Danvil "i am removing my power seller status right now."
???
To what purpose?
Your legal responsibility to declare your business income (and pay your income tax like everyone else) has nothing to do with your PowerSeller icon. .
???
To what purpose?
Your legal responsibility to declare your business income (and pay your income tax like everyone else) has nothing to do with your PowerSeller icon. .
Frank you need to use the "src img" tag for your signature!
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"Has CRA had any training in how the whole eBay thing works ?"
They may have got some training from me! 😞
When my 2004 and 2005 GST/HST and income tax returns were audited last year, the auditor explained they had little knowledge about eBay/PayPal. They were looking for an education which explained why so much time was spent on my audit (it lasted six months).
When asked why so much time was spent on that file with little chance of re-assessment, the auditor explained it was a learning experience for herself and her local manager.
On the other hand, from an income tax point-of-view, the point of sale (eBay, other online venue or brick and mortar store) does not really change how the bookkeeping must be done, how files must be maintained and available when requested.
From an tax audit viewpoint, they are trying to find where money could have gone missing and unreported. They were concerned with the ability to withdraw from PayPal without reporting. After having gone through every single PayPal transactions in my account for several months, they have a better understanding of the system.
The basics are always the same: a merchant adds his sales, substract his cost of goods and business related expenses and report the net profit (sales minus cost minus expenses) as a business income on his tax return.
Ar the end of the day, a taxpayer better not try to file yearly net income of only $20,000 when spending $40,000 a year after year to live on. .
They may have got some training from me! 😞
When my 2004 and 2005 GST/HST and income tax returns were audited last year, the auditor explained they had little knowledge about eBay/PayPal. They were looking for an education which explained why so much time was spent on my audit (it lasted six months).
When asked why so much time was spent on that file with little chance of re-assessment, the auditor explained it was a learning experience for herself and her local manager.
On the other hand, from an income tax point-of-view, the point of sale (eBay, other online venue or brick and mortar store) does not really change how the bookkeeping must be done, how files must be maintained and available when requested.
From an tax audit viewpoint, they are trying to find where money could have gone missing and unreported. They were concerned with the ability to withdraw from PayPal without reporting. After having gone through every single PayPal transactions in my account for several months, they have a better understanding of the system.
The basics are always the same: a merchant adds his sales, substract his cost of goods and business related expenses and report the net profit (sales minus cost minus expenses) as a business income on his tax return.
Ar the end of the day, a taxpayer better not try to file yearly net income of only $20,000 when spending $40,000 a year after year to live on. .
"At the end of the day, a taxpayer better not try to file yearly net income of only $20,000 when spending $40,000 a year after year to live on."
I can think of many examples where declared income is far less than living expenses.
Just look to many seniors living on a fixed income, and drawing on their savings to survive."
That was obviously written in the context of an eBay PowerSeller, as reported by eBay to CRA.
While there may be valid explanation why one's expenses exceed income year after year, do not be surprised if CRA ask how you do it? ;-) .
I can think of many examples where declared income is far less than living expenses.
Just look to many seniors living on a fixed income, and drawing on their savings to survive."
That was obviously written in the context of an eBay PowerSeller, as reported by eBay to CRA.
While there may be valid explanation why one's expenses exceed income year after year, do not be surprised if CRA ask how you do it? ;-) .
Another question: how can CRA track ones spendings?
Things CRA can easily find out.....
Properties you own(ed)
Vehicles you own(ed)
Things you bought via debit/credit/cheque.
That Van Gogh hanging over your desk....the one the auditor is using.
Unless you work strictly with cash you have no doubt left a pretty good paper trail.
As for foreign assets/income, again unless all transaction were done with cash (or equivalent) there is usually a paper trail.
Things CRA can easily find out.....
Properties you own(ed)
Vehicles you own(ed)
Things you bought via debit/credit/cheque.
That Van Gogh hanging over your desk....the one the auditor is using.
Unless you work strictly with cash you have no doubt left a pretty good paper trail.
As for foreign assets/income, again unless all transaction were done with cash (or equivalent) there is usually a paper trail.
"The total value of transaction is more often than not, less than $1000 per month."
????
That assumption does NOT make sense. While there may be a few sellers who qualify for PS with less than $1,000 monthly sales, they would unquestionably be the exception. .
????
That assumption does NOT make sense. While there may be a few sellers who qualify for PS with less than $1,000 monthly sales, they would unquestionably be the exception. .
