July 3, 2012 
Regularly trading items on eBay could be a taxable business, subject to income taxes, but benefiting from many great tax deductions.
How do you know if your eBay business is taxable? If you sometimes buy items, use them, and then occasionally resell them on eBay, then your transactions are like an online Garage Sale – don’t worry about the taxes. But if you buy items on eBay with plans to resell them at a profit, then you could be an online auction business, in which case you have taxable income (sorry) but can deduct business expenses, including the treasure trove of business-use-of-home expenses.
The tax rules here can get very complicated, and if you lose too much money, for too long a period of time, your online auction business could be construed as a “hobby:” no longer deductible.
[Image: Garage Sale In Monroe by John Beagle, on Flickr]
Accountinator 
Reblogged this on Homepreneurs's Blog and commented:
We’ve blogged about eBay businesses in the past. Mark explains the tax issues…