Thank you for your patience. We've having some problems with our chat rooms lately.
Since Pay Pal sent you a 1099MISC, for tax
purposes, that makes you self employed, and you would need to file Form 1040 (Schedule C)
to report the $25,000 as income
However, as you stated, you also have expenses. You would have the $ amount you pay Pay Pal, shipping, Ebay fees, etc.
Your largest deduction
by far will be the cost of the goods sold. I understand that you had the items for a while, and you no longer have the receipts. However, think of this as a "glorified garage sale"
Most of the time, you don't get back what you paid for the item. However, sometimes you do get more. I would hope that you would know what items, if any, you received more $ than what you paid the item.
Since you don't have the receipts, you will have to try and re-create your cost basis. (IRS
is really big into lists) I know you won't be 100% sure of how much you paid for something, but you will have to give it your best guess. You would need to list the bigger items separately, and you can group others (for example: tools)
You do not need to mail this list to the IRS. The ONLY reason I'm telling you to make it now (and then keep it with this year's tax return
) is JUST IN CASE you are audited The fact that you made $25,000 on Ebay will not necessarily cause you to have an audit
. Since the still do "spot audits" (meaning random audits) it would be much easier on you if you make that list now so that you have it.
Again, thank you for your patience, and please feel free to ask any follow up questions you may have.
I truly hope this information is helpful but please do not rate until you are satisfied. If you want to click on 1 or 2 just click on the continue to work with me button instead. You will then be able to add any other info or respond to what I have posted so far. Rating 3-5 gives me credit and a good rating but you can still converse with me.