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Income Tax and Personal Online Sales

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  • Income Tax and Personal Online Sales

    Last year I sold a number of items online through Half.com and Amazon.com
    Marketplace. All of the items were originally bought for my personal
    use, and almost all of them were sold for less than I originally paid for
    them. As I understand it, money received for personal use items sold at
    a loss does not have to be reported since such losses are non-deductible;
    correct?

    Only four of the items got me more than their original purchase price,
    and the total profit on those sales amounted to about ten dollars. Is
    that amount significant enough that it needs to be reported, and if so,
    can it just go under miscellanous income on 1040 Line 21? It doesn't
    seem to make sense to treat it as business income since overall my sales
    activity didn't constitute a business, and treating it as capital gain
    income would be awkward since I don't know the exact purchase date of
    books that I've had around for years.

    Thanks for any input.

  • #2
    Income Tax and Personal Online Sales

    Janice wrote:
    Last year I sold a number of items online through Half.com and Amazon.com Marketplace. All of the items were originally bought for my personal use, and almost all of them were sold for less than I originally paid for them. As I understand it, money received for personal use items sold at a loss does not have to be reported since such losses are non-deductible; correct? Only four of the items got me more than their original purchase price, and the total profit on those sales amounted to about ten dollars. Is that amount significant enough that it needs to be reported, and if so, can it just go under miscellanous income on 1040 Line 21? It doesn't seem to make sense to treat it as business income since overall my sales activity didn't constitute a business, and treating it as capital gain income would be awkward since I don't know the exact purchase date of books that I've had around for years. Thanks for any input.

    don't worry about it


    Comment


    • #3
      Income Tax and Personal Online Sales


      "Janice" <[email protected]> wrote
      Last year I sold a number of items online through Half.com and Amazon.com Marketplace. All of the items were originally bought for my personal use, and almost all of them were sold for less than I originally paid for them. As I understand it, money received for personal use items sold at a loss does not have to be reported since such losses are non-deductible; correct?


      Yes.

      Only four of the items got me more than their original purchase price, and the total profit on those sales amounted to about ten dollars. Is that amount significant enough that it needs to be reported, and if so, can it just go under miscellanous income on 1040 Line 21?
      For $10, yes. Your total taxes wouldn't be impacted in most cases.


      It doesn't seem to make sense to treat it as business income since overall my sales activity didn't constitute a business, and treating it as capital gain income would be awkward since I don't know the exact purchase date of books that I've had around for years.

      It would not be a business (Schedule C) but it should be reported (the gains
      anyway) on Schedule D. But the $10 difference isn't a huge impact either
      way.




      --
      Paul A. Thomas, CPA
      Athens, Georgia
      taxman at negia.net


      Comment


      • #4
        Income Tax and Personal Online Sales

        In article <[email protected] ews>,
        [email protected] says...
        don't worry about it
        Thanks, but I always worry. :-)

        Comment


        • #5
          Income Tax and Personal Online Sales

          In article <[email protected]>, [email protected] says...
          "Janice" <[email protected]> wrote:
          ....
          Only four of the items got me more than their original purchase price, and the total profit on those sales amounted to about ten dollars. Is that amount significant enough that it needs to be reported, and if so, can it just go under miscellanous income on 1040 Line 21?For $10, yes. Your total taxes wouldn't be impacted in most cases.
          It doesn't seem to make sense to treat it as business income since overall my sales activity didn't constitute a business, and treating it as capital gain income would be awkward since I don't know the exact purchase date of books that I've had around for years.It would not be a business (Schedule C) but it should be reported (the gainsanyway) on Schedule D. But the $10 difference isn't a huge impact eitherway.
          Thank you for the clarification.

          Speaking of miscellanous income, do you happen to know if the checks for
          $13.86 that were issued as payment to music purchasers who chose to file
          claims in the settlement of the Compact Disc Minimum Advertised Price
          Antitrust Litigation counts for taxable income?

          http://www.musiccdsettlement.com/english/default.htm

          Comment


          • #6
            Income Tax and Personal Online Sales


            "Janice" <[email protected]> wrote
            Speaking of miscellanous income, do you happen to know if the checks for $13.86 that were issued as payment to music purchasers who chose to file claims in the settlement of the Compact Disc Minimum Advertised Price Antitrust Litigation counts for taxable income? http://www.musiccdsettlement.com/english/default.htm



            Not having read the article, I would suspect that it represents a refund of
            excess charges or something like that. So, refunds of personal expenses are
            not income. If for some reason, these are refunds of ~business~ purchases
            (you bought the music through the business and deducted the expense), then
            the refund amount is income.



            --
            Paul A. Thomas, CPA
            Athens, Georgia
            taxman at negia.net


            Comment


            • #7
              Income Tax and Personal Online Sales

              In article <[email protected]>, [email protected] says...
              "Janice" <[email protected]> wrote
              Speaking of miscellanous income, do you happen to know if the checks for $13.86 that were issued as payment to music purchasers who chose to file claims in the settlement of the Compact Disc Minimum Advertised Price Antitrust Litigation counts for taxable income?
              Not having read the article, I would suspect that it represents a refund ofexcess charges or something like that.
              Yep.
              So, refunds of personal expenses arenot income. If for some reason, these are refunds of ~business~ purchases(you bought the music through the business and deducted the expense), thenthe refund amount is income.
              Makes sense. I'll think of it as a rebate then. Thank you for your
              help.

              Comment

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