Question

Your client Mary Sue is the owner of The Gadget Store. In 2018, she started selling a wide range of her kitchen gadgets on e-Bay. Since these online transactions are conducted on the internet between her and the bidder, she has decided not to include these sales in her gross income when she files her tax return in early 2019. Is your client correct?

Answer 1

Your client is incorrect. Income from online sales should be included in the gross income for tax purposes, according to the IRS.

Step-by-step explanation:

Your client is incorrect. Even though the transactions are conducted online, they are still considered taxable income and should be included in her gross income for tax purposes. The Internal Revenue Service (IRS) requires individuals to report all income, including income from online sales.

To support this, you can cite the IRS's definition of gross income, which includes income from all sources, unless exempted by law. Selling items on e-Bay falls under the category of business income, and therefore should be included in the tax return.

It is important for Mary Sue to consult with a tax professional who can provide accurate advice and guide her through the process of reporting her income correctly to avoid potential penalties or issues with the IRS.