Pelham, NH asked in Business Formation and Tax Law for New Hampshire

Q: I’ve started selling 20 years worth of saved up stuff on eBay. I’m starting to think I may hit the 20k threshold 4 1099

We have 5 kids and 20 years worth of all you can imagine from that and inherited items. We both work, I make over 100k. This thing I’ve been procrastinating to do is a ton of work but also fun and rewarding. I’m probably going to hit the 20k cash in threshold for PayPal to issue a 1099. I’ve found myself looking into sources of junk to keep going lol. I’m starting to think a schedule c may benefit me in the short term. All this crap is at a massive loss but I have no idea how to account for it. The rest, I’m qualified to handle. I can document expenses and realize the benefits of using the home, which technically this crap has been occupying 20% of for years. But what do I do about value? Receipts would be few and far. But value could be determined because the items are all logged by ebay. If I can document the loss, could I carryover that loss if I decided to truly operate as a business. I have some more specific questions and I’d pay 4 Answers or a resource. I can handlebooks/filing.

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1 Lawyer Answer
Eric  Day
Eric Day
  • Tax Law Lawyer
  • Henderson, NV

A: The IRS has what’s considered a the hobby loss rules, which is essentially they will check to see whether you have entered into business with a profit motive. If you never make a profit and your intent is to tak the losses on your return, the IRS will consider what your doing a hobby and not an actual business. That being said, you will only be able to deduct the expenses that make your profit $0.00. All other expenses that take you beyond that point would be non beneficial.

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