Selling on eBay - tax questions - Help me understand how this works.

Alright, so here's my question, if I were to inherit a bunch of gold and silver items from a family member and wanted to sell it on eBay, how much can I sell before taxes need to be claimed? If I were to sell an item for $1,000 and the fees came out to $200(eBay and PayPal) would I have to claim $800 profit or would it be the entire $1,000? Do I get to claim a wage for my personal time spent or do thy not care about that? Obviously I can claim the shipping costs and what not, but what other things that go along with selling can I use to help lower the amount of taxes I need to pay?

What type of percentage is required for those of you who sell large amount of items on eBay? 10%, 25%?

state taxes now too?!

I see that it says if you sell more than 200 items or $20,000 you'll be issued a 1099, yet I've been selling for many years and have never had a 1099 although I've never been close to $20,000 in a year.

If I had someone with a large eBay store sell them for me, who would be required to pay taxes on the items? Would we both get hit with the taxes?

I'm just trying to see if selling on eBay will end up being more costly with the taxes and fees as opposed to selling the items locally.

Any information would be greatly appreciated. If you don't wish to post in this thread, feel free to PM me.

 

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sell it local. skip the fees. sell some right here.

 

Free advice almost always turns out to be the most expensive.

 

Not getting a 1099 has nothing to do with the taxes owed. You may owe taxes on most anything you sell.
How much you owe is the hard part to figure. You must be able to prove your cost basis to the IRS.
Good records of how and when the coins came to you are very important.
Good records of sales and cost of sales are just as important.

As Doug said, you need a good accountant to keep out of trouble.
There is just too much involved to get it right on your own.

 

Thanks everyone, I have family that can probably answer some questions about the taxes, but none of them use eBay so I figured I'd try on here first. Thanks!

 

Do like Doug said, it'll keep the taxman from knocking on your door.

.

 

It's crazy trying to understand it all.
Ebay is just the same as selling them in other ways.
You still need the same records on cost basis and cost of sales.
You might want to look up the Hobby Tax laws on the IRS web site.
It's also crazy trying to understand. Wish you the best.

 

Don't be penny wise and pound foolish. Go to an accountant and get things done right.

 

:thumb:

 

This is doubly important as you inherited. And anyway or anywhere you sell income is taxable.

 

I prefer my logic. If I sold $1000 in coins on Ebay I'd have to mail them out. So, because I don't have days off, ever, and can prove it, I have to take a day off to mail said coins. That amounts to about $2500. The way I see it, now the IRS would owe me $1500 in tax credits that I can write off next year. The trick is to get them to go along with that.

 

Who's your accountant Guy? Frank? :devil:

 

Generally speaking

The number of items you sell before taxes become a consideration - 1 item.

The amount you can deduct from the gross sales of the item - the basis (valuation) of the item passed to you from the estate at probate plus any out of pocket expenses incurred in lquidating the item (ebay fees, shipping, etc.). There is no deduction for your personal time.

 

The only thing that really changes by selling on Ebay versus anywhere else is visibility. Technically any gain above your basis and direct costs is taxable wherever you sell an item. Pragmatically, though, who is going to know if you sold an item at a coin show? However, any sale on Ebay you can count on the IRS having a record of it.

So, you need to weigh the odds of where you would receive highest net price with your personal desire for documentation of the sale. Its always a personal choice.

 

When I was selling on eBay, it all seemed fairly straightforward -- I declared the amount I received, minus my costs:

shipping/insurance
PayPal fees
eBay fees
amount I paid for the item (including sales tax and shipping, if any)

It was my understanding that I could claim mileage for taking stuff to the PO, but could not deduct my time. I don't think I ever actually did deduct for mileage.

I did NOT try to go down the path of designating part of my house for business use or anything like that.

I've not yet been audited, so I have no confirmation whether I was doing everything right. I'm certainly not an accountant or lawyer, so while this may sound like advice, it won't get you far in court.

So, if you're asking "how should I account for stuff I sell on eBay", the answer seems to be "the same way you'd account for selling it anywhere else". If you're asking "how much can I sell on eBay without declaring it as income", well, shame on you.

 

no taxes for coins in michigan

 

In a nut shell, the above is correct. To take it further, your cost basis for the inherited items would most like be fair market value (FMV), so in theory, if you sold them fairly soon after inheriting them, so that there was no change in FMV, you would have no gain/income/profit on them.

The best advice is to hire a tax professional.

 

No sales tax on coins in Michigan. You still have to pay state and Federal taxes on your profit, everywhere, forever.