| Discussion Forum: Thread 117670 |
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| | | Author: | 111insanedane  | | Posted: | Aug 7, 2011 20:55 | | Subject: | Optimal CANADIAN selling situation | | Viewed: | 173 times | | Topic: | Suggestions | | Status: | Open | | Vote: | [Yes|No] | |
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| Question for all the Canadian (others if you want to add your $0.02) sellers
out there. For those of you that run your stores as an official business, what
have you done to "minimize" any taxes that you pay? I have wondered if the return
on a retired set sale can be somehow claimed as a capital gain, similar to how
real estate or stocks are taxed when you sell. I am already self employed and
rent out part of our house to get lots of tax deductions from my personal income.
I need to have a conversation with my accountant again one of these days, but
thought I could come to the table with a few ideas from others that have already
figured a few 'tricks' out. Feel free to PM me if you prefer.
Thanks for your time and Happy Building, Brian
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| | | | | Author: | Brettj666 | | Posted: | Aug 8, 2011 08:46 | | Subject: | Re: Optimal CANADIAN selling situation | | Viewed: | 58 times | | Topic: | Suggestions | |
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| In Suggestions, 111insanedane writes:
| | Question for all the Canadian (others if you want to add your $0.02) sellers
out there. For those of you that run your stores as an official business, what
have you done to "minimize" any taxes that you pay? I have wondered if the return
on a retired set sale can be somehow claimed as a capital gain, similar to how
real estate or stocks are taxed when you sell. I am already self employed and
rent out part of our house to get lots of tax deductions from my personal income.
I need to have a conversation with my accountant again one of these days, but
thought I could come to the table with a few ideas from others that have already
figured a few 'tricks' out. Feel free to PM me if you prefer.
Thanks for your time and Happy Building, Brian
|
Lego is not an investment, it's a product.
If you wish to register a business to sell Lego, it's for the buying and reselling
of a product.
Costs are the price you pay, fees you pay to operate (brinklink, paypal, etc)
Revenue is the sale price you get
Tax you collect is a liabillity
I'm sure there is a portion of your mortgage interest/rent to account for space
along with any insurance spent to insure your inventory.
Profit then would be the difference of the sale prices - cost - cost of doing
business.
I think there are different accounting methods you could use though.
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| | | | | Author: | Locutis | | Posted: | Aug 8, 2011 09:07 | | Subject: | Re: Optimal CANADIAN selling situation | | Viewed: | 60 times | | Topic: | Suggestions | |
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| In Suggestions, 111insanedane writes:
| | Question for all the Canadian (others if you want to add your $0.02) sellers
out there. For those of you that run your stores as an official business, what
have you done to "minimize" any taxes that you pay? I have wondered if the return
on a retired set sale can be somehow claimed as a capital gain, similar to how
real estate or stocks are taxed when you sell. I am already self employed and
rent out part of our house to get lots of tax deductions from my personal income.
I need to have a conversation with my accountant again one of these days, but
thought I could come to the table with a few ideas from others that have already
figured a few 'tricks' out. Feel free to PM me if you prefer.
Thanks for your time and Happy Building, Brian
|
If you intend to operate your Lego selling as a business, to claim the "profit"
for income tax, then you also have the ability to deduct portions of mortgage/rent,
utility bills, transportation (ie: mileage), internet usage, PayPal fees, BrickLink
fees, etc. Unless you are operating a severely large operation, I will almost
be certain that your deductions for these expenses will greatly offset the profit
that you make. If you are concerned about being completely transparent and legit,
I don't think CRA cares if you made $1,000 last year selling 26 Lego sets and
1,400 parts on BrickLink, if you did NOT claim your deductions listed above.
If you are audited, I don't think they will be all that concerned.
Now, if you made $10,000 that would be a completely different circumstance.
In my opinion, keeping very close track of all expenses and deductions, and claiming
as a business is too time consuming, and for the very small amount of money I
have made and intend to make (ie: less than $500 per year) I don't bother with
the official part. I realize I could be claiming all sorts of deductions and
expenses in my case, however, I don't want to attract attention or be flagged
for investigation because I keep losing money on my business.
Just my $0.02.
Locutis
Resistance is futile.
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| | | | | Author: | Locutis | | Posted: | Aug 8, 2011 09:10 | | Subject: | Re: Optimal CANADIAN selling situation | | Viewed: | 52 times | | Topic: | Suggestions | |
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| In Suggestions, 111insanedane writes:
| | Question for all the Canadian (others if you want to add your $0.02) sellers
out there. For those of you that run your stores as an official business, what
have you done to "minimize" any taxes that you pay? I have wondered if the return
on a retired set sale can be somehow claimed as a capital gain, similar to how
real estate or stocks are taxed when you sell. I am already self employed and
rent out part of our house to get lots of tax deductions from my personal income.
I need to have a conversation with my accountant again one of these days, but
thought I could come to the table with a few ideas from others that have already
figured a few 'tricks' out. Feel free to PM me if you prefer.
Thanks for your time and Happy Building, Brian
|
I forgot to mention, I do not believe that you can have Capital Gains on something
that isn't a security, like a Lego set. Capital Gains is for things like land,
stocks, bonds, bullion, etc.
If it was personal property that you turned into a profit, the item must net
you more than $1,000 (again, I believe this is the official CRA number, but I
could be wrong, this is what I was told at one time by CRA auditors) in order
to be taxable. In order to be claimable as a Capital Gain, it should have to
be taxable. Therefore, a set you buy for $200 and sell for $500 isn't taxable
or Capital Gains claimable, in my opinion.
Locutis
Resistance is futile.
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| | | | | Author: | NewUsedToronto | | Posted: | Dec 24, 2020 13:25 | | Subject: | Re: Optimal CANADIAN selling situation | | Viewed: | 43 times | | Topic: | Suggestions | |
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| In Suggestions, 111insanedane writes:
| | Question for all the Canadian (others if you want to add your $0.02) sellers
out there. For those of you that run your stores as an official business, what
have you done to "minimize" any taxes that you pay? I have wondered if the return
on a retired set sale can be somehow claimed as a capital gain, similar to how
real estate or stocks are taxed when you sell. I am already self employed and
rent out part of our house to get lots of tax deductions from my personal income.
I need to have a conversation with my accountant again one of these days, but
thought I could come to the table with a few ideas from others that have already
figured a few 'tricks' out. Feel free to PM me if you prefer.
Thanks for your time and Happy Building, Brian
|
For those still searching, here's a good write up:
https://www.cibc.com/content/dam/personal_banking/advice_centre/tax-savings/tax-treatment-collectibles-2014-en.pdf
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Canada, Ontario
