# Taxation on Ebay Sales



## bariutt (Feb 2, 2013)

I have always been somewhat of a collector - books, camera equipment, stamps, etc. 

In December I decided to sell off some of my collection on eBay. In January I had sales of slightly over $4000. Same thing in February.

I still have more items that I would like to sell but now I am wondering at what point does Revenue Canada say that I need to pay income tax. 

Any guidelines that can be provided on this forum would be appreciated. 

Also although I might sell a camera lens for say $100 on eBay I originally paid something for it years ago (but no longer have a receipt) - so how do I really prove to Revenue Canada what the profit on the $100 is?


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## Spudd (Oct 11, 2011)

If it's reasonable to assume you didn't make a profit, then there's no tax to pay. So your camera lens, for example, you likely bought years ago and are selling for less than you paid for it. No tax. 

If you are making a profit because you have some collectibles worth more than you paid, you will need to figure out how to calculate the cost base (what you paid) and calculate the profit, then pay tax on that profit. 
http://www.cra-arc.gc.ca/E/pub/tg/t4037/t4037-e.html#P941_72799


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## fatcat (Nov 11, 2009)

i am selling off my stamps on ebay
i also have sales around 4-5K for each of the last 2 years
i just assume a cost base of zero (since i have not a clue what i paid for a given stamp, most of which i sell for less than $5)
at the end of the year i take the standard $1000 cost base deduction
and then my mailing and other expenses off that and report the net as a capital gain

i don't think that it is "reasonable" to assume it didn't make a profit since though these are low value stamps, i have had some of them for 25 years or more, though it's also true that many stamps have gone down in 25 years

the problem with me is that i have thousands of low value stamps
people will with small high-value collections can produce much better numbers since few small time collectors keep decent (or any) records

the base assumption is that over a long enough time most collectibles will go up in value rather than down

though i realize there are many exceptions to the rule as those of us who watch antiques road show know all to well


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## WillyA (Apr 14, 2011)

Also if you cross $30,000 in gross sales over 4 quarters, you may have to register for gst/hst even if you are not making a profit (I said maybe because your service might be exempt like most financial services)


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## bariutt (Feb 2, 2013)

Okay lets take a theoretical example. Lets say I sell 50 items total. The first 20 are text books that I originally paid full price on when new. When the books are sold on eBay they are sold for less than the acquisition price. Then I sell 10 items and make a profit. Then I sell 20 items like old camera lenses that I originally bought new at a high price and now sell on eBay for less than the acquisition price.

The net result of the 50 sales is a loss.

In the above example do I have to declare the sales on my income tax???? If I do is it a capital loss (as opposed to a capital gain?????) 

Can I use this capital loss to reduce capital gains that I have made in the year on investments??????


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## kewlthing (Jan 30, 2010)

My understanding is that items sold on eBay that were your personal items are exempt from any taxation. However if any items were bought with the sole intention of resale and with a profit intention is taxable. For example, if you go to garage sales or auctions and acquire items expressly to sell and make a profit then they are taxable. I know there is probably a gray area there on what your personal items from your own personal collection is but my understanding is that the way it works.


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## fatcat (Nov 11, 2009)

kewlthing said:


> My understanding is that items sold on eBay that were your personal items are exempt from any taxation. However if any items were bought with the sole intention of resale and with a profit intention is taxable. For example, if you go to garage sales or auctions and acquire items expressly to sell and make a profit then they are taxable. I know there is probably a gray area there on what your personal items from your own personal collection is but my understanding is that the way it works.


this is a question of degree .. if you see a few items of year of personal property that you no longer need i would't bother

but there is a category of capital gains called personal use property, you have an automatic $1000 adjusted cost base, in other words if the stuff you sell totals less than $1000 there is no gain to report if it is more and you report it all as a gain you can subtract 1000 from the total

most of this applies in cases where you have no records, if you keep good records and can prove losses based on what you paid for something you should have a loss to report 

i am NO tax expert and may well be wrong ... do your own research


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## kewlthing (Jan 30, 2010)

fatcat said:


> this is a question of degree .. if you see a few items of year of personal property that you no longer need i would't bother
> 
> but there is a category of capital gains called personal use property, you have an automatic $1000 adjusted cost base, in other words if the stuff you sell totals less than $1000 there is no gain to report if it is more and you report it all as a gain you can subtract 1000 from the total
> 
> ...


