EBay Profits Are Taxable

By Amy E. Feldman

PHILADELPHIA (CBS) - Thinking of selling old stuff on eBay for funds to buy presents this season? Just don't forget your Uncle Sam.

In case you were wondering if anyone went broke underestimating the taste of the American public, an item that sold on eBay provides the answer. After One Direction band member Harry Styles got sick by the side of the road, an enterprising fan scooped up the vomit and sold it on eBay. The mind boggles with questions like: who bought that? And how do you know it belonged to Harry Styles? And, other than the cost of your dignity, did you remember that there's a financial cost to that sale?

If you're selling old stuff on eBay and make a profit, remember that all income is taxable. If you're just looking to clean out your garage, you are likely selling the items for less than you bought them and then would not have made a profit on them. But if you are buying goods from a wholesaler and reselling, or if you are producing the goods and selling them like a business for more than the cost of manufacturing, then you are running a profitable business.

On eBay, one man's trash may be another man's treasure but remember that to the IRS, any treasure can and will be taxed, which may make you sick to your stomach.