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Old 01-27-2011, 07:37 PM   #34 (permalink)
Join Date: Nov 2009
Location: California
Posts: 4,421

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.
kajshack is offline   Reply With Quote