9,289
Registered: ‎11-24-2002
Answered
in reply to cylonrdr

Hobby vs business only matters if you're planning to offset losses.  Otherwise, all the IRS cares about is that you must report your profits as income.

 

Here's the IRS's specific page for "online auction sellers":

http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Tax-Tips-for-Online-Auction-Sellers

 

You also should read this page from PAyPal which explains when they report to the IRS:

https://cms.paypal.com/us/cgi-bin/marketingweb?cmd=_render-content&content_ID=marketing_us/IRS6050W

pi_r_square
Community Member
Posts: 18,695
Registered: ‎02-25-2003
Answered
in reply to cylonrdr

See your local IRS office for information.  Remember, if you underreport your earnings, you may get a surprise envelope in the mail!

 

While thinking about that, read this:

http://www.irs.gov/businesses/small/industries/article/0,,id=163622,00.html

 

and this:

http://www.irs.gov/businesses/small/industries/article/0,,id=202941,00.html

 

and this:

http://www.irs.gov/businesses/small/industries/article/0,,id=202939,00.html 

 

and this:

http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Tax-Tips-for-Online-Auction-Sellers

 

and PayPal's info, here:

https://cms.paypal.com/us/cgi-bin/marketingweb?cmd=_render-content&content_ID=marketing_us%2FIRS6050...

 

 

•  If your activity is a HOBBY, report your income on line 21, Form 1040. You can´t deduct expenses in excess of your income, and you can only deduct qualifying expenses if you itemize deductions

 

•  If you consider your sales on eBay as a BUSINESS, you must fill out the IRS 1040, Schedule C, at a minimum.  You may deduct expenses.

 

•  If you are selling junk from around the house, those casual sales are usually not taxable.

 

•  If you are buying things for resale on eBay, you are a business, and your income from the business is taxable.

 

The IRS says:

"Generally, an activity qualifies as a business if it is carried on with the reasonable expectation of earning a profit."

 

 

 

 

If you want to see your history of sales, as shown on PayPal, try

https://history.paypal.com/us/cgi-bin/webscr?cmd=_history

 



 Please return to your question soon, and click "Accept as Solution" for any helpful answers, from any responder. If you were asked for clarification, please add your comments very quickly -- otherwise the responders may be unable to give further help
Other Answers: 1
buybuy42
Community Member
Posts: 6,022
Registered: ‎02-01-2011
Answered
in reply to cylonrdr

   If you don't care about profit,

why not just give the items away.?

          Donate them -

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