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 03:23:28 GMT
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Viewed:
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1382 times
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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 drive the car to get you to the store to buy
the item, etc. the computer you bought to browse the internet and sell your
items over the internet MAY be deductible too.
so you might not have any profits at all if you take full advantage of the
tax laws of running a business. It's best to talk with a GOOD account or
two to see what they tell you, because someone from the IRS is sure to tell
you that it's taxable income and that you better claim it, but not tell you
that you are also entitled to write off your business expenses too!
Ray
----- Original Message -----
From: "Alan Demlow" <demlow@lightlink.com>
To: <lugnet.market.brickshops@lugnet.com>
Sent: Tuesday, April 08, 2003 7:31 PM
Subject: Re: Brickshops and Taxes???
> 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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| (...) Sure, I mean I can write off all kinds of stuff. But what does money earned from something like this qualify as? Capital gains? Wages and tips? Other income on Schedule SE? I guess, I'd like to hear how other people are handling this. If you (...) (21 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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| 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 (...) (21 years ago, 9-Apr-03, to lugnet.market.brickshops)
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