Say for example you collected G.I. Joe figures 25 years ago and you had them displayed in your basement and were considered your own personal collection. Now you're older and you want to get rid of them. You sell them on eBay and you get thousands of dollars for them. Clearly they've gone up in value but that wasn't your intention or concern when you bought them originally. Based on the small research I did a few years back any gain on those items is exempt from taxation. There was no profit motive originally, they just sold at current auction market prices. Again though, proving your collection was personal and you had no profit motive may be difficult.


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## bariutt (Feb 2, 2013)

*Ebay Sales*

I would rather not declare as income however I project that I will sell a large volume of items this year (probably more than 150 items). I am getting rid of some of my collections. I expect that my total sales will be in the order of $12,000 for the year. That is why I am concerned about declaring this as income.

On many of the items (books and camera equipment that I originally purchased new) my purchase cost years ago to buy them are much higher than what I sold them for now on eBay. My problem is that I won't have accurate receipts so my estimate of original value will have to be estimates.

On some other items I am clearly making a profit.

I guess I will start a spreadsheet that includes costs, eBay fees, shipping, Paypal fees etc.


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## Zeeshanbmerchant (Jan 4, 2014)

bariutt said:


> Okay lets take a theoretical example. Lets say I sell 50 items total. The first 20 are text books that I originally paid full price on when new. When the books are sold on eBay they are sold for less than the acquisition price. Then I sell 10 items and make a profit. Then I sell 20 items like old camera lenses that I originally bought new at a high price and now sell on eBay for less than the acquisition price.
> 
> The net result of the 50 sales is a loss.
> 
> ...


your mixing business and selling of personal use property. Personal use property has to be sold for over $1000 to be considered taxable, and thats if no other ACB can be determined. Text books and Camera lenses, these were personal use property. Then in the middle you sneaked in 10 items for profit, thats a business. Especially if you are going in with the mind set that you will sell them for a profit.


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## Zeeshanbmerchant (Jan 4, 2014)

bariutt said:


> I would rather not declare as income however I project that I will sell a large volume of items this year (probably more than 150 items). I am getting rid of some of my collections. I expect that my total sales will be in the order of $12,000 for the year. That is why I am concerned about declaring this as income.
> 
> On many of the items (books and camera equipment that I originally purchased new) my purchase cost years ago to buy them are much higher than what I sold them for now on eBay. My problem is that I won't have accurate receipts so my estimate of original value will have to be estimates.
> 
> ...


First of all, as a professional accountant, i advise you never to use the word profit when it comes to CRA. Anytime you use profit, you have immediately brought a business into play. Its clear you arent running a business, because you arent buying for the purpose of selling, but whats more important is that if you ever get audited, you stay away from the wrong words. 

based on a simple average, you aren't selling any items over a $1000. thus for each item the capital gain is non existent. For a capital gain to exist, you have to sell the personal property item for more then a $1000 each. Thats per item. Not aggregate. Based on that these items are not taxable, so relax

Should the government ever come knocking on your door, a simple explanation would suffice. Its not a big deal. It would be different if you were selling a 1000 of the same item, thats a business, because you are bulk buying for the purpose of selling

Having said that, according to CRA personal use property


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## fatcat (Nov 11, 2009)

Zeeshanbmerchant said:


> First of all, as a professional accountant, i advise you never to use the word profit when it comes to CRA. Anytime you use profit, you have immediately brought a business into play. Its clear you arent running a business, because you arent buying for the purpose of selling, but whats more important is that if you ever get audited, you stay away from the wrong words.
> 
> based on a simple average, you aren't selling any items over a $1000. thus for each item the capital gain is non existent. For a capital gain to exist, you have to sell the personal property item for more then a $1000 each. Thats per item. Not aggregate. Based on that these items are not taxable, so relax
> 
> ...


i just don't agree ... many people have aggregate collections of stamps, coin and kinds of collectables that might be worth 5K 10K 100K or more ... so lets say you have 50K worth of collectable coins that have gone up in value by say 50% (they have doubled in value) ... so if you sell 20K worth in a year (you are just selling off your collection, you are not buying and reselling coins) and you don't sell any one coin worth more than 1K, you don't owe any tax ?

i doubt that cra would agree ... you have theoretical gain of 10K and merely because no item sold for more than $1000.00 you don't need to report anything ? .. i really doubt this ...can you point me to the cra reference on this ?


