Guest betsy805 Posted December 24, 2014 Share Posted December 24, 2014 Out of curiosity, how do you all account for your 'used' inventory on taxes? Do you use a base $/pound and see how many pounds you have left? Quote Link to comment Share on other sites More sharing options...
justafrog Posted December 24, 2014 Share Posted December 24, 2014 Out of curiosity, how do you all account for your 'used' inventory on taxes? Do you use a base $/pound and see how many pounds you have left? Because we sort our used and put it up in individual parts just like new, the accounting is quite similar -- $xx spent on used parts in the year, average markup of 5x the purchase price, $xx sold of used parts in the year, remaining inventory value divided by 5 gives the cost on the retained inventory for recapture. Quote Link to comment Share on other sites More sharing options...
jay4e Posted January 6, 2015 Share Posted January 6, 2015 If you are making enough profit to notice, then assume the IRS will too. Technically in the US you are are required to report all income (ie profit). Does not matter if you only made $5 in profit, there is no true limit. Even if Ebay and/or PayPal do not report your activity to the IRS, if you are audited it will likely get noticed. Now if your profit is small part of your overall income then its unlikely to be a problem, though you will have to pay up and may get hit with some penalties. However also keep in mind an audit will go back years, so if you have been making a couple thousand in profit a year for a few years it could get rough. No matter what if you are serious about making a profit (and I think all of us are), you should be keeping all receipts (for at least a few years). And you should probably speak with a trusted tax advisor or accountant. Quote Link to comment Share on other sites More sharing options...
Barracuda Posted February 5, 2015 Share Posted February 5, 2015 I was browsing the forums and came across this topic and find myself perplexed. As of the beginning of this year I have started selling off a chunk of my gaming collection so I can begin a Lego collection. Reading this thread is troubling as I never considered eBay as income but more like having an online yard sale and this thread seems to disprove my thoughts. Does anyone here have any thoughts how this works when selling a collection not necessarily for a profit. I really have no idea what I paid for most of my collection and I definitely don't have any receipts so all I can really do is guess at what I paid for the items. I have about $800 in sales right now and I figure after shipping, fees, and what the items cost me I have made maybe $250 of actual profit. Now, assuming I have no more sales in 2015 would I file a schedule D for capital gains in 2016 since I am not a business? Any constructive thoughts are greatly appreciated. Quote Link to comment Share on other sites More sharing options...
wubbish Posted February 15, 2015 Share Posted February 15, 2015 I am so confused. I am from the Uk and have a full time job earning Quote Link to comment Share on other sites More sharing options...
GiliusThunderhead Posted December 1, 2015 Share Posted December 1, 2015 (edited) Hey guys. Not just e-bay but in terms of paying taxes in general. After sitting on the sideline for 6 months now and enjoying the ride I'm gonna make the plunge into some small time investing in collectibles (mainly Lego) in the new year. I'm based in the UK and wondering if anyone has any comments on whether to set up a company or report tax as a sole trader? Obviously I understand the limitations here and not asking for Tax advice. Just interested to know if anyone can offer any points or anything I might not think of that ends up making one option better then the other for a small time hobby (and I’m looking at the long game and not just for a short term flip if that makes any difference). Thanks! Edited December 1, 2015 by Lego_Yoda not complete Quote Link to comment Share on other sites More sharing options...
Seeyounexttuesday Posted December 1, 2015 Share Posted December 1, 2015 (edited) On 15 February 2015 20:15:38, wubbish said: I am so confused. I am from the Uk and have a full time job earning 1 hour ago, Lego_Yoda said: Hey guys. Not just e-bay but in terms of paying taxes in general. After sitting on the sideline for 6 months now and enjoying the ride I'm gonna make the plunge into some small time investing in collectibles (mainly Lego) in the new year. I'm based in the UK and wondering if anyone has any comments on whether to set up a company or report tax as a sole trader? Obviously I understand the limitations here and not asking for Tax advice. Just interested to know if anyone can offer any points or anything I might not think of that ends up making one option better then the other for a small time hobby (and I’m looking at the long game and not just for a short term flip if that makes any difference). Thanks! In the uk at least,. What matters is your intention when buying Lego. If like me you buy only one of each set you buy and open them to build, if you sell them at a profit, then there's no tax to pay. This is because you're simply selling your own personal, used goods. The fact you made a profit is simply lucky you. If like lots do here, you buy multiples of each set and leave them sat sealed on shelves for four years before selling them at a profit, then you'll need to file a tax return ontop of your paye if you're employed or add it to your tax return if you're self employed. This is because the tax man will assume you bought them to make a proft as for setting up a ltd company, I'd speak to an accountant as they will advise you the most tax efficient way of handling your sales based on your turnover etc Edited December 1, 2015 by Pjking Quote Link to comment Share on other sites More sharing options...
feed Posted December 1, 2015 Share Posted December 1, 2015 1 hour ago, Lego_Yoda said: Hey guys. Not just e-bay but in terms of paying taxes in general. After sitting on the sideline for 6 months now and enjoying the ride I'm gonna make the plunge into some small time investing in collectibles (mainly Lego) in the new year. I'm based in the UK and wondering if anyone has any comments on whether to set up a company or report tax as a sole trader? Obviously I understand the limitations here and not asking for Tax advice. Just interested to know if anyone can offer any points or anything I might not think of that ends up making one option better then the other for a small time hobby (and I’m looking at the long game and not just for a short term flip if that makes any difference). Thanks! Speak to local accountant you can usually get an hour free. Depending on your current financial situation they’ll advise you if it’s really worth your time/effort/risk. If you’re just in it for the game, then fine. But it’s likely minimum wage at low level investment and if you hit ~£80k annual turnover you need to be VAT registered. I pay mine £250 a year to submit my return for me, on top of the standard PAYE and I do most of the leg work with documenting. I’m effectively paying for him to check it and submit it. For low returns, submitted by an accountant on your behalf HMRC generally will just take your word and send you a bill. Accountancy fees are of course tax deductible, as are a bunch of other things so keep good records. And register as soon as/if you decide as it’s £100 fine if you don’t register within 3 months of selling for profit. Quote Link to comment Share on other sites More sharing options...
botchy123 Posted December 1, 2015 Share Posted December 1, 2015 2 hours ago, Lego_Yoda said: Hey guys. Not just e-bay but in terms of paying taxes in general. After sitting on the sideline for 6 months now and enjoying the ride I'm gonna make the plunge into some small time investing in collectibles (mainly Lego) in the new year. I'm based in the UK and wondering if anyone has any comments on whether to set up a company or report tax as a sole trader? Obviously I understand the limitations here and not asking for Tax advice. Just interested to know if anyone can offer any points or anything I might not think of that ends up making one option better then the other for a small time hobby (and I’m looking at the long game and not just for a short term flip if that makes any difference). Thanks! Register as a sole trader rather than LTD and arrange a meeting with an accountant and ask his advice. Quote Link to comment Share on other sites More sharing options...
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