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Monday March 28, 08:01
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EBay on-line marketplace belongs to taxable area
(by Helen Snow)
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The auction site eBay, so called "the world’s on-line marketplace", numbers more than 135 million registered users. More than $34 billion worth of merchandise was bought there last year.
There have already been discussions about its taxable nature. Tax law provides no clear criteria that establishes a division between a hobby and a business. But the Internal Revenue Service (IRS) instructions make it clear that all income from any kind of activity can be taxed.
The IRS brings forward a list of nine indicators that might point out whether someone’s on-line auctions can be regarded as business. At the heart of these indicators lie the factors proving that a person depends on the income, acts in a businesslike mode or with the purpose of profit.
However, some categories remain questionable. In such cases it is safer to consult a tax expert.
Chris Donlay, eBay spokesman, said this is not the business of the company to report individual sales to the tax authorities. It just advises users to learn about tax issues.
"It’s really up to the seller, just like offline," Donlay said. "We are just a venue, really. We’re sort of like the mall landlord or the owner of the parking lot where the flea market happens."
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