« SBA Is Having Trouble Identifying Industries In Which Women Are Underrepresented | Main | Hope At Home Act Awaits House Approval »

March 28, 2005

IRS to Consider Ebay Sales as Taxable Income

The Associated Press has an interesting article about whether sales on the online auction site Ebay are taxable income to the sellers. The IRS typically applies a list of nine factors that might prove whether a taxpayer's online auctions amount to a business including, evidence that the taxpayer depends on the income, acts in a businesslike manner, or puts enough time and effort into the activity to suggest a profit motive.

One key point to look at according to the article is the seller's intent. If someone is just selling their goods to create space in their house and selling it for less than they paid for it, then the taxpayer is not generating a profit. However, if the taxpayer is generating a profit from the goods sold, then the IRS might challenge it as taxable income.

The advice the article gives is when a taxpayer is not sure whether income from Ebay sales are taxable or not is to contact a tax professional for an opinion.

Posted by Gerry Torres at 06:52 AM in Taxation | Permalink


TrackBack URL for this entry:

Listed below are links to weblogs that reference IRS to Consider Ebay Sales as Taxable Income: