Need some advice on proper way to handle transactions.

[MinerJohn]

In January of this year I decided to try and turn my hobby into a small business. I buy and sell antiques, collectible, vintage gun parts etc...I sell online, at flea markets and at shows. I also work a full time job. I have not applied for a business license as I want to see the feasibility of doing this. I currently use a book keeping program that automatically tracks all Ebay and PayPal transactions. So the online part is pretty cut and dried. I can also add any expenses and sales to this program manually. My questions come into play when doing shows or making large bulk purchases. This scenario happened two weeks ago.

I traveled to Ohio and purchased a large collection of gun parts, sporting goods etc...I paid $3000 for the entire lot and I have a receipt showing that I paid that amount. Since there were literally thousands of small parts included it would be virtually impossible to inventory every single piece. What is the proper way to list what I bought to tie it to the $3000 receipt to make the tax man happy? Do I give a total number of boxes with an overview of whats in each box and assign a cost to it to get to the $3000? I listed all my expenses involved with the trip and have receipts for hotel, rental truck, fuel, food etc.. I assume I can use these.

This scenario plays itself over and over. If I set up at a show, a person may bring me a large boxfull of whatever. I pay him, write out a receipt as to what I paid and log a general overview of what I purchased.

I'm not trying to cheat the taxman and my intent is to make profit and pay the taxes due. I just want to be sure I'm handling these bulk transactions properly. All input is certainly appreciated.

[Evan]

I paid $3000 for the entire lot and I have a receipt showing that I paid that amount. Since there were literally thousands of small parts included it would be virtually impossible to inventory every single piece. What is the proper way to list what I bought to tie it to the $3000 receipt to make the tax man happy? Do I give a total number of boxes with an overview of whats in each box and assign a cost to it to get to the $3000? I listed all my expenses involved with the trip and have receipts for hotel, rental truck, fuel, food etc.. I assume I can use these.

Your total cost for the items was $3K plus your travel costs. That needs to be divided out however you feel is appropriate. If you know the total count, you could just assign it equally. If you know there were a few bigger items with a higher cost, use that basis. Otherwise, $3K + transit costs (your travel to going there) is small in the grand scheme of things.

All of this is inventory, and now you'll have a cost to assign to an item so when you sell a gun part, you know it's worth X.

[jlee1994848]

In January of this year I decided to try and turn my hobby into a small business. I buy and sell antiques, collectible, vintage gun parts etc...I sell online, at flea markets and at shows. I also work a full time job. I have not applied for a business license as I want to see the feasibility of doing this. I currently use a book keeping program that automatically tracks all Ebay and PayPal transactions. So the online part is pretty cut and dried. I can also add any expenses and sales to this program manually. My questions come into play when doing shows or making large bulk purchases. This scenario happened two weeks ago.

I traveled to Ohio and purchased a large collection of gun parts, sporting goods etc...I paid $3000 for the entire lot and I have a receipt showing that I paid that amount. Since there were literally thousands of small parts included it would be virtually impossible to inventory every single piece. What is the proper way to list what I bought to tie it to the $3000 receipt to make the tax man happy? Do I give a total number of boxes with an overview of whats in each box and assign a cost to it to get to the $3000? I listed all my expenses involved with the trip and have receipts for hotel, rental truck, fuel, food etc.. I assume I can use these.

This scenario plays itself over and over. If I set up at a show, a person may bring me a large boxfull of whatever. I pay him, write out a receipt as to what I paid and log a general overview of what I purchased.

I'm not trying to cheat the taxman and my intent is to make profit and pay the taxes due. I just want to be sure I'm handling these bulk transactions properly. All input is certainly appreciated.

This is a tough one. Assign the cost based on a ratio of the individual sales price would be to the retail value of the entire group. For example suppose you would assign a total sales price for the group an amount of $5,000. You have an individual piece you are selling for $100. $100 divided by $5,000 would be 2%. You could assign a cost to that piece to be $3,000 times 2% or $60. It would be a little bit of work but it would work.

John

[jamesray50]

I currently use a book keeping program that automatically tracks all Ebay and PayPal transactions. So the online part is pretty cut and dried.

Hi John - what bookkeeping program are you using that automatically tracks the transactions? I'm always looking for solutions for various situations. Thanks!

[MinerJohn]

It's an app offered through Ebay that automatically pulls sales, expenses etc from Ebay and PayPal. Godaddy accounting



Hi John - what bookkeeping program are you using that automatically tracks the transactions? I'm always looking for solutions for various situations. Thanks!