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MY TAX LIABILITY? I GOT IT ON E-BAY!

October 02, 2007

The IRS has issued a new "fact sheet" to remind those who make their living in the e-Bay economy that their earnings are, in fact, taxable:

All income from auctions, traditional or online, and consignment sales is generally taxable unless certain exceptions are met. This income is usually considered either “business” or “ordinary” income. In certain circumstances such income can qualify for capital gain treatment. There are also some exceptions where income can be excluded from taxable income.

Business income resulting from an auction or consignment sale is subject to the same taxes as the income of any other retail or service business. That may include income tax, self-employment tax, employment tax, or excise tax. A retail or service business owner must include this income in his or her business income.

The fact sheet also touches on deductibility of auction expenses and the hobby loss limits.

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