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## bariutt (Feb 2, 2013)

*Ebay Sa;es Taxation*

Here is a cut and paste from a Tax Tips site:

Important information for Canadian members who were high-volume sellers in 2006, 2007 or 2008 

In September 2009, eBay Canada received a court-authorized requirement from the Canada Revenue Agency that requires it to release the account information and sales data of Canadian resident eBay members who meet the following criteria:
•	Sales of more than $20,000 and at least 24 sales transactions in any of the calendar years 2006, 2007 or 2008, (irrespective of membership in eBay's PowerSeller program); OR
•	Sales of more than $100,000 in any of the calendar years 2006, 2007 or 2008, regardless of the number of sales transactions.
eBay is only required to release sales information for the year(s) in which a seller met the above sales thresholds. 

The member information that will be released for 2006, 2007 and/or 2008 includes: full name, user id, mailing address, billing address, telephone number, fax number, email address, and the selling prices (high bids) of the items. 

I will not sell over $20,000 in 2014 (probably half of that) so does that mean that I am okay. 

I also saw mention on another site that CRA wanted information on any Seller with sales exceeding $4000 in any 3 consecutive months. Again I am below this value??????


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## fatcat (Nov 11, 2009)

bariutt said:


> Here is a cut and paste from a Tax Tips site:
> 
> Important information for Canadian members who were high-volume sellers in 2006, 2007 or 2008
> 
> ...


i am going to call cra in the next few days and try to get some clarification on this .. the numbers you are putting out are not "hobbyist" numbers, these are people doing business on ebay and so cra is probably looking for unreported income

a key issue certainly is whether you are _buying_ and then re-selling, this makes you a business, period

if you are like me, just selling off collectibles, it is a different matter altogether, though we are both well below these numbers 

i am interested to see the accountant's response, this is an argument i would love to lose, if i am reporting something i don't need to report, needless to say, i would rather not


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## bariutt (Feb 2, 2013)

*Get Back To Us*

fatcat

Please get back to us if you call CRA as to what they tell you

I think that if you declare income on your tax return then CRA will gladly tax you on it

However these eBay sales are complicated and I would like to understand the rules better before I add any additional income on my tax return


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## Zeeshanbmerchant (Jan 4, 2014)

Its irrelevant whether there is agreement or not. Fact of the matter is op poster is not operating a business but selling personal property on eBay. 

When we talk about a stamp collection a person collection stamps is not operating a business. The above eBay notice only reflects people operating online businesses


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## MoneyGal (Apr 24, 2009)

Holla! CRA in fact takes the position that whether you say you are operating a business or not is irrelevant, and what they track is sellers who have, for a calendar year, eBay sellers who have $20,000 or more in (gross) sales AND at least 24 sales transactions. 

Linking to the taxtips.ca page because it provides lots of helpful info: http://www.taxtips.ca/personaltax/ebaysellers.htm


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## domelight (Oct 12, 2012)

Bariutt I may as well chime in to the lengthly thread. So here is the info you want and need.

1. Google "CRA Listed personal property" The first link or two should get you what you need from CRA's website. Personal Use property & Listed personal property are different. Listed personal property will allow you to claim loses.

2. You are not required to report any item unless the sale price is in excess of $ 1,000 and in that case only the amount over $ 1,000 is a capital Gain. (Losses can be used to offset any gain, but only for items that are your cost over $1,000)

3. All that being said each item should be treated individually unless they can be considered a set. So obviously a camera and a book cannot be considered a set. so if each are sold for under $ 1,000 then you don't have to report it. 
Examples...
-- I don't see how a book written by John Doe and a book written by Dave Smith could be considered a set
-- I don't see how two unrelated stamps could be considered a set.
--If you are selling something as a set than refer back to the amounts over $ 1,000 mentioned previously.
--If you bought something as a set ie: maybe a set off stamps and are now piecing it out then yes those items should be considered one item for the purpose of this conversation.

