I guess my question is why would I have to pay income tax on a hobby that generated no income. If I sold a million dollars worth of cards in a year, but spent two million to obtain those cards, why on earth would I pay tax on it?
Sorry I'm peppering you with questions, but I'm just trying to figure my shite out for this year's return. The effective date for my sole-proprietorship was 10/1/10, so the prior ten months I was not operating as a business. I still had a lot of transactions on ebay in those ten months, but I spent way more than a made. Way more. So how can I be taxed on my hobby if it generated negative income? Everything I've read up until today has indicated that a hobby is only taxable if it is profitable. Is that not the case?
I like turtles.