will i have to pay taxes if i sold over 200 items

[gweding]

I am afraid most sellers after deducting all the expenses,wont be showing much of a profit.

[sockmonkeydave]

I went into H&R Block LAST summer, and ask about doing my taxes for the last 4 years, they said no problem.

Seems the IRS only gets their knickers in a bunch when you owe them money.

When THEY owe you money, they pay interest, I thought hey, this is better than what I get from my bank.

i really need to get that done, but with debtors prison, I get three hots and a cot.  lol

I just got a summons for jury duty, waved it in the wife's face, and said "now I have a job"

[tryno2]

I don't think we should be suggesting that  anyone should  break the law.  

[sandrar2345]

I agree that it is all about profit.

For example, if you are selling your personal stuff that you no longer want or need, let's say a pair of pricey designer shoes that you paid $200 for when new, and now you are selling them for $25, then you are taking a loss. No profit there.

But if you are buying items at a lower cost and selling them for more than you paid for them, then you are making a profit -- assuming expenses and fees don't eat up all your profit.

[twnpopcards]

---

@unluckytheloser wrote:

OP, 

The number of transactions you have has absolutely nothing to do with whether you pay taxes. 

There are people who sell 1 item who owe taxes, and there are people who sell thousands of items who do not pay any taxes. 

If your income is taxable income, it must be reported. 

Unlucky

---

As somebody else stated either above or below this message I am responding to,  If you are selling your personal items that you bought and are selling them for a loss then there is no tax due.  Also if this is a hobby and you are not really making an income when all is said and done, that is also not reportable.  As I remember (sorry but its been awhile since I retired) if you had a loss in 3 out of 5 years the business was considered a hobby (unless you had a brick and mortar building paying rent etc).  Rules have changed as the Internet has flourished and many real businesses do not have a brick and mortar presence anymore but are really trying to be a business, yet may lose money 5 or 6 years in a row, so those rules have become more and more flexible. 

The IRS regulations state that all income is taxable, regardless of how it was produced.  You are allowed to write off the cost of doing business and the cost of the goods you sell.  If this creates a loss, you can write the loss off on your taxes and reduce the tax you owe on other income (wages, dividends, stock sales, rents, royalties, etc).  However if you continually have losses the IRS can rule that the business is a hobby and you will no longer be able to claim any expenses other than those that bring you down to a 0 income.  If that is your only income, you have a much better chance of convincing them that the loss is legit, but it wouldn't matter since you tax would be zero regardless.  Any profits earned, whether legal or illegal (selling drugs, gambling, theft, embezzling) are all subject to tax, period.

As for using your home for a tax writeoff.  You can always write off part of your utilities, home mortgage interest and other items related to your home to lower the social security tax due on this income, but I would highly discourage writing off a portion of your home (also call depreciation).  This is due to the fact when you go to sell your home the percentage of gains on the house that you claimed as business usage become taxable and where current laws allow you to exclude the first $250K profit on a house, if you have claimed part of it as a business usage that percentage of the gain becomes taxable.  You also have to reclaim all the value of the house that you depreciated over the years.  For those that do write off the portion of the house, remember you have to break out the cost of the house from the land using the original purchase documents and the property tax bills. 

Anybody not sure of anything mentioned above should speak with a tax expert or CPA for advice on how they should proceed.  I am a former CPA and what I mentioned above is just friendly information, not advice, so please do not depend on it for accuracy as I am  no longer up to date on current tax laws.

David

Twnpopcards

[neneland2012]

That is my understanding as well.  If you're selling personal items whose value now is less than original, it is like a garage sale - no profit and no claiming.  I can find the exemption if I need to - I got it here 2 years ago!

[wizpan]

depends if minus expenses you make a taxable profit - you will have to declare as a business though with the tax dept

[nicholas_bickhart2a76]

Over the years, I have purchased and played many video games.  I sold 200 this year on ebay.  Most I paid $60 for or somewhere around there and a lot I sold for around $10 or so.  I have no receipts for these games, just like most people.  Question is do I need to stop at 200 items so that I don't have to claim it on my taxes?

[david*42]

No, you don't have to report it, since you're not making any net profit.

PayPal sends you (and the IRS) a form 1099-K if you have at least 200 transactions AND they are worth over $20,000. If you don't pass both of those thresholds, you won't get a tax form.

[phcd1]

---

@tryno2 wrote:

Careful on deducting part of your rent/mortgage as a home office expense.  The IRS rule reads that 

1. Regular and Exclusive Use.

You must regularly use part of your home exclusively for conducting business. For example, if you use an extra room to run your business, you can take a home office deduction for that extra room.

Focus on the word Exclusive, if you use the same area for general internet browsing, as an exercise room, as a bedroom, dining room or whatever then you wouldn't be able to take the deduction.  

---

Don't forget you just made a personal item a business item and when you go to sell it (your home)....

http://www.bankrate.com/finance/money-guides/home-office-can-have-hidden-tax-costs-1.aspx

[sneaksforweeks_brown]

 What if you have sold over 200 items but not $20,000. Are they still sending tax form?

[lookng2015]

No, to get a 1099 from PP you have to sell over $20k AND 200 transactions, BUT you should be paying tax on your income regardless.

[baantiques]

Yes, but the beauty of how the tax system is laid out is you have some generous deductions you can use to reduce or eliminate the amount you pay.

I just drove to another state to go to a big auction.  It ended up being about 1000 miles total, plus meals, etc.  All that is deductable as a business expense, including about $530 in mileage expenses.  Now, I didn't SPEND $530 to get there - only about $125.  Keep track of everything, even the miles on your car drving to and from the post office, home office space, cost of goods sold, depreciation of equipment like computers, etc.

[kh-cathy]

Hello Everyone,

Due to the age of the thread, it has been closed to further replies.  Please feel free to start a new thread if you wish to continue to discuss this topic.

Thanks for understanding!​​​​​​​