Selling on Ebay and Income Tax

[Dave2]

If I sold something on Ebay because I didn't need it anymore (not selling as a business) would I have to report to the IRS or pay income tax on a percentage of the money I received from selling an item on Ebay?

[Bovon]

Yessir you sure would...small chance you would suffer if you don't tho, but its income, and according to law, all income must be reported. Simular to a waiter/waitress and their tips.

Selling anything is income, but we rarely follow thru with reporting it. I have sold a couple of old cars to friends, ect...and never reported it as income...but, I did violate the IRS law in doing so. Unless I could claim a loss due to depreciation, ect.

If eBay were to report all stuffs sold thru the auction, and who sold or bought what, then the IRS would have it in their data base, and could come tag you...

Even tho it is law, the IRS is generally not interested in small deals of a hundred or so bucks spred out over a year

[ragtop]

Now, I'm not a tax accountant, but the general principle is that you only have to pay taxes on the sale of merchandise if you made a profit.

For example:

If you are a reseller that buys a processor for $150, and you resell it for $200, then you should pay taxes on the $50 profit.

But, if you are just a computer enthusiast that bought a processor last year for $200, and now you sold it used for $50 - you lost money on the deal so no taxes are due.

Same thing applies to the used car example. If you bought a new car and sold it two years later for half what you paid for it, you don't owe any taxes. If you picked up a car real cheap at an auction, then cleaned it up a little and re-sold it at a profit - you should be sending part of your profit to Uncle Sam.