Tax Tips – E-Business & E-Commerce |
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Online Garage Sales
If your online sales are the Internet equivalent of an occasional garage or yard sale, you generally do not have to report the sales if you did not receive more than you originally paid for the item you sold. In a garage sale, you generally sell household items you purchased over the years and used personally. If you paid more for the items than you sell them for, the sales are not reportable. Losses on personal use property are not deductible, either.
Home-Based Online Businesses
If your online garage sale turned into a business and/or you have recurring sales and are purchasing items for resale with the intention of making a profit; you may have started an online business.
Online Sales Trade or Business
If you are operating a viable online business you may be entitled to deduct business expenses. Do you have an established business and you are augmenting your sales with online sales? Then, remember to include the online sales in your business income. View an IRS video on Business Income.
Online Sales of Appreciated Assets
Examples of appreciated assets often include art, antiques and collectibles. If you have online sales of property where the sales price is more than your cost or adjusted basis, you usually will have a reportable gain. These gains may be business income or capital gains.
Online Sales of Depreciated Business Assets
If you sell business assets or close your business you may have capital gains, ordinary gains and depreciation recapture to report. An example is the sale of an automobile used for business.
For tax information if you sell or close your online business view the IRS video entitled Closing a Business.
Don’t Be A VICTIM OF A TAX SCHEME!
Some promoters are targeting home-based businesses, including online auction sellers, for abusive tax schemes.
References/Related Topics
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Page Last Reviewed or Updated: December 09, 2011
