ebay question

At 01:32 PM 11/5/03 -0800, Zane wrote: separate answers, with the primary one being you need to talk to someone that professionally prepares taxes. The other answer, is that this is going to vary from state to state. you don't make a profit it might not be taxable. The problem is that with the IRS you have to PROVE that you didn't make a profit. If they get something from PayPal (or anywhere else) that shows that you sold something for money (note that I didn't say profit!), then you need to have records showing that it's cost and your expenses are equal or greater than the income from the sales or else you owe taxes on it. In addition to the possible taxes you may (will!) also be charged interest AND penalties AND you could even be charged with income tax evasion! The IRS <B> IS </B> monitoring E-bay sales!!!!!!! (Note emphasis on IS.) They may or may not be getting Paypal records but they ARE monitoring E-bay sales via the internet. I know a lawyer that has a client that HAS already been called in by the IRS and asked about his E-bays sales. (Yes he's in DEEP Doo-Doo!) This was several years ago so it's already happening. I've been told that the IRS has a LARGE computer system by the name of Carnivore or some such that's used to monitor all of the E-bay transactions. Hint: I keep records of my travel and expenses (including meals) when I'm out scrounging and my legal deductions are ALWAYS more than what I make off of the stuff that I sell. We can (and do) use that loss to offset our regular 9-5 job income. It normally knocks a couple of k off of our income which translates to $1000 to $1200 less taxes that we have to pay. Joe At least I hope this is the case, as things are almost to the point that my wife can start selling chunks of my collection off, and I'm pretty sure that in the long run I won't make a profit.