Skip navigation.
Get & Give Tax Help for Small Businesses

Tax Implications of those E-Bay Auctions

The IRS added a new article to its website, to help those of us who emptied out the garage or storeroom by selling unwanted items on E-Bay or other online auctions. The article outlines the required tax reporting on those sales.

Generally, if you sold personal items for less than you actually paid for it, then you don't have to do anything. :)

But if you sold personal items that appreciated in value have to report any gain. If it's art, antiques or other collectibles you pay the 28% tax rate. Otherwise you'll pay the normal capital gains rates.

If you sold business property the rules are a little different. If the item was previously depreciated and you received more than your adjusted basis in the property then all or part of the gain is reported as ordinary income. See IRS Publication 544, Sales and Other Dispositions of Assets, Chapter 3, for more information. But if you sold the property for less than your adjusted basis, your business gets to include the loss.

If you run an visible online auction seller business you have to report your income and expenses as any other business does. See the IRS Small Business Portal for more information on running your business.

The IRS also warns of several tax-abuse schemes promoted toward home-based businesses including online auction sellers. Some of these are outlined in IRS publication 4035, Is It Too Good To Be True? Home-Based Business Tax Avoidance Schemes. The IRS is very serious about these, so don't even try them.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.

Management expects the

Management expects the Marketplaces division to grow slower than the market in 2009, with the market in 2010 and outpace the market in 2011. EBAY expects to bring large scale changes to its Marketplaces division that will take time to implement. The company is attempting to improve its user experience by expanding efforts to include more liquidation/out-of-season products and by overhauling its search function to bring more relevant searches to the forefront (highlighting inventory from across the EBAY ecosystem). Even if we assume they can execute on this strategy and stabilize the marketplace, it will take time and guidance does not imply real growth until 2011. We continue to remain cautious on management’s ability to execute and expect the stock to reflect more near-term execution than promises the company makes about 2011.

Thanks. Nice article

Thanks. Nice article

Selling stuff online? Here comes the IRS

CNet just posted a story today about this.

Americans who sell items through Internet auction sites could be in for an unpleasant surprise at tax time next year, thanks to an IRS proposal designed to identify taxpayers who don't report income from those sales

The U.S. Treasury Department wants Congress to force auction sites like eBay, and to turn over the identities and Social Security numbers of a large portion of their users to the IRS--so tax collectors know how much each person made through online selling.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.