tax return with ebay income by selling my own collection

[e.j.kim]

Hi,

I hope I can get some answers from here regarding to my tax return. I’m a taxnoob. This is the first time filing tax return with ebay income. I've only done with the slips I received from the employers in the past. I'm using a tax software right now and I'm looking at T2125. This seems to be only form that I need to work on.

First, in the identification, Have I input correct answers on these?
What's your main product or service? Selling used DVDs on ebay
Industry code? 418990 – All other merchant wholesalers

I'm a hobby seller who doesn't charge tax on the listings and what I'm selling is my own collection - mainly used DVDs. Since I haven't made much money, I was hoping to make it pretty simple.
Total sale - $10,000
shipping cost - $3,000
ebay and paypal fee - $1,500
Shipping materials (envelopes, bubble wraps, and etc) $500,
So, the actual income comes to $5,000.

But then there are some confusing parts because of my situation. First thing is that Cost of goods sold. Again, I’m selling my own collection that I’ve collected over the years. I’m not a retailer, so I have paid full prices. Also I paid much more money than what I’ve sold. Some of them have some values, but DVDs were very expensive in the past. What I’m concerning is that, if I input the actual prices(or at least half prices), then most likely the net income (loss) will be in 2 or 3 digits, or minus. Would CRA be suspicious about this? Also, if net income (loss) becomes lower than 3,000, Is it even worth filing it?
This is how I input in Cost of goods sold
Direct wage costs 8340 - $0
Subcontracts 8360 - $0
Other costs 8450 - $5,000.00

Another thing is that it’s with Do you have inventory? I’ve been maintaining my listings around 300 to 400 with the amount of $50,000 to $70,000 by adding up listings every month. Again, If I input the numbers below, then net income (loss) becomes minus which also seems to be asking for a trouble.

Do you have inventory? Yes
Opening inventory 8300 - 7,000.00
Purchases during the year 8320 - 5,000.00
Closing inventory - 70,000

Could someone please share some lights on my situation? I’m still learning about T2125 at the moment.

If you are going to leave any negative comments by any means, please resist your temptation and move on. I’m very stressed already.

[reallynicestamps]

Pierre was  a real life chartered accountant. So his expertise was based on his training and then on his experience as a retailer both B&M and online.

[pjcdn2005]

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@hold.your.own.media wrote:

Not entirely true. Taken from another post within the eBay community: "You are selling used personal property with no goal to generate a profit.  In such instances, you do NOT need to report sales to CRA unless your worldwide annual sales exceed $30,000 (you need to register for HST/GST) or an item (or group of items) is sold for more than $1,000 (may be subject to capital gain on sale of personal property)."

For myself, I didn't sell any single listing for more than $1,000, but am up to nearly $10k profit from this year's listings.

Also FYI for those approaching $30k: https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/gst-hst-businesses/when-regis.... So in order to start charging for taxes, I thought you would need to incorporate, even if you're selling off personal belongings. If you can just collect the tax once going beyond that point, the report it when doing taxes, that's not too bad as I wouldn't want to incorporate unless I HAD to.

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I am definitely not an accountant or a tax expert but I suspect that you are reading that quote from the 'community' incorrectly. They are saying that if you are not buying for the purpose of selling but are selling off your own items, you don't need to report that income to the CRA UNLESS you have sold $30,000 in 4 consecutive quarters in which case you need to start charging GST/HST.  If you are buying for the purpose of reselling, I think that you have to report that income regardless if your sales were $5000 or $50,000. But please check with an accountant.

Note that  on the link about when to collect GST, they refer to having sales over $30,000 in '4 consecutive calendar quarters'...they don't use the term  calendar year.  So you could have sold $20,000 in 2019 but if you sold $18,000 in the last 6 months of 2019 and $15,000 in the first 6 months of 2020  you would be over the $30,000 in 4 consecutive quarters.

You do not need to incorporate to collect gst or to get a gst (business) number.

[cumos55]

That $30,000 value for registering to collect GST/HST  is ... Sales.... plus.... Postage

[jules7970]

what if the total sales of personal use items exceeds $30k? I'm a canadian resident but have a us registered ebay & paypal account. 

[tyler@ebay]

Hi everyone - due to the length of time elapsed since this thread was begun I have locked it from further replies. If this is still a topic that warrants discussion please don't hesitate to start a new thread!