Ebay to report income to IRS soon

Well, I don't really sell on Ebay. I sell direct 99.9999% of the time, and through a Japanese Paypal account. Thus, all my income is here, not there. I pay Japanese taxes on it and then report it as foreign earned income to the US. As far as Uncle Sam is concerned, it's income just like anything else, and there's a fairly large foreign income exclusion, although I think paying any taxes in the US is bullshit. If there was NHS in place where I could be guaranteed coverage upon a return, I'd happily pay. As of now, if I get some type of major illness here, I'm retiring here (or moving to Europe).

 

What I find funny about this is that Dog breeding is considered a hobby by the IRS and expenses cannot generally be written off. Why? Beacuse the IRS uses the following test:

If you made a profit during at least 3 of the last 5 years you likely will satisfy the profit-motive test. If you haven't filed 5 tax returns as a business, the IRS will apply a subjective tests:

-Whether you carry on the activity in a businesslike manner - keeping good books and records, promoting your business and holding down costs where possible.

-How much time and effort you devote to this activity.

-Whether you depend on income from the activity for your livelihood.

-If your losses are due to circumstances beyond your control or are normal for a business in its startup phase.

-Whether you change your methods of operation in an attempt to improve profitability.

-The knowledge and background you have in running such a business.

-If you were successful in making a profit in similar activities in the past.

-Whether the activity makes a profit in some years and how much.

-Whether you can expect to make a future profit from the appreciation of the assets used in the activity.

-The element of personal pleasure involved in the activity.

It would seem to me that selling a few videogames on ebay would never qualify as a taxable business. Think of it on the flip side, could you claim a loss on your videogame sales without the strong possibility of an audit hanging over your head? I don't think so. The sum of $20,000 is not relevant here, nor the 200 transaction limit. If some folks can't claim a loss on dog breeding (when they are clearly selling dogs with paperwork and trackable expenses, year after year after year) than I would say selling used games falls into the exact same category. Even if I sold $50,000 worth of games I would claim it as a hobby, but on the flip side I have 70% the recipts for all of my collection.

Here is a good article and supporting documents:

http://www.forbes.com/2009/07/10/irs-taxes-hobbies-personal-finance-hobby.html

http://www.irs.gov/businesses/small/article/0,,id=208400,00.html

 

the government sucks they want to take all our shit, i see on ebay so this really does suck the big one

 

Just like they took your punctuation keys... save the comma.