Attn: Canadian Coin Sellers Who Sell On Ebay

Kuh,

Thanks for that. Will look into it.......

purelywasted............I totally agree.

If you're under the threshold, why create more paper work?

But just to be clear, if you're over the 30K selling limit (in ONT) you must have an HST registration and charge HST on your sales.

You don't have a choice.

Yes, claim $3000 as "other income" on your annual taxes....

Yes claiming $3000 as other income would have to be your net profit. Where as the GST/HST registration limit is based solely on gross revenue very easy to reach that number.

If you sell $3000. worth of coins in a year , you do not have to record that as income on your taxes.
The way I understand it, and I just went over all this with my accountant last week is,,,
If you buy and sell a coin for under $1000. there is nothing to report. It's considered personal property. Ex. buy for 600. sell for 800. you do not have charge GST, HST, or even claim the profit. My understanding is:

If you buy and sell a coin, buy $600. sell $1200. Then you have to report above 1000. as capital gains. So 200. bucks. and then that even gets taken down more, I think 50%.,, so really , the taxable income is $100. Not including any fees, like ebay, and paypal that could reduce your net profit. And I think you are taxed at your income level rate.

If you buy a coin for $1800. and sell for $1500. then you can claim a capital loss, against any gains.

If all your coin purchases are under $1000. and sales under $1000. and the amount of transactions very low, then its not considered a biz.

If you have many coins, and are selling many, (I Don't know how many is many) then CRA can consider it a biz, in which you have to charge GST and perhaps PST.

If you are selling over $30k per year , then GST is required.

I too had plans on selling under the 30k mark, without charging GST, until I met with my accountant. The advantage of selling coins without charging taxes, does hurt the legitimate coin sellers with an unfair selling target. ex. $1200. or $1200. + TAX

One should keep all the receipts of coins purchases. You never know when a hobby can turn into a home based biz. A separate bank account, separate visa card makes is easy for any bookkeeper to properly keep track of it all for you, should you decide to go into biz.

If you're gonna do it, might as well do it right. Cashless society coming, and everything will be traceable at some point.

It's not exactly opposing statements just different situations. 1947ML is describing selling $3000 dollars worth of coins, that's revenue, considering ebay fees even if you paid nothing for the coins that would not equal $3000 net profit(the net profit is all that matters in taxation except for the sales tax). Everything he says is correct with the $1000 limit as well as the claiming the capital losses, this is because coins and the like fall under the category of listed personal property(LPP) and losses can only be claimed against other LPP.
The problem with this is that is for individuals. The question as it stands is when do you become a business and is the only false statement 1947ML made("If all your coin purchases are under $1000. and sales under $1000. and the amount of transactions very low, then its not considered a biz." ) this is simply not true as there is no set transaction limit, revenue amount that can tell you this, it is left as vague wording so that people do claim amounts and pay taxes. Incase you didn't know CRA defines a business as "an activity where there is a reasonable expectation of profit and there is evidence to support that intention". Registering for GST/PST/HST is different in the fact that there is a clear set limit on revenue in which you need to be registered for.
The key for any of this is keeping good records, whether you have a tax program or an accountant both can easily walk you through this if you have all your information available. Honestly nothing here is very complicated it's just very dependent on your individual situation. A person who made $3000 net profit on $4000 revenue is in a completely different situation then a person who made $3000 net profit on $27000 revenue as one is clearly more likely considered a business then the other.

Hope this clears things up a bit and I will leave with a small example for an individual as I find those more clear.

I buy a coin as individual for $800. I later sell the coin on ebay for $1500 on ebay. ebay takes 10%, paypal takes 2.9%+.3 and it costs me $30 to ship and insure. 1500-(1500*0.129+0.3)-30= 1276.2. Because of the LPP limit we would then go 1276.2-1000=276.20 this falls under capital gains so when tax times rolls around you would owe on 276.20/2=138.10. This means whatever tax bracket you are personally in you would pay that percentage on $138.10

The above 2 explanations do help me understand..

....so thanks for adding these extra comments..

LPP (capital gains) or small business, the decision is not yours, if you're audited by the CRA.

It is THEIR decision.

The CRA will choose the one which gives them the most tax revenue from you.