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Based upon what you describe, it doesn't appear that you have anything to report.
Thanks Stephen! Sorry for not getting back sooner, I was in a car accident months ago and my back flared up. My last two questions are these:
1. I purchased the master sculpts to a sci-fi model, which in turn was to be replicated and sold. Its a hobby and I wasn't expecting to profit from the kits produced from the masters, just hoping to break even. I farmed out the production of the kit and after those costs I average $25 a kit. I've sold so far 30 kits .... only receiving about $750 in "profit" ... the master sculpts costed approx $3,600 . Meaning I still have about $2,900 more to go before breaking even with the cost of the purchase price of the sculpt. I just wanted to make sure at what point do I start reporting it as profit? I was thinking it was the same or similiar to me selling my items on ebay.
2. Once I reach a settlement for lost wages and pain and suffering with the insurance company, what portion is reported for tax? there is lost wages begining sep 09 and into april 2010 at the very least. i have been told a settlement is not taxed and someone else has said only the lost wages is taxed. Thanks for your patience!