When do I Decide to Call this My Business???? Advice Please.....

[collectors_solution]

Hi everybody, jeec0305 here.....i have been a powerseller for about 6 months now, pretty cool. I have watched a few topics on here, but have never really taken full advantage of its use. It took me a while to start my own topic so here goes...........

I was wondering at what point and time do you consider selling on here (ebay) an actual business? I sell all sorts of 80's Action Gigures and Accessories, mostly GI JOE & Transformers. I seem to do well with what i have, yet do not know WHEN or HOW to get it off the ground to start being able to take advantage of Small Business Offerings.

I have 2 young kids under age 4, that keeps me and my wife very busy. With another on the way, i would love to be able to make her wage on ebay so that she could maybe work part time or be a stay at home Mom. Its just that i have been selling on here for almost 2 years, and have made some decent coin....not like i am going to retire early or anything...lol...But it would be great to get some sort of advice from some other users about this option. At what point and time do i start paying taxes on what i sell?? I buy and then resell on here for a bigger profit. Its fun, and i have met a lot of Fantastic People all over the world. But at what point do i kick it into high gear...or is it better to just leave it the way it is???????????

Somebody, Anybody, Please give the heads up....Cheers Folks....James.T

[tea_past_times]

My tax guy says that according to Canadian Tax Laws you are allowed to hold garage sales and not claim the income from them as taxable income up to a maximum amount. The maximum as far as I know $1000 dollars. So if you had a garage sale and made $999 dollars it's not taxable. If you made $1001, it is. You are allowed 2 garage sales per month. Hold any more, and you are considered a business. The government looks at Ebay as an online Garage sale, which it is, if like myself, you sell used items. I don't think what I've said applies to sellers of new merchandise. So when I asked my Tax guy about claiming Ebay sales, he said to report any earnings I have from Ebay that are over $2000 per month.
You see, if garage sales were taxable, we would all be in trouble, wouldn't we, and how would the government verify your sales anyway? So if your monthly sales on Ebay will far surpass $2000/mnth you should go legal and pay some taxes, if not, don't ruin a good thing. This is just advice I got 4 years ago, I don;t know if the laws are still the same today, please double check this info with YOUR tax guy!! Before you do anything. Hope that helps. - PHIL

[recped]

Another way to look at is this.

If you buy goods with the intent to resell at a profit it is a business. Doesn't matter if you actually make a profit (if you don't you won't have to pay taxes anyway). Also doesn't matter if you sell $100 a year or $1,000,000.
"What else could I do? I had no trade so I became a peddler" - Lazarus Greenberg 1915
- answering Trolls is voluntary, my policy is not to participate.

[katiusciav]

So if you had a garage sale and made $999 dollars it's not taxable. If you made $1001, it is

is this gross sales?...or profit??

[tobyshitzu]

There is no "$2000 limit" or anything close. Garage sales would generally never be taxable as most of them are disposing of personal use property only. The $1000 mentioned seems to be some sort of extreme mix up of the personal property disposal rules
http://www.cra-arc.gc.ca/tax/individuals/topics/income-tax/return/completing/reporting-income/lines101-170/127/completing/personaluse/menu-e.html

No idea where the rest #1 came from but it wasn't from any CRA tax guide. There is certainly no exemption on $2000 per month in business earnings, on ebay or anywhere else.

[collectors_solution]

Yeah, i am only a Bronze powerseller so my sales are over 1000 but have only hit 2000 once in my ebay career....So i should just keep my earnings to myself????? Do you think people that sell XX amount of dollars on here are monitered in any way shape or form? Its just, i sold a little over 13,000 CDN last year...mind you thats not straight profit, after fees and everything else is said and done, maybe came out a litle ahead of the game, OH, and not to mention the few thousand bucks lost to deadbeat sellers!!! OUCH....that really hurts!! I just do not want to be contacted or anything from the ol'Goverment and told that i did not claim this XX amount of money. Maybe i am just paranoid or something, I really appreciate all your replies...Please keep them coming.....jeec0305

[whoscloset]

If you are selling enough to achieve PS status then you better start tracking expenses and income for tax purposes.

If you are doing it from home you can write off tons of stuff and make your net income from ebay practically nil...but claiming it is better than the consequences of not claiming it.

JMHO
Monique

Himalayan Salt Lamps - A Guide to Purchasing

[recped]

Keep in mind that deducting expenses related to your residence "can" have other not so pleasant consequences. Technically this can effect Property Tax rebates and also the Capital Gains exemption of a personal residence.

Some of these issues are best discussed with a competent tax lawyer or accountant.
"What else could I do? I had no trade so I became a peddler" - Lazarus Greenberg 1915
- answering Trolls is voluntary, my policy is not to participate.

[whoscloset]

I would agree with recped on the consultation. A registered accountant can give you the best advise re whether to incorporate or not and what to claim, etc.
Monique

Himalayan Salt Lamps - A Guide to Purchasing

[tobyshitzu]

"Do you think people that sell XX amount of dollars on here are monitered in any way shape or form? I"

At the present time the only one keeping track is you and ebay. If CRA asks for ebay's records they will get them. Australia recently requested and was given ebay selling record for those with gross sales of $50K/year. USA is talking about requesting records at a much lower level. No one knows if, what or when something similar might happen here.

[jakeeangel]

But it will....count on it!

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[jakeeangel]

Some people conduct retail sales through garage sales and those would count as a business. They're not disposing of old personal used goods.

Yes, competent is the key word here!!

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[recped]

Yes, competent is the key word here!!

I said it, you said it and I'll say it again. So many times people have posted here things they "have been told by their accountant" that are so very wrong.

To me there is nothing more impressive than an accountant or lawyer who has the guts to say "actually that's not my area of expertise, I will consult with my associate who is better informed".
"What else could I do? I had no trade so I became a peddler" - Lazarus Greenberg 1915
- answering Trolls is voluntary, my policy is not to participate.

[art-in-the-making]

"Do you think people that sell XX amount of dollars on here are monitered in any way shape or form?"

A couple of days ago we got a spoof email inviting us to join Silver Powersellers. Although we were short a tad for silver, I found the timing and accuracy of this spoof to be a little freaky. We had never received this type of spoof before. Of course I didn't bite for the usual reasons - it came in on email, etc.

So today the real invitation came in on My Messages... only bronze but rising fast I hope!

Anyway, I may be paranoid but I would never assume that anything we do on eBay is safe from being monitored, possibly by people you wouldn't have thought of...

[zarzuella]

Anyway, I may be paranoid but I would never assume that anything we do on eBay is safe from being monitored, possibly by people you wouldn't have thought of...


I dont think you're being paranoid at all! This, for example, is a public forum with probably thousand of 'lurkers' who never post, just read .. yet I still see people posting their sales numbers, or the fact they are selling for profit but not declaring it to CCRA. Tax employees can be powersellers too!

OP, get some good professional advice - in fact, you can even go in to your local CCRA office and get the facts for free, they are not ogres and can be quite helpful.

Ann