[terry1156]

Patti,

First of all, welcome

Originally Posted by abbylu

I plan to begin selling on ebay this year. I am keeping a record of all expenses incurred as I go along. But I have many items to sell for which I have no receipts (I wasn't planning to become an ebay seller at the time of purchase). Can I still take a deduction for the cost of such items and if so, how do I determine the amount to deduct if I don't remember how much I paid? Can I deduct them if I didn't buy them in 2004?

Yes, you can deduct them. If they are still new, go and see what the price is for them and mark that price down (even better if you can get an advertisement of their price). If they are used or in not new condition, use the fair market value. You can use the prices that you would get for giving them to charity - if you make your prices reasonable and are not trying to cheat, then there shouldn't be a problem. I buy stuff at garage sales and flea markets and there are no receipts there, so I keep track by writing them in a book.

Originally Posted by abbylu

My next question is about deducting the expenses incurred in producing handmade items to sell. Can I deduct the cost of supplies before I actually have any income?

Yes, you can deduct them against any earnings even if they are from different stuff you sold. You can deduct them the year you buy it.

Originally Posted by abbylu

And my last question is about depreciating my computer. It wasn't purchased for business use, but has now been (obviously) placed into service for my business. I bought it 3-4 years ago. Can I use it as a deduction (and how?).

Thanks,
Patti

If you are using it EXCLUSIVELY for your business, you can deduct the fair market value now that you are using it. Of course, a 4 year old computer is worth much less than what you paid for it.

Don't forget to deduct all the things you can for a home business including utilities, mortgage, improvements, ect. You can read about that <A HREF="http://www.savingadvice.com/forums/showthread.php?t=41">here</A>