Beth, are online auction sellers required to pay income taxes on sales?
Many people who sell goods on the Internet don’t realize the income they earn from auctions and consignment sales is usually taxable. If you have a gain from selling an item through a consignment sale or auction, by traditional means or online, the amount is usually taxable. In simple terms, a “gain” means you sold an item for more than you paid for it. Are there different rules for auction selling as a business versus a hobby? If your online auction sales are the Internet equivalent of an occasional garage or yard sale, you generally do not have to report the sales. There are exceptions. In a garage sale, you generally sell household items you purchased and used personally over the years. If you paid more for the items than you sold them for, the sales are not reportable. Losses on personal-use property are not deductible either. On the other hand, if you have recurring sales and are purchasing items for resale with the intention of making a profit, then you may have started an online
