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Phillips Esq.
Phillips Esq., Attorney-at-Law
Category: Business Law
Satisfied Customers: 17883
Experience:  B.A.; M.B.A.; J.D.
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Hi I have an ebay business. Two questions: One, If I sell

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Hi I have an ebay business. Two questions: One, If I sell personal items in my store do I deduct the ebay and paypal fee associated with them from my total ebay fees? Second...if I file as a hobby do I report all income and then claim the ebay fees, paypal fees, shipping, cost of goods sold on a schedule A or do I deduct those costs, first and then report the profit as income?
Hello: This is PhillipsEsq. I am a licensed Attorney and I will be assisting you today.


Hi I have an ebay business. Two questions: One, If I sell personal items in my store do I deduct the ebay and paypal fee associated with them from my total ebay fees?


Response 1:
Yes, because those expenses are not business expenses.


Second...if I file as a hobby do I report all income and then claim the ebay fees, paypal fees, shipping, cost of goods sold on a schedule A or do I deduct those costs, first and then report the profit as income?



Response 2
: The earlier. You need to report everything and then take your deductions.

Customer: replied 3 years ago.

ok One more question, so sorry. The personal items sold. I claim whichever is less, the price I paid or the price the item sold for in my cost of goods sold....correct? The other question.....I included a few personal items in a $300 retail value wholesale lot. I believe it sold for $65. I was going to divide 65/300 then multiply it by the original retail value to come up with cost the item sold for. Some the items were close to retail price and I know the IRS won't be happy if I claim the full price I paid. the reason I did this is because we were getting ready to move and I was clearing things out. Now that I look back, it wasn't such a great idea. I can just leave those items out of my inventory and not claim them.

ok One more question, so sorry.


Response 1
: There is no need for an apology. I am here to assist.



The personal items sold. I claim whichever is less, the price I paid or the price the item sold for in my cost of goods sold....correct?




Response 2
: Correct.



The other question.....I included a few personal items in a $300 retail value wholesale lot. I believe it sold for $65. I was going to divide 65/300 then multiply it by the original retail value to come up with cost the item sold for. Some the items were close to retail price and I know the IRS won't be happy if I claim the full price I paid. the reason I did this is because we were getting ready to move and I was clearing things out. Now that I look back, it wasn't such a great idea. I can just leave those items out of my inventory and not claim them.




Response 3: You may be better off leaving them off completely to avoid any headaches with IRS.

Customer: replied 3 years ago.

Thank you. I kind of figured that. Plus my sales weren't so great. If I included them at the price I paid, it may mean claiming a loss. I don't want to do that. I've been filing on schedule C.

Okay then.

Have a great evening!

Phillips Esq. and 3 other Business Law Specialists are ready to help you

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