How much we can sell to be in safe zone?

[land1435]

Experts,

Need your thoughts on this. I might start selling some personal movie collections soon and wanted to find out what is the max safe selling money we can make before going to tax, etc.? I mean when exactly should we declare in tax as income and what is the max safe limit?

thanks in advance

[ilikehockeyjerseys]

Speak to an actual accountant. I'll tell you what I know for myself, but it's not professional accounting advice. I might be very wrong about some of it....

There are two different kinds of taxes. Personal income tax, and HST.

If this is business activity, and there is a reasonable expectation of profit - you do not have to register for HST until you gross 30,000 in revenue over a 4 straight quarters. (That is an oversimplification, the rules are a bit more complex).

If you sell almost entire to the US, it is advisable to register for HST because you will get a refund on the HST you pay on taxable supplies for your business. Basically, you pay $13 on HST for business supplies, you government gives it back to you. (Again, oversimplification....see a real accountant).

If you are conducting business, even if you aren't eligible to collect HST, you still have to keep records and claim your business income on your personal taxes.

My guess would be that if you are selling your personal collection, it wouldn't be considered business activity that is taxable since there isn't a reasonable expectation of profit. If you're selling DVDs you've bought for the purpose of making a profit, you'd have to keep track of your activities and claim the income on your taxes.

Good luck.

[recped]

If these are personal items that you bought for your own personal use at some time in the past AND the value of each item is less than $1000 (or maybe it's $500) then you have nothing to report. Even if you did there is a good chance that you are selling for less than the original purchase price (maybe with rare exceptions) so no profit is made, no taxes payable.

The moment you buy something with the intent to resell at a profit you are in business and need to report income which may or may not be taxable.

Just selling off your low value personal possessions is not a business, doesn't require reporting (with the value I mentioned in mind) and won't be subject to income tax.

Don't waste money talking to an accountant, just call CRA for confirmation.

This page has some info, it's a little obscure but basically any personal item has a minimum deemed "cost basis" of $1000, it you sell it for less then there is no capital gain. If you have an item that cost or has a value of $500 and you sold it for $2000 then you would have a capitol gain of $1000 ($2000 - $1000).

If you are talking about a bunch of $10 dvd's then there is nothing to report and nothing to declare and nothing to pay.

[zee-chan-jpn-books]

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@recped wrote:

This page has some info, it's a little obscure but basically any personal item has a minimum deemed "cost basis" of $1000, it you sell it for less then there is no capital gain. If you have an item that cost or has a value of $500 and you sold it for $2000 then you would have a capitol gain of $1000 ($2000 - $1000).

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Why is it not $1500? Isn't it $2000 - $500?

[recped]

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@zee-chan-jpn-books wrote:

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Why is it not $1500? Isn't it $2000 - $500?

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Whoops! I forgot to post the link I referred to.....

https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-re...

I got the idea it would $1000 based on this:

If the adjusted cost base (ACB) of the property is less than $1,000, its ACB is considered to be $1,000.

Fits with the theory that anything with a value below $1000 is not subject to Capitol Gains.