4. Don't waste you time phoning CRA and asking. They will give you honest advice but not the details (if they know). Remember CRA is not responsible for giving incorrect advice on the phone.

5. For amounts over $ 1,000 which are reportable. Find a receipt, google some price guides for the time frame you purchased it. Hell take a guess, don't just report a gain for anything over $1,000. Worse case is in the unlikely event you get audited. You pay what you originally would have and a small amount of interest.(5% annually) If you cant document a certain receipt then argue reasonability with them.

6. I'm quite confident on everything I'm telling you but, if you still insist on calling CRA you will want to ask for their definition of "a set" for the purpose of calculating gains on "Listed Personal Property" and don't forget that unless you have it in writing or are referred to an IT Bulliten that you can review then what you are told over the phone is meaningless at audit.

In conclusion I strongly suspect that you should have very little if anything to report. Best of Luck !


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## fatcat (Nov 11, 2009)

domelight said:


> Bariutt I may as well chime in to the lengthly thread. So here is the info you want and need.
> 
> 1. Google "CRA Listed personal property" The first link or two should get you what you need from CRA's website. Personal Use property & Listed personal property are different. Listed personal property will allow you to claim loses.
> 
> ...


first, i have read a bit on this and come to a different conclusion 

let me state that in this case i quite happy to be proven wrong and lose the argument

last year i sold off part of my stamp collection and the numbers were like around 4500 for something like 1000 transactions, in other words i am selling very low volume stamps (to be clear i am not buying any stamps, i am disposing of hopefully every stamp i own never to collect (or need to sell) stamps again ...

i have about 40 stamps on ebay at the moment that are for sale for $1.00 US ... they probably have a total catalogue value of 500X that but are simply too common to be worth more

i have not a clue what i paid for these stamps, not a clue since like many collectors i have accumulated books, bags and buckets of stamps (il literally throw out and / or donate stamps by the handful)

so, you are saying that since no single sale has reached $1000, i am not required to report any of my sales ?

yet in the aggregate i have sold over $4500 ?


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## bariutt (Feb 2, 2013)

Good discussion - I am learning something here so glad that I posted to ask the question

I did not understand the difference in the 2 definitions - Personal Use property & Listed personal property

Everything I am selling on eBay probably would be considered as Personal Use property with individual values less than $1000.

Here is a cut and paste from CRA:
The Canada Revenue Agency says...
Capital Gains Guide (T4037)
This refers to items that you own primarily for the personal use or enjoyment of your family and yourself. It includes all personal and household items such as furniture, automobiles, boats, a cottage, and other similar properties.
When you dispose of personal-use property, you may have a capital gain or loss. To calculate this gain or loss, follow these rules: 
	If the adjusted cost base (ACB) of the property is less than $1,000, its ACB is considered to be $1,000.
	If the proceeds of disposition are less than $1,000, the proceeds of disposition are considered to be $1,000.
	If both the ACB and the proceeds of disposition are $1,000 or less, you do not have a capital gain or a capital loss. Do not report the sale on Schedule 3 when you file


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## domelight (Oct 12, 2012)

Fatcat,

1. First lets clarify something CRA's attack on Ebay Seller's is in regards to people who are running a business or using Ebay to regularly put some extra money in their pocket from random sales, NOT for people who are selling off their personal collectables. You need to keep this in mind when are surfing through information and remember to differentiate the two.

2. If you are running a business or regularly flipping items with the intent to make a profit, then everything is straight income, no capital gains treatment.

3. This conversation is in regards to disposing of personal collections and or collectables.

4. Regardless of the number of item's, if the item's are being disposed of and the intent was always that of personal collectables and not one to make a profit, then my earlier post stands and yes each of your 1,000 stamps should be treated individually, unless as previously mentioned you are piecing out a "set"


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