Subject:
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Re: Brickshops and Taxes???
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Newsgroups:
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lugnet.market.brickshops
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Date:
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Wed, 9 Apr 2003 02:31:08 GMT
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Viewed:
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1413 times
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I'm no tax expert, so take my advice with a grain of salt, but I believe
Lego profits are taxable as capital gains if you don't treat your brickshop
as a business (and I called the IRS to confirm this when I had the exact
same question a few years ago, though with their track record...). The
reasoning, as I understand it, is that Lego you acquire for personal (hobby)
use which is later sold for a profit is considered an investment by the
IRS--as is anything else you acquire for personal use and later sell. Of
course, most stuff you acquire for personal use and sell later (e.g., at a
garage sale) is sold at a loss, which means you don't have to pay taxes on
the sale or declare it in any way. But technically if you bought a shirt
for $5 and sold it for $10 at a garage sale after wearing it a few times
you'd owe capital gains tax on it, if I understand correctly! I'm not sure
where the line is drawn between "business" and "items bought for personal
use and later sold at a profit"--that you'd have to ask an accountant about.
Alan
In lugnet.market.brickshops, Paul Sinasohn writes:
> In lugnet.market.brickshops, Sun Yun writes:
> > So I've been working on my taxes to Uncle Sam at the last minute and I'm a
> > bit puzzled on what to do with Bricklink and Ebay profits.
> >
> > How is everyone fililng these funds? As what? Under what category?
> >
> > I am completely lost but I'd like to do this right.
> >
> > Any help or advice would be greatly appreciated.
> >
> > sun
>
> Are you treating your Lego sales like a business? You would do that on
> Schedule C, listing all your expenses and revenues.
>
> Otherwise, it's non-taxable money, just as the profit from a garage sale
> would be.
>
> In other words, don't tell Uncle Sam.
>
> Paul Sinasohn
> Former CPA staff person
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Message has 1 Reply:
 | | Re: Brickshops and Taxes???
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| they key word there is "profits" and that does not mean that if you buy something for $1 and sell it for $2, you made $1 in profit....the rules of accounting allow you to deduct a lot of stuff if you are running a business....such as the gas to (...) (22 years ago, 9-Apr-03, to lugnet.market.brickshops)
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Message is in Reply To:
| | Re: Brickshops and Taxes???
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| (...) Are you treating your Lego sales like a business? You would do that on Schedule C, listing all your expenses and revenues. Otherwise, it's non-taxable money, just as the profit from a garage sale would be. In other words, don't tell Uncle Sam. (...) (22 years ago, 9-Apr-03, to lugnet.market.brickshops)
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