Is eBAY income taxable? - Yes - read the following - eBay sellers better report their sales in US and Canada and Austalia, etc.

Is eBAY income taxable?  - Yes - read the following - eBay sellers better report their sales in US and Canada and Austalia, etc. - david ingram expert income tax help

david ingram replies:

Yes - no doubt - AND you need records.  In Canada, report the eBay business on schedule T2125.

In the US, use schedule C and 4562

the following bulletin will show that eBay has released ALL its sales records to thr Canadian CRA and if Canada got it, the IRS has absolute access under terms of the US Canada Income Tax Convention.  IT IS CLEARLY TIME FOR A VOLUNTARY DISCLOSURE TAX RETURN IF YOU HAVE NOT BEEN REPORTING EBAY AND CRAIGSLIST SALES OR ANY OF THE OTHER ON-LINE AUCTION SITES.


With a tongue in cheek type of comment, I could suggest that with the millions of eBay sellers, the IRS and CRA will be so busy dealing with eBay people, that there will not be time to go after anyone else.  BUT do not count on it.  This compares to the recent addition of some people at the US border being able to check if a person crossing the border into the US has been filing their US tax returns.  If you are a Canadian doing just a bit of work in the USA, make sure you have filed your US returns -- see the Nov 2001 newsletter for more information on when to file a US tax return and how to make your Canadian Mortgage interest deductible.

 The November newsletter can be found at:


"eBay sellers must declare all income for tax purposes," states Minister Blackburn

Ottawa, Ontario, July 30, 2009... The Honourable Jean?Pierre Blackburn, Minister of National Revenue and Minister of State (Agriculture and Agri-Food), advises Canadians that the income they earn online is taxable.

"Taxpayers should know that the tax laws that apply to traditional commerce apply in the same way to electronic commerce, like eBay selling," said Minister Blackburn. "I strongly encourage eBay sellers, and for that matter, any taxpayer who has not already done so, to correct their tax affairs as soon as possible to avoid penalties or prosecution."

As a result of a Federal Court of Canada decision, eBay Canada has provided the Canada Revenue Agency (CRA) with the names of eBay sellers as well as their contact information and sales records.

The CRA can therefore use this information to determine if the eBay sellers properly reported the income they earned from sales made on eBay. If the CRA determines that an individual or a business did not comply with the tax laws, the CRA will take any necessary action. In addition to paying any outstanding taxes plus interest, consequences may include penalties, as well as legal actions that could result in fines and other imposed sanctions.

"To avoid paying these fines and penalties, taxpayers who have failed to file income tax returns for past years or who have not reported all their income can voluntarily correct their tax situation," stated Minister Blackburn.


In fact, under the Voluntary Disclosures Program (VDP), taxpayers who take the initiative to correct or disclose any information will not be penalized or prosecuted if they make a full disclosure before the CRA starts any audit or other compliance action.


The CRA expects that the audits, based on the information received from eBay, will begin at the end of the summer of 2009. The CRA will then begin contacting eBay sellers to ensure that they have filed all required returns and accurately represented the full scope of their business income. If necessary, it will conduct an in?depth audit to ensure that all taxpayers and businesses pay their taxes.

The CRA will continue to vigorously enforce the provisions of tax laws to ensure that all Canadians pay their taxes, thus ensuring a level playing field for taxpayers who comply with Canada's tax laws. For more information on the VDP, visit the CRA Web site at

This document is also available for download in PDF format.

To get notification by email when news releases, fact sheets, tax tips, and tax alerts are added to our Web site, subscribe to our electronic mailing list. You can also subscribe to the Media room RSS feed.

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