ebay question

From: jim <jwstephens_at_msm.umr.edu>
Date: Wed Nov 5 16:07:59 2003

Jay West wrote:

> I have a couple questions about ebay/paypal, and figured some folks on the
> list here might know the "straight scoop".
>
> 1) If some seller sets up an auction as private (yet it still shows up on
> the listings) - the deal is that no one can see who bid on it, or who is
> currently the high bidder. In this set up, how can I be sure the seller
> isn't bidding on his own auction to drive up the price? He's taunting me I
> bet demmit! heh
>

paypal really goes after buyers with a vengence. They don't seem to give a
crap what sellers do. I bid on a camera and won the auction, but the seller
gave me the finger and said "oops, too little money, i messed up not screwing
you with a reserve" and ebay did absolutely nothing, and he continued vic^h^h
selling to others, and does to this day.

To the point you bring up, I think that the fact that they don't void out all
those
"you arent bidding on the real thing, we, just will tell you where to get it
free"
auctions for disk drives, and so forth is basically totally ignoring policing of

bidders. The sellers of that crap have very high "approval" ratings, because
they have gamed their ratings thru the roof.

If you cannot examine the bidders, pre bid, you can't see if they are shills
(usually
bidders with 0 or 1 priors), or ridiculous sham bidders (with ratings make up of

hundreds of $1 crap bids). I'd only bid on a private auction if you know the
bidder, or can obtain real contact with them, and assess their integrity.
Otherwise
as you say, you'll get ripped, and Ebay will be after you, not the seller, since

you are a buyer, and you (not the seller) pays ebay profits.

>
> 2) Hypothetically, say I sell an item on Ebay for... oh... $2500.00. The guy
> could pay me via paypal, or he could send me a cashiers check. Does Paypal
> report transactions to the IRS? Or more importantly, if I sell items on ebay
> all year... do I have to track all that and report to IRS? Never really
> thought of it cause it probably isn't much money anyways. But I am curious
> if ebay and/or paypal reports to the IRS.
>

I think the same exemption that applies to selling personal items in a casual
fashion, such as a garage sale, or penny saver sale of excess would apply.
If you sell a personal item it is the profit that governs the report, not the
gross sale amount. If you get a bargain Apple 1 at a garage sale, and sell
it for $30,000 to Steve Jobs, you get to report the 29,995 profit as income.

If you buy the $5 TI 99/4A and sell it for $50, you probably could shine
on that amount, if that is all you make. Technically, you should keep books
if you do enough business in this way, and file a schedule C on the results.

I think as an entity backed by a bank, they have to report any single
transaction to the IRS that is $10,000 or more, as do you technically. That
is all the reporting I know of.

Your own bank only reports your interest income, nothing else to the IRS,
on ordinary banking operations. I cant think of anything that paypal is doing
that is reportable compared to a bank, or to a credit card processing
operation (again, no IRS reports) that is unique or regulated.

All the above is my opinion, I have no professional standing to defend this,
but my own experience. I personally operate all sales thru my business
checkbook and account for this, so there is no question in the end what
happened.

Jim

>
> Jay West
>
> ---
> [This E-mail scanned for viruses by Declude Virus]
Received on Wed Nov 05 2003 - 16:07:59 GMT