CRA coming after us

[aramatic]

I guess that's it for my hobby, which is buying and selling vintage computers and calculators. I acquire items out of curiosity, keep some, and pass on the rest. My aim isn't to make a profit but to break even. I certainly exceed the 30 items/$2800 limit but I probably spend about as much as I earn, not that the CRA is interested in that. So when I pack it in on eBay I lose, sellers lose, eBay loses its fees, and the government loses PST and GST.

[ecgt]

Not sure if you are trying to garner sympathy, vent or are looking for advice here. Nevertheless, you are selling almost an item per day and have sold more than 5100 items lifetime on eBay. What you are doing is not a hobby and is clearly a business.

You should contact an accountant.

[aramatic]

I was merely stating a fact. It is not a business, but thanks for your wisdom and sympathetic advice.

[ilikehockeyjerseys]

If you enjoy what you do, consider seeking the advice of an accountant in order to see if what you're selling falls under personal use property, and what kind of documentation you would have to keep to support that. If you're being honest about not turning a profit, it is possible that you aren't engaging in business activities, but you would still be responsible for maintaining documentation and evidence to support that. The best route would be to have an accoutant look at your situation and tell you what they think. Whether it is personal use or business, they can then tell you how to properly document your activities.

It's fairly normal for people in hobbies to constantly buy and sell, and not necessarily do so to make a profit. But it is also common for people to use their knowledge of the hobby to operate what would qualify as business activities, like buying up a collection they know is underpriced, keeping a piece for themselves, and then selling off the rest at a profit. So even know you don't perceive yourself to be running a business, it is possible that your hobby activities could be something with a reasonable expectation of profit.

Talk to an accountant. I'm not an accountant. This is not accounting advice, etc.

[ilikehockeyjerseys]

Business activities vs business. That is where you might encounter some difficulties. 

It has been super common over the last few decades for people in hobbies to flip things, resell, etc - then they take that profit and use it to support their hobby. They aren't registered as a business. They aren't presenting themselves as a retailer. The money they make goes right back into their hobby, so they don't perceive it as business activities. The reality is, the CRA might disagree. 

As in, you buy a lot of 10 hobby items for $1000. Keep three for yourself. Sell the other seven and walk away with $1000 after eBay fees. If you ask most average people, they would say you are not running a business, but a tax authority may perceive that as you engaging in business activities. Especially if you sold the items right after acquiring them. That's just an example of where the disconnect might come from.

Again, I am not an accountant and this is not accounting advice. If reselling is a big way you support your hobby, it might be worth the short term expense of speaking with an accountant to get everything sorted out so that you can continue your activities. 

[aramatic]

Thanks for sensible advice. I think it's probably best to wind down. I don't need the hassle and expense of records and accountants. I've no doubt been naive in thinking that my activity is just a hobby because I don't indulge in it to make a profit.

[recped]

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@aramatic wrote:

I was merely stating a fact. It is not a business, but thanks for your wisdom and sympathetic advice.

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Do you really think a CRA auditor is really going to fall for this claim?

buying and selling vintage computers

this is the very definition of a business

FYI - If you are making no profit then your tax liability would be ZERO DOLLARS.

[brettjet38]

5.1K items sold

3518 Feedback received

You are earning money on those sales, otherwise you would not be on eBay.

Also, when you do your 2024 Taxes make sure to include all your sales retroactive to Jan 1 2024, the CRA will be getting all that info for this years tax returns.

And, if you do not provide your SIN you may get a fine of $500 form the CRA all the links to the source and details are below...

 https://community.ebay.ca/t5/Seller-Central/SIN-GIG-economy-and-On-line-Sales-in-2024-new-legislatio...

[aramatic]

I don't expect the CRA to fall for anything. Nor do I expect anyone to try and guess my motive in posting this, as ecgt did. I'm grateful to those who have sensible things to say. The snippy comments I can do without.

[biglittleape]

No one likes it but taxes are a part of life.  Government is slowly closing all the online loopholes.

If you are making a profit than legally it must be reported to the gov and with managed payments there's a electronic "paper trail" right into your bank account.

[marnotom!]

When my wife and I started selling on eBay in the late 1990s, before there was an eBay Canada, before eBay started handling sellers’ data the way it does now, we were advised by a friend who’s a financial planner that anything we earned on eBay was considered income and should be reported on our income tax.

My take on this, and it may not be correct (cue the “I’m not an accountant” boilerplate) is that you may sell for a hobby under your own steam, but once you involve a business in your operation, your hobby becomes a business, too.

My wife and I haven’t sold on eBay for a while, but my sense is that the regulations for sellers don’t appear to have changed that much over the years; it’s the regulations for eBay that have changed.