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Personal Income Tax -> EBay Sellers
Filing Your Return

Selling Goods on eBay May Result in Taxable Income

Do you sell goods on eBay?  These transactions may result in taxable income.  They may be considered dispositions of capital property, eligible capital property, personal-use property, listed personal property, or inventory, each of which has a different tax treatment.

If the sales are determined to be business income, the value is included in income when determining whether the person has reached the threshold of income where he must become a GST registrant.

Canada Revenue Agency (CRA) obtained a court order requiring eBay to release to them information on certain Canadian eBay sellers.  The information includes names, contact information, and sales records for

bulletsellers who, in any of the years 2006, 2007 or 2008 had more than $20,000 in sales and at least 24 sales transactions, or
bulletsellers who, in any of the years 2006, 2007 or 2008 had more than $100,000 in sales, regardless of the number of sales transactions

The eBay seller does not have to be an eBay PowerSeller in order for the records to be released, as long as the criteria above are met.  The court order refers to sales on eBay.ca or eBay.com.

CRA issued a news release on eBay selling, and indicates that sellers can avoid penalties by providing information to CRA under the Voluntary Disclosures Program (VDP).  However, this information must be disclosed to CRA prior to their initiation of an audit or other compliance action.

eBay also posted an announcement on their website about this issue.  The announcement includes frequently asked questions, and a link to the court order from the Federal Court of Canada.

Tax Tip:  If you are an eBay seller and are not sure if the income is taxable, talk to your professional tax advisor.

 

Revised: June 20, 2016

 

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