View Single Post
Old 01-27-2011, 07:37 PM   #34 (permalink)
Join Date: Nov 2009
Location: California
Posts: 4,374

Originally Posted by raiderguy10 View Post
You are also missing a big piece. You have to report your GAIN on a sale not your gross income. If you have $2,000 invested and you sell for $1,000 you don't have a gain. Your adjusted basis is the amount you have invested in an item. Anything you sell above your basis is the gain a is subject to taxation. If you don't sell anything for more than you are invested you don't have a gain and aren't subject to tax. Don't get your basis and your expenses confused. They aren't the same.
This is what I was getting at. I just have a hard time explaining things sometimes.

I'm an MBA, not an English major. Words are hard sometimes.

My actual figures for 1/10-10/10 are approx $27,000 spent (that I have receipts for) and $22,000 made, so that's a loss of $5,000. I wasn't going to report that at all since I figured I couldn't claim a "hobby" loss. But I'm worried that the IRS will ask for justification if they notice all of that money coming in to my bank account via paypal.

Thanks for the help.
I like turtles.
kajshack is online now   Reply With Quote