Are my 2 Ebay sales a hobby or a business?

[Dave918]

Hello,

I had 2 Ebay sales in 2025 of items that I bought new specifically for resale. The sales amounts totaled about $3200 and my net profit was about $450. How would I report these in Turbotax Home and Business? On the one hand it's not something I regularly do (in which case it would be a hobby not a business) but I was reselling new items for a profit motive (which would be a business). What are the procedures I need to report these in Turbotax?

Thank you,

D

[Opus 17 · Accepted solution]

Some of the key factors are regularity of the activity and profit motive.  This is not a regular activity, but you certainly had a profit motive for these specific transactions.  The IRS has more here,

https://www.irs.gov/newsroom/hobby-or-business-heres-what-to-know-about-that-side-hustle

If a hobby, then this is basically a capital transaction where your income is the difference between the price you paid and the selling price.  You could report the sales as short term capital gains, or a miscellaneous other income (same result).  You can subtract the purchase price of the items from the sales price, but you can't subtract other expenses, like listing fees, credit card fees and shipping.

If self-employment, you report this on schedule C as a side business.  You can deduct all your ordinary and necessary expenses, which might include shipping, credit card processing fees, and maybe other costs.  But you will pay both income tax and self-employment tax on the net profit after expenses.