Comments on: Are eBay Sellers Required To Pay Income Tax On Sales?

By: Matt

Matt — Wed, 24 Feb 2010 18:18:30 +0000

@johndoe: You didn’t find a loophole at all. All those goods you give him are subject to the gift tax if they exceed $13,000 per year. The gift tax is a tax on the /giver/ not the receiver.

You’re unlikely to get caught but if you were to get caught, just know you aren’t operating in a legal loophole. You /are/ liable for tax.

By: john doe

john doe — Mon, 18 Jan 2010 17:13:24 +0000

i found a nice loophole.

i’ve got a mate that lives somewhere (where taxes don’t apply since it’s so poor there… undisclosed for security reasons)

i send all my goods to him as donations. then he sells them online. he gives me the profits under the table.

i’ve been doing it for years and years. who’s laughing now fat man!!!!? bahahahahahaha

By: gwen

gwen — Fri, 08 Jan 2010 21:06:49 +0000

Thanks very much for this- it is extremely helpful. I have not been sure whether to report my very small income from selling used clothes, but now I feel much more clear on the matter. Thanks!

By: jille

jille — Wed, 06 Jan 2010 16:41:12 +0000

“One day I finally turned to him and asked him if he was reporting his eBay earnings as taxable income on his federal income tax.”

Sounds like his money-making operation was driving you nuts with envy.

By: ian

ian — Wed, 26 Aug 2009 12:59:26 +0000

Do you just collect tax on items you sell in your home state? Or every transaction no matter what?

By: Raymond

Raymond — Sun, 03 May 2009 18:30:52 +0000

Ebay Former Power Seller guy,

I totally feel your pain. I used to run a nice little eBay auction business as well, but the scammers, customer demands, incredible price driven competition, and rising eBay listing fees finally eliminated my profits to the point where it wasn’t worth it anymore. It is still very possible to make a decent living from running an eBay online auction business, but it requires a lot more work than it used to. Competition is indeed super fierce and growing.

But taxes are taxes and unfortunately net eBay profits have to be taxed, at least officially. Of course, whether you actually report your earnings as income is up to you, but just keep in mind that the IRS likely will get better access to the paper trails in coming years with new legislation and improve their crackdowns on eBay sellers who fail to report their earnings. Be careful!

By: EbayFormerPowerSeller

EbayFormerPowerSeller — Sat, 02 May 2009 18:23:39 +0000

Making money through Ebay is tough these days. With all of the get rich quick Ebay infomercials and scams appearing on television like Dave Espino’s, the competition is getting way to stiff for many of us. I used to make a decent side living from my Ebay business but now it’s not doing so well anymore….and Amazon’s taking away much of the business I used to have from online auction based businesses. Now the IRS is trying to tax my net profits…. I know it’s supposedly only fair that net gains be taxed and I’m not trying to be a tax dodger, but how about giving regular folks like me a fighting chance in this economy? Uggghh So frustrated!