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Old 03-02-2011, 02:51 PM   #86 (permalink)
Join Date: Feb 2011
Posts: 13

You aren't going to sell $20,000 worth of "household goods" throughout the year. Let's be realistic. 99 Times out of 100, if you have $20,000 in sales it's not personal property; you'd be a business.

Personal property is not taxable. If I sell my clothes, there is no tax associated with that sale.
Thanks for clarifying, but its highly probable that anyone with a professional income will have $20,000+ worth of goods that can be sold sitting in the house. So essentially you are saying, as long as its a one time thing on a single return (not multi year) a person can file the proceeds of the sale on a schedule C as "personal property" without any recipts or proof of such? As was stated in the first example I posted, I could sell a spare car, a treadmill and other sporting equipment like bikes etc and easily hit the $20,000+ mark. I am sure you could too.

The burden of proof is on your to show it's a business, not a hobby and not on the IRS. You have to prove your MAIN REASON is to make $, and that you don't get too much personal enjoyment on the side.
How would one go about doing that? In my experience dog breeders run into this all the time. They have an EIN, paperwork, noted expenses, recipts, etc and IRS says "no write off, this is a hobby". Seems to me the IRS would skew this in thier favor during an audit and say most of the time that ebay is a hobby, so no deductions. My guess would be that infrequent, high dolar ebay sellers are in the same boat as high dollar, infrequent dog breeders.

Plus, you didn't address the State vs Federal issue with losses, where one entity says, yes you can deduct losses, yet the other says, no you can't decuct.

Last edited by momosgarage; 03-02-2011 at 02:53 PM.
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