"Kathrin" wrote:

- quote -

A tax pro cannot cost out your inventory for you. It is to
be valued at what you paid for it, so make a list of the
items, grouping where appropriate. Guess at a cost, if you
cannot track back to the actual purchase. Then start right
now with a system to tally 12/31/06 inventory without much
fuss. Any error in your 12/31/05 inventory will "wash out"
when your file your return for 2006, to the extent the items
are sold, so IRS wouldn't fuss over any estimates were they
to audit your return.

In your business, a simple way to cost out ending inventory
cost is just physically $$ tag the item when you acquire it.

Fred F.

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

I just read about the requirements to treat it like a hobby
and I don't think that applies to me. I got a business license
and kept book about my expenses, even though in a simplified
way. I do buy stuff to sell it for profit and I made profit,
even though it is just an income besides my real job. I wish
I could simply just say these are my expenses, and this is
what I made. Period. That would be so easy. I want to do it
all right so it don't bite me one day. I thought I would
understand the inventory thing and could go ahead and do the
tax return by myself, but it seems like I have to go and pay
a pro.

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

Kathrin wrote:

- quote -

Like it or not, this sounds more like a "hobby" than a real
business. Meaning that if you do not operate like a business
(records of inventory cost, receipts, expenses, etc) you are
subject to tax on the gross receipts (Line 21). Expenses are
deductible as Miscellaneous Deductions (subject to 2% of AGI
limits), not to exceed the income. See IRS Pub 334 for
information on running a small business in a business-like way.

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

This is the end of the first year I have a little online
business on ebay selling mostly second hand clothes (side
job). I have an inventory left of approximately 100 pieces.
They are suits, dresses and only a handful tops and pants.
When I count them for the inventory, do I have to separate
the numbers by suits, dresses etc or can I just say 100
pieces of clothing. I am not sure how to determine what they
are worth, since first of they came from different sources
and I don't know exactly which one I paid how much for.
Every item will also sell for a different price. Do I have
to track from now on how many pieces are sold, how many are
bought etc? That would be so time consuming. Is there a link
online that explains how do it right for a small business
like this? Thanks a lot!

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >