Paypal 1099 time of the year..

[goobmcnasty]

I think if it says that it just means your fine.

Well I still want to claim my profits/expenses to write off on taxes. I spent close to $40K, but only received $10K in payments, so there's about $30K in write-offs in there. This darn sportscard business loses money every year!

 

[ccouch (Chad)]

Well I still want to claim my profits/expenses to write off on taxes. I spent close to $40K, but only received $10K in payments, so there's about $30K in write-offs in there. This darn sportscard business loses money every year!

Then under the rules set forth in the Internal Revenue Code, you are aren't engaged in a business, you are engaged in a hobby. And you can't deduct hobby losses.

 

[ccouch (Chad)]

I suspect some of you know this and some of you don't, but you can't deduct the cost of items that you haven't sold. So just because you spent more than you took back in sales doesn't mean that you don't have a taxable profit for the year.

 

[goobmcnasty]

Yeah, I wasn't completely serious.

 

[A_Pharis]

I suspect some of you know this and some of you don't, but you can't deduct the cost of items that you haven't sold. So just because you spent more than you took back in sales doesn't mean that you don't have a taxable profit for the year.

An awful lot more goes into assigning value to individual items, too. It's a MAJOR can of worms, and I definitely wouldn't want to temp the Audit Gods.

 

[bear0555]

I suspect some of you know this and some of you don't, but you can't deduct the cost of items that you haven't sold. So just because you spent more than you took back in sales doesn't mean that you don't have a taxable profit for the year.

I was told no. I have a spreadsheet that tracks items as they arrive and get sold and only deduct cost after an item is sold.