Tax Advice

[acunamatata1]

I've probably sold some $25,000 on eBay this year.

Most of it has been stuff I purchased in 2019 and flipped. Stuff I've pulled and then graded, sealed wax, singles, etc.

What is the best way to claim these on my tax return? And can I write off any of the purchases as "business" expenses? Am I only paying capital gains on it? Really not sure how to go about doing this...

Thanks for any input y'all might have!

[oddstuff]

Originally Posted by acunamatata1

I've probably sold some $25,000 on eBay this year.

Most of it has been stuff I purchased in 2019 and flipped. Stuff I've pulled and then graded, sealed wax, singles, etc.

What is the best way to claim these on my tax return? And can I write off any of the purchases as "business" expenses? Am I only paying capital gains on it? Really not sure how to go about doing this...

Thanks for any input y'all might have!

Probably a good starting point is to do a 2019 download from Paypal and eBay. You will need to breakdown everything you bought and everything you sold. Then gather your invoices from grading fees. You should have a 1099-K from Paypal. Then you probably should see an accountant with all of that.

[kookoox10]

First question, do you operate an ebay store or is this a personal account (list up to 50 items only at a time). If you're operating an ebay store, you will have to download the tax form on your ebay. And the short answer is yes, you can write off your purchases as business expenses. And if applicable, write off mileage to get the product, business lunches, and supply costs associated with operating your store (ie: phone, computer hardware, square footage of your office, etc.)

[ninjacookies]

Asking for tax advice on BO seems like the easiest way to get audited and end up having your Chevy Tahoe impounded.


Highly suggest you consult a tax professional if you're dealing with that kind of yearly volume. You probably should already have a cpa if you don't already. They easily pay for themselves.

[oddstuff]

On this note, curious if anyone out there got a 1099-K from Paypal even though you did not do 200 transactions or surpass $20,000 in gross payment volume for 2019?

[majestik101]

The absolute LAST place I would go to for tax advice would be a sports card forum. But that's just me.

[acunamatata1]

Originally Posted by kookoox10

First question, do you operate an ebay store or is this a personal account (list up to 50 items only at a time). If you're operating an ebay store, you will have to download the tax form on your ebay. And the short answer is yes, you can write off your purchases as business expenses. And if applicable, write off mileage to get the product, business lunches, and supply costs associated with operating your store (ie: phone, computer hardware, square footage of your office, etc.)

Just personal, 50 (free) items at a time, no store or anything.

[glen87]

Originally Posted by majestik101

The absolute LAST place I would go to for tax advice would be a sports card forum. But that's just me.

yeah - i do not get it either, but we see this every year


people need to go see a professional when dealing with stuff

[KingInTheNorth]

Originally Posted by majestik101

The absolute LAST place I would go to for tax advice would be a sports card forum. But that's just me.

Originally Posted by glen87

yeah - i do not get it either, but we see this every year


people need to go see a professional when dealing with stuff

Why? He's looking for advice from someone who may have gone through a similar situation. I don't think hes going to take the first bit of info to come his way, but there was some usefull advice given in this thread. Maybe he just wants to get an idea of what hes walking into, before seeing a professional.

[ALBASKETBALL]

I did roughly 15k in sales I'm 2019. Everything is logged in an exce sheetl.

How my tax advisor suggested filing for me:

For now I would leave the business on your Form 1040 as a Schedule C. You report your total profit and take your expenses on that form and it doesn’t require an additional return.

I would consult with an tax advisors. GL

[jhssketchcards]

According to my Tax Pro that I’ve used the past several years, it’s called Hobby Income.
There is a threshold where the income you make requires tax documenting. PayPal has a great end of year report that I use and it shows itemized expenses (fees, shipping - if done through eBay, and other eBay related charges/chargebacks). I use it every year. You can also get an eBay print out if monthly invoices.
Deductions you can claim are various:
- Cost of goods sold (cards or product)
- Shipping materials (mailers, tape, bubble wrap, boxes, labels etc).
- Mileage (this one is tricky because if you go on a lunch break from work and hit Target or another place to buy stuff, you can only claim the mileage from your place of work to the store and back)
You can claim a round trip from home to shows, card shops, stores etc, even if you don’t buy.
- Admissions to shows and membership fees (Yearly subscriptions to price guides, grading service and Blowout)
- Shipping if not done through eBay or PayPal and mileage used to do so
- Food is only deductible if you spend the night.
IRS has a policy that if you can drive the trip in a day, you can’t claim meals UNLESS you are taking an associate out to lunch/dinner. If you spend the night then you can claim meals only for yourself unless your spouse/significant other assists you in your trip
buying cards etc.
- Hotels, parking, tolls etc
- Home Office is tricky too. I’m self employed as a graphic designer so I can claim it. If you have a regular job but this is all Hobby related, then you can’t claim the Home Office deduction. You can however claim internet fees and cell phone charges used in those transactions, if any.
- Storage purchases (boxes, sleeves, bags, cases, shelves etc you use to store stuff.

