IRS and eBay/Paypal is too greedy

[masimo]

I feel like the IRS and eBay/Paypal are too greedy. Selling on eBay should not be taxed because it is a secondary market where people already paid taxes when they first bought the item.

[aspkin]

The IRS will tax you at EVERY opportunity.. get used to it. :/

[jeffweico]

You owe taxes when you make a profit on an item you purchase, regardless of whether it is new or used. So, if you bought an old comic book for $100 fifteen years ago and sold it for $1,000 today, you would owe taxes on $900.

If you bought a laptop 5 years ago for $1,200 and sold it as used on eBay for $200, you would not owe taxes on it. But, if you bought a bunch of old laptops for $100 each and sold them for $200 each, then taxes are due on the profits from your sales.

Aspkin is absolutely correct. The IRS WILL tax you at every opportunity. There was even one poor guy, a baseball fan, who was lucky enough to catch a ball during an important game. He wanted to keep it, it was like a dream for him to have that ball. But then the IRS got involved and told him they had estimated the market value of the ball at something like $100,000 and if he wanted to keep the ball, he would have to pay taxes on it - even though he did not want to sell it.

In fact, did you know that if you default on a debt and it is written off, you may owe taxes on that amount? Let's say you stop paying your $6,000 MasterCard bill. The credit card company, after a certain period of time, writes off the $6,000 as a loss. You get a few calls from a collection agency and tell them to go to hell. Then one day, you get a tax bill from the IRS for the taxes due on the $6,000. It makes no difference that you had to stop paying your bills because you lost your job and were trying to pay your medical bills. Nice, huh?

[rsot]

Originally Posted by masimo

I feel like the IRS and eBay/Paypal are too greedy. Selling on eBay should not be taxed because it is a secondary market where people already paid taxes when they first bought the item.

There's where you get your tax accountant involved...

[GreenBean]

Originally Posted by masimo

I feel like the IRS and eBay/Paypal are too greedy. Selling on eBay should not be taxed because it is a secondary market where people already paid taxes when they first bought the item.

Haha.

Life is taxes.

Get used to life.

[rsot]

[vogeltron]

Its a curse as well as a blessing. Those who can learn to overcome. They have larger market share than ever before on eBay. I agree the loopholes you have to go through is insane now on stealth compared to 2008 when I started. But there are two sides to every story.

The products I sell now I had hundreds of competitors. Now it is for the most part it is really less than 10.

[GreenBean]

Originally Posted by vogeltron

Its a curse as well as a blessing.

Those who prevail have much more opportunity than years before.

Seriously, it is a part of life.

The strong adapt and survive.

Is that comic book example correct?

Surely you could pass it off as for personal use. Or are the rules different in the US?

I'd be pretty annoyed if I was taxed on my personal items I sold.

[jeffweico]

Originally Posted by just_smile

Is that comic book example correct?

Surely you could pass it off as for personal use. Or are the rules different in the US?

I'd be pretty annoyed if I was taxed on my personal items I sold.

It makes no difference if an item was purchased for personal use or business use, or whether it is owned by an individual or a business. If you make a profit selling something you bought, you owe taxes on your profits. At least, that is how it works here in the US. I don't know about the UK.

Many people sell items and realize a profit and don't pay taxes because they don't realize taxes are due. And unless the sale is large, the IRS usually does not receive a report of it. But that does not mean the taxes are not owed. If the IRS catches something like this, they will usually assume it was an honest mistake and you just have to pay the tax bill and maybe a penalty. But if they think you were intentionally failing to report the income, then you have a big problem.

[JamesNorth101]

D0 you need to pay tax in the UK

'If you are just selling some unwanted items that have been lying around in the attic, the answer is probably no.

In order to pay tax on the goods you sell, you either have to be trading or make a capital gain. If you are trading you will be self-employed.

You are not trading if you sell occasional, unwanted personal items through internet auctions or classified advertisements or attend a car boot sale once a year to sell unwanted household items'

From HMRC.

[rsot]

Taxes are always levied - even on gains and on losses...just have to manage it