Q: I started selling items from around my home that I don’t want anymore on eBay.  I am selling BELOW what I paid for these items.  I’m not trying to make a profit, I’m just trying to get rid of items no longer wanted.  Is this considered a business?   Do I have to report my eBay sales to the IRS?

A: Selling personal items at a loss is not a business activity, so you don’t have to worry about keeping track of or reporting this activity on your tax return.

The IRS will not allow you to claim a loss for personal items sold on eBay.  However, the minute you purchase something with the intent of selling on ebay for a profit, you’ve got a business, and then you DO need to start keeping track of and reporting your activity.

Related Posts:

• Selling on eBay? The IRS wants it’s share…
• Tax and Accounting Solutions for eBay Sellers
• Q&A: Do I have to pay tax on a family heirloom sold on eBay?

As an eBay seller and a CPA, I get a lot of questions about eBay and taxes.

I have been answering questions about eBay and taxes on my blog and on several eBay membership forums for a while now, but as the questions keep coming, I realize that eBay sellers need more help than I can provide on a blog/forum.

As a result, I am now offering the following services to help other eBay sellers with their financial and tax planning needs:

New Business Consulting

Tax Preparation

Tax Planning

Whether your eBay activity is a hobby or a full-time business, you need the best tax and financial advice available.  For more information about the services above, please email me at kristine@beacon-advisor.com.

Related Posts:

• PayPal and Ebay Must Report to the IRS
• Q&A: Do I Have to Pay Tax on Personal Items Sold on Ebay?
• Q&A: Do I have to pay tax on a family heirloom sold on eBay?

Q:  If I sell a family handed down 1700′s grandfather clock on eBay, do I have to pay income tax on it?

A:  Good question!

There are different tax rules for selling on eBay, depending on whether you are conducting a business, selling as a hobby, or selling collectibles.

For purposes of answering this question, I’m assuming that you are not in the business of selling grandfather clocks or other antiques on eBay.  If this is true for you, then you fall into the “selling collectibles” category.

Generally, if you are selling collectibles (artwork, stamps, coins, etc.) on eBay, then you report your gain on the sale on Schedule D, Capital Gain or Loss.  The capital gains rate for collectibles is 28 percent.  Losses are not deductible.

For more information, see IRS Publication 550, Sale of Investment Property.

Related Posts:

• Q&A: Do I Have to Pay Tax on Personal Items Sold on Ebay?
• Tax and Accounting Solutions for eBay Sellers
• PayPal and Ebay Must Report to the IRS