Hello if im only selling my personal items and am not a business do I need to charge taxes

[walteratk-0]

Hello, I noticed on the E-bay listings there is a section to charge taxes, I am not a business, only selling personal items of mine do I need to charge people taxes ?

Thank you ,

Walter

[pierrelebel · Accepted solution]

No.

When selling used personal items, there is no need to collect and remit tax.

Only GST/HST registered sellers are allowed to collect and remit taxes.

[walteratk-0]

Hi thank you for the information, I forgot to ask you if any of my e-bay profits need to be reported to the CRA if not a business.

Thank you

[pierrelebel · Accepted solution]

If you sell used personal items, you obviously do not make a profit, do you?

As such there is nothing to report.

On the other hand if you were to sell a personal stamp or coin collection (for example)  for much more than you paid, there could be a tax liability.

[walteratk-0 · Accepted solution]

Hello, Thank you, you made alot of sense,

Thank you again, I really appreciate you getting back to me on this,

Kindest Regards,

Walter

[cumos55]

The question of taxation  with respect to the sale of personal property does not occur when something is sold... the buyer is not charged a tax.

For the seller there is a question of a Capital gain.

There are times  when something will be bought  and then sold  at a price higher than the purchase price.

If there is any question one should read what Canada Revenue Agency says in their Capital Gains document.... or contact an accountant familiar with taxation and capital gains

The question of Capital Gains all relates to something called Adjusted Cost Base... the value of an item at the time of the sale.

If the sale of an item of personal property    has a value less than $1000  then there is no capital gain

Example 1.....

One buys a piece of antique furniture   for $500  and then after a period of time it is sells for $750.

There is no taxable capital gain.... because the sale was at a value less than $1000

Example 2.

One buys a piece of artwork for $500.

Then 20 years later the artist dies,  and this artwork sells for $2500

In this situation the Adjusted Cost Base is deemed to be $1000.

Taxable capital gains on the artwork becomes $2500 minus the $1000, with $1500 listed as a capital gain.  This capital gain is taxable

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Example 3.

If the artwork was purchased for $1250  then the capital gain is $2500 minus  $1250, the original cost of the artwork, and a capital gain of $1250, which is taxable.

Example   4....

Buy it for $5,000  and sell it for $3500, and it is a Capital loss of $1500.  This capital loss can be carried forward,  and can be used to reduce the capital gain on another item sold.

A capital loss can only be deducted from a capital gain, and in so doing the total for taxable capital gain is reduced

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The question of Capital gains versus capital loss can be confusing, and may require the assistance of an accountant.

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For the sale of personal property there is no question of taxation with respect to the buyer.

However,  there is always a possibility of taxation as it relates to capital gains versus capital losses, for the seller.

Welcome to the reality of Taxation....