The IRS Audit Blog

Archive for July, 2009

Question: Occasional Ebay seller – which income tax form should I use?

I only sell on Ebay occasionally, clearing out old stuff from the house. But a few things I sold turned out to be in demand, so I ended up making about $600. Which tax form should I use to report this? The Schedule C business form says only to use that form for business done on a regular basis, not to use that form for reporting hobby income, but to use the ‘line 21 for other expenses’ to report it instead. But the explanations for line 21 don’t fit either. Do I need to attach a form? The IRS web site mentions ebay earnings as business expenses or capital gains…but the capital gains form doesn’t look like it applies to ebay sales at all.

I just can’t understand all this IRS mumbo-jumbo – can someone please help me? I can’t afford to hire a CPA, but I don’t want to get into trouble for not reporting income

Answer: You will put it straight on the 1040. If you use the 1040 long form it will be put on line 21 under Other income and write Hobby income since you are not engaged in a business to make a profit. Remember you are allowed to deduct expenses for selling the stuff on eBay, but you cannot claim a loss for hobby income.

Read Tax topic 426 for more on hobby income.

Standard deduction amounts increased

Married couples who’ve been submitting joint returns for a while will notice their standard deduction amount has jumped substantially in recent filing years.

Tax Information Help and advice on Filing Your taxes IRS

Ruling on Kilpatrick’s restitution expected Jan. 20

Closing arguments in ex-Detroit Mayor Kwame Kilpatrick’s restitution hearing ended. Read Free Press staff writer M.L. Elrick’s blog.

21a. Can I Get an IRS Installment Agreement? Why won’t they let me pay over time?

Senate Bill Would Limit Savers Using 401(k)s as Rainy-Day Funds

Workers will be limited in tapping their 401(k) retirement plans for loans under legislation two senators plan to introduce today that’s designed to counter the erosion of retirement assets.

Dr Deagle Show 111809 1/4 – BOB CHAPMAN – FINANCIAL ANALYSIS

BILL HASTINGS’ INSIDE INDIANA: Downtown memories, Boy Scouts, Willis

To whom it may concern – DOWN MEMORY LANE – Business Indiana, the Gazette’s annual tabloid featuring a “diverse” economy, always triggers some memory bells.

Woman Sues Kmart Over Toilet Paper Tax, Wins

Question: How does one legally terminate a living trust that contains property that is land-locked and can’t be sold?

Four years ago my Dad died and left his assets to 6 children through a trust in the state of ARkansas. The majority of assets were distributed the first 2 years. One piece of land remains that is seemingly land-locked–the adjacent neighbor will not allow access, and none of us can found the legal access road to the land. Our attorney will not help…it seems he just wants to continue to draw out this trust. My sister, the trustee, lives 350 miles away, and chooses to do nothing…HOW CAN WE GET THIS TRUST FINISHED? I am concerned that 10 years from now I will be paying attorney fees to pay the property taxes on this land.

Please give me a direction to get started.

Answer: Don’t give up that land too fast.

First, see if there is a recorded access easement. You can check the county recorder’s office yourself, or have a title company do a title search.

If there is no recorded easement, there still may exist an implied easement by necessity. Such an easement will automatically exist when the only access to the landlocked parcel is through land retained by the grantor of the parcel. For instance, in your situation, if the landlocked parcel originally was part of a larger parcel owned by the adjacent neighbor, and the only access is through the neighbor’s parcel, then a court will automatically find that there is an easement of necessity from your parcel through the neighbor’s.

Or, you can buy an easement from your neighbor. Offer him a certain sum of money to create an easement from your landlocked parcel through his.

Contact a local property attorney for more information. He will be able to offer additional suggestions.

Arkansas Powerball lottery winner in no rush to claim jackpot

Work might not be the top priority for someone who’s just won the lottery, but financial experts say deciding what to do with a multimillion-dollar prize is a job in itself.

Patent Agent Jobs Arkansas