posted on September 15, 2000 04:34:06 AM
I have been watching this with great interest. There are so many saying they are not a business. If you are selling as a hobby, your not getting any tax deductions on it. If you are selling out of your closet. Those are Capital Gains. If you are a business, fees charged are tax deductable. I assume Paypal fees would be also. I wonder if those complaining the most are not being honest with themselves about having a business. All income is taxable and those fees charged by Paypal, Ebay or anyone else is a tax deduction. So why wouldn't you want to be a business. I don't look at Paypal as lieing. If you are familiar with any business's, then you should know that policys change with the times. They have to, in order to keep their heads above water. So they have made a policy change. They still have the same services, and that should be what's important. I agree they didn't go about it in the right way, but we all learn as we go. I am on Ebay to make money. I accept checks, money orders or Paypal. If my customers want Paypal, It will be there for them.
posted on September 15, 2000 04:51:46 AM
Goldy -
"If you are selling as a hobby, your not getting any tax deductions on it."
News flash! You declare ALL income from the hobby, then you deduct all expenses of the hobby. Even if you ARE a "hobby" for tax purposes, you can claim a whole lot of deductions:
1. Supplies
2. Postage
3. Advertising
4. Other costs associated with the hobby - travel to dog shows
There are a few deductions available to a "business" that are not available to a hobby, but it's a very slim distinction.
"If you are a business, fees charged are tax deductable. I assume Paypal fees would be also."
... any fees related to the hobby are deductible from the income produced by the hobby. Infact, if a business loses money too many years, the IRS will DECLARE it a hobby and make you re-calculate your business deductions.
"All income is taxable and those fees charged by Paypal, Ebay or anyone else is a tax deduction."
True ... but the IRS, states, and cities have definitions of BUSINESS, and many of us so not fall into that.
"I don't look at Paypal as lieing."
It depends on when you joined them. In JUNE they sent a letter/ad that said "no one would be forced to convert to business accounts". Suddenly it's "required" for "businesses", which makes the June KLetter a lie. Damon admitted in another thread that they had not defined what they would call a "business" yet, and the rest of their policy was equally non-existant.
Have you looked at the signup form for the business accoubnt? Way too intrusive, asks for way too much data that a hobby seller does not have.
posted on September 15, 2000 09:10:59 AM
I apologize, you are right. You can take deductions on a hobby, and of course a hobby is not a business because it is not carried on to make a profit. I guess the Paypal charges would hurt all the Ebay sellers who only have a hobby. Getting any federal agencies involed in this, I would think is going to open up a whole can of worms.
I think you missed the point that a lot of us have been *attempting* to make. Whether we are a business or not, some of us signed up at the beginning, when there was no mention of "businesses", business accounts, ecommerce, etc.
They said "You can accept auction payments for free", "we are a free service", ect.. They did not make distinctions. We expect them (PayPal) to live up to their promises that they made at the beginning.
We were recruited (by our buyers whom they offered a bounty to sign us) and they knew full well that we were "businesses". Why no distinctions? Easy.. How many of us would have signed up if we knew we were agreeing to pay for it? Some would have but they would not have cornered the market like they did.
Why do you think that so many more people went for PayPal than Billpoint? Because PayPal was free.. It is called bait and switch and that's the real issue here. Now Damon is attempting to twist the meaning of the original agreement. The only ones who are falling for it is the ones who were not there in the beginning.
posted on September 15, 2000 10:04:13 AM
There's more to it than what I mentioned above.
Buyers and Sellers need to unite on this issue!
Sellers will, out of necessity, pass the added cost onto the buyer. To keep giving the buyers bargain items we have to be able to keep our expenses as low as possible. If we don't make a profit we are waisting our time and resources selling on ebay. So you will see more handling fees and higher opening bids. Sniping will be less attractive.
This affects the buyer in other ways. Can you trust a company that changes the rules at every whim?
Totally free to the consumer? It was at one time totally free to the seller! What if they decide to charge the purchaser a 1% fee on each purchase?
Consumer fraud protection? What if they decide that there is a $25 deductable?
They have proven that the rules will change again and again. You can't believe a word they say. Truth to them is subject to change at any time without notice.
