Tax on internet

What is the name of your state? Texas

Lets say I have a private record collection
that I have sold on an auction site,I know it is not subject to sales tax but can it be federally taxed?

Thanks

[abezon]

Casual sales are usually not subject to sales tax (garage sales, that sort of thing). Even if you were supposed to collect sales tax, you only collect it from buyers who are in Texas. Everyone else is responsible for filing a "Use Tax" return in their state and paying their state's sales tax on the purchase price. (Yeah, right. That happens all the time.)

There is no federal sales tax.

You have to pay capital gains tax on the profit you made when you file your 1040 next spring. It goes on Schedule D, probably under long term gains. Don't forget to include the costs of sale (eBay fees, PayPal fees in your basis).

I really appreciate the information on the sale of items out of collections on auction sites.
I thought there may be a possible tax liability there but it looks like to me,it would be very hard to enforce,what do you think?

[abezon]

Yes, it's very hard for the IRS to catch a capital asset sale on eBay. The IRS relies on taxpayers being honest (or scared) at tax time & including the sales in their taxes. However, unless a significant portion of your income comes from eBay-type sales, the IRS will have a hard time proving you had income other than what's reported on your W-2s. Your eBay alias is rarely your name & social security number! Also, unless the sale could potentially change your tax liability by a thousand or so, it's not really worth the IRS's time to try to match up eBay sales with taxpayers and then check their returns.

Thanks so much for your info,I rreally appreciate it,it is what I figured but I do not want to get into a tax trap.

LOL! I knew someone a few years ago who actually did this! She had a garage sale and filed the little bit as capital gains! Of course she also sent her baby-sitter a legal W2 after filing to be a business or whatever.