Income tax and Ebay

[maat55]

Until you profit over 600 dollars, do you need to report your earnings on ebay?

[MonkeyMama]

The IRS pretty much always taxes the gain and never allows the loss. I mean seriously, just how a lot of the tax code is.

If you sold your personal car at a gain you would have to report the gain. BUT since cars depreciate, you never get to take the loss when you sell. So, few people even realize that if they had a gain it would be taxable.

If you sold your house for a loss you would never get to report a loss.

Even if you have stock losses the most you can claim every year is $3k/year loss. (At least you can offset your gains here).

For passive real estate investments your losses are also limited. You can take the loss when you sell though. (IF you have enough gain to offset anyway).

If you continually show a loss on your schedule C you will most certainly be audited. If labeled a "hobby" by the IRS, then losses would be disallowed. This is actually the #1 audit we see. If your business is going down the tubes they reason the only reason you would stay in is because it is a hobby. (You know, you wouldn't stay in a job that didn't pay, etc.)

OF course if you make any money from any of these endeavors you owe the taxes.

Isn't the tax code nice???

[disneysteve]

Until you profit over 600 dollars, do you need to report your earnings on ebay?

That $600 threshold is so misunderstood.

ALL income is reportable. If you earn less than $600 from an employer, the employer isn't obligated to send you a 1099 or W-2 but you still have to report the income.