The votes are in, at least most of them. Here, in my humble opinion, are some random thoughts on what it all means:
1. Payson Mayor Kenny Evans clearly does not enjoy the widespread support you have been led to believe he has. The opposition needs to identify a candidate early and go after him. And how about a woman. Like maybe Joanie King or Kathy Baas. The unholy alliance between Evans and the Roundup is not acceptable. It's time to step up to the plate.
2. Bullies don't always get their way. Mike Vogel is in jeopardy of losing his seat -- just as Lew Levenson's poll indicated. If he doesn't, hopefully he'll get the message that blatant partisanship (see Bedsworth, Gary) doesn't cut it.
3. Ed Blair could have run stronger had he not worried so much about reaching across ideological lines. He just didn't look right in all those Roundup ads. (If you think they are the voice of the community, just check their circulation numbers.)
4. Fred Carpenter ran a strong and intelligent race -- as we predicted he would.
5. The Vern Leis-Chris Benjamin battle is most interesting. A lot of people still care very much about water in Star Valley. Rarely is a battle fraught with such ideological differences.
6. All in all, the voters in both towns showed they are watching. May the winners take note.
7. And finally, congrats to Paty Henderson, former assistant editor of our beloved Rim Country Gazette. We may not agree politically, but she is living proof that good guys still win -- at least some of the time.
Jim Keyworth
Gazette Blog Editor
MUCH MORE ELECTION COVERAGE BELOW...
Wednesday, March 10, 2010
And the winners are ... still up in the air
Vogel-Carpenter, Leis-Benjamin council races too close to call
By Matt Brabb
Mogollon Connection Editor
It was ladies night on Tuesday in Rim Country as Su Connell and Paty Henderson, running respectively for the Payson and Star Valley Town Councils, were far ahead of their male counterparts in local elections.
Connell attended the election result gathering at Diamond Point Shadows Restaurant in Star Valley as a gesture of good will.
“I’m here because all this feuding and fussing has got to stop,” she said, referring to the difficulties the two towns have had over the years.
Incoming Star Valley Councilor