This is the first year I have to filed taxes for my ebay store. We have gotten big enough to where it was reported to IRS and in their eyes is "acting in a business manner" No big deal.
Schedule C is pretty easy, have all the expenses put in, shipping charges, ebay fees, packing material etc. No problem
What is throwing me off is Cost of Goods Sold. See below to explain our situation.
First year filing, current inventory in my garage is about 950 items give or take a few. Ebay price for all items is around $34000
These items have accrued over the years, so not all were purchased last year. Last year When I added up all the reciepts for purchases it was around $1200
(We sell antique/collectibles on ebay so pretty much live at thrift stores, second hand stores etc)
So I read that if you don't know your inventory to claim 0 inventory for first/last and put in the cost of items purchased that year. Ok no problem
but then what do I do next year, even if I carefully track how much how much we pay for each item bought this year and how much it sells for I'm still left with the other 950 items in the garage from previous year that will hopefully sell this year and I have no idea how much they were purchased for.
I read on other posts that the IRS Doesn't get to cranky about tracking inventory unless you make over a million a year in gross, this past year gross we were at about $21000 that is from the 1099 which includes shipping charges etc.
Am I making any sense? haha
