Editing Challenge

Topics: Tax, Taxation in the United States, Sales Pages: 1 (288 words) Published: February 16, 2015
Fri, Jan 30

Mrs. Julie Noriega 392 Blue Lagoon Way Orlando, FL 32814

Dear Julie:

3392 Econlockhatchee Trail Orlando, FL 32822-6588 407.891.2330 garth.peterson@raintree.com

I am sending you this letter, as your Financial Planner, I am glad to respond to your request for clarification on the Tax status of the eBay profits.

As you in all are probably aware , you can use eBay to clean out your closets or eBay can be used to run a small business. Your smart to enquire about your tax liability. Although there is no clear line that separates fun from profit or a hobby from a business. One thing is certain, the IRS taxes are all income.

There are a number of factors that help determine whether or not your hobby should or should not be considered a business. To use eBay safely the following questions should be considered:

1.

Do you run the operation in a business like manner? Do you keep records? Is your profit and loss tracked, and how about keeping a separate checking account?

2.

Do you devote a lot of time and effort to eBay? If you spend eighteen hours a day selling on eBay the IRS would tend to think your in a business.

3.

Some people depend on the income from their eBay activities for their livelihood.

Are you selling items for more then they cost you? If you spend four dollars for a Garage Sale vase and sell it for fifty dollars the IRS would probably consider this a business transaction. All profits is taxable. Even for eBay sellers who are just playing around. If you wish to discuss this further please call me at 551-8791.

Sincerely,

Garth Peterson

Certified Financial Planner

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