@stevendingle54 wrote:
Please provide a reference to your position on this...I would like to be corrected.
OK, I looked it up.
https://www.forbes.com/2010/04/22/irs-tax-audit-ebay-seller-personal-finance-irs-worker-loses.html?s...
In his decision, Judge Dean noted that taxpayers are obligated to report any gains from property sales, which means Orellana was obligated to track her cost or basis of the property sold, to show whether she'd had such gains. Generally, sellers of personal items on eBay get less for their items than they paid for them. But Orellana, representing herself in court, said she had no receipts for items sold. (emphasis added)
https://taxprof.typepad.com/taxprof_blog/2010/04/tax-court-irs-agent.html
For 2004 the RA determined that there were unidentified bank deposits of $8,402.48 and unreported adjusted gross receipts from eBay/PayPal of $22,260.65 for a total of $30,663.13 of unreported income. There was no reduction in gross receipts to account for petitioner's basis, if any, because there was no evidence with which to tie petitioner's purchases to her sales (emphasis added).
Go to this page, select the tab for "opinions" and search for the plaintiffs name "Orellana"
https://dawson.ustaxcourt.gov
Here's some Treasury regulations
https://www.law.cornell.edu/cfr/text/26/1.61-6
(a) In general. Gain realized on the sale or exchange of property is included in gross income, unless excluded by law. For this purpose property includes tangible items, such as a building, and intangible items, such as goodwill. Generally, the gain is the excess of the amount realized over the unrecovered cost or other basis for the property sold or exchanged.