I suggest anyone who wants, go to your local clerk of court and file a DBA and create a Self employment name so you can claim the Home Office. It’s worth it if you sell 10,000K or more a year annually selling cards and have a regular job.

Now, Hobby Income IS considered taxable at the same rate of self employment. So if you made $25,000K, you owe about 15% or more in tax for that income. If you regularly get a nice refund, they should just offset and you may get less of a return.
Good rule of thumb is to just put a little back each month from sales to help pay it if you want.

Hope that helps!




Sent from my iPhone using Tapatalk

[Shadowsonic2004]

Originally Posted by glen87

yeah - i do not get it either, but we see this every year


people need to go see a professional when dealing with stuff

Could be that it's very possible someone is in a similar situation and willing to say what they know. Or I assume tax advisors have hobbies too, so maybe one is here that might want to help.

[Soxfanguy]

Originally Posted by ninjacookies

Asking for tax advice on BO seems like the easiest way to get audited and end up having your Chevy Tahoe impounded.


Highly suggest you consult a tax professional if you're dealing with that kind of yearly volume. You probably should already have a cpa if you don't already. They easily pay for themselves.

The only good answer

[Soxfanguy]

At least you aren't a sports player

https://www.forbes.com/sites/kurtbad.../#742b17c411e8

[solt0131]

Originally Posted by acunamatata1

I've probably sold some $25,000 on eBay this year.

Most of it has been stuff I purchased in 2019 and flipped. Stuff I've pulled and then graded, sealed wax, singles, etc.

What is the best way to claim these on my tax return? And can I write off any of the purchases as "business" expenses? Am I only paying capital gains on it? Really not sure how to go about doing this...

Thanks for any input y'all might have!

Get your 1099 from your PayPal. If you don't have receipts for all your purchases or a log book, you're going to pay 15.3% of that $25,000.

You file that income on a separate Schedule C and under "nature of business" you put Sports cards on eBay.

[FT35]

Originally Posted by kookoox10

First question, do you operate an ebay store or is this a personal account (list up to 50 items only at a time). If you're operating an ebay store, you will have to download the tax form on your ebay. And the short answer is yes, you can write off your purchases as business expenses. And if applicable, write off mileage to get the product, business lunches, and supply costs associated with operating your store (ie: phone, computer hardware, square footage of your office, etc.)

It goes without saying but should be said anyway...but obviously you can only write-off the costs of purchases that you've sold as expenses. In other words, you can't write-off the cost of inventory that has not sold, but you can write-off the cost of anything once it has sold.

[trogdor]

I'm an accountant so let me know if you have any other questions.

[Shadowsonic2004]

Originally Posted by solt0131

Get your 1099 from your PayPal. If you don't have receipts for all your purchases or a log book, you're going to pay 15.3% of that $25,000.

You file that income on a separate Schedule C and under "nature of business" you put Sports cards on eBay.

He doesn't mention how many sales he had. If didn't have 200 or more sales on paypal he won't get a tax form from paypal. It has to be both 200+ transactions and 20k+ in sales.

[asujbl]

Hobby expenses are not a thing. People are making my brain hurt.

[chezball]

Originally Posted by glen87

yeah - i do not get it either, but we see this every year


people need to go see a professional when dealing with stuff

and some need to see the bold for other issues.

[acunamatata1]

Originally Posted by solt0131

Get your 1099 from your PayPal. If you don't have receipts for all your purchases or a log book, you're going to pay 15.3% of that $25,000.

You file that income on a separate Schedule C and under "nature of business" you put Sports cards on eBay.

Online receipts/invoices from eBay/Walmart/Target count, right?

[CoolG]

Originally Posted by trogdor

I'm an accountant so let me know if you have any other questions.

If doing enough sales. Section 179 is a nice loophole

[glen87]

Originally Posted by Shadowsonic2004

He doesn't mention how many sales he had. If didn't have 200 or more sales on paypal he won't get a tax form from paypal. It has to be both 200+ transactions and 20k+ in sales.

not entirely true - depends on where he lives, which is why i made my previous post.

last year i basically stopped selling on ebay and only did 4 sales for $1,095.91.

i, along with the irs have already received my 1099 for this.

why - i am in vermont

PayPal will track the payment volume of your account(s) to check whether your payment volume exceeds both of these levels in a calendar year:

$20,000 USD in gross payment volume from sales of goods or services in a single calendar year
200 payments for goods or services in the same year*


*Except in Vermont and Massachusetts where the threshold is lower irrespective of the number of transactions.

so if he is in either of these states, he would get one for a single transaction of $600.

[asujbl]

Originally Posted by CoolG

If doing enough sales. Section 179 is a nice loophole

Umm... What?

This makes absolutely no sense

[SaveMeTheGum]

Total Sales
(minus)
Total buy price
equals
Gross Margin
(minus)
All expense
equals
Profit <--- Claim on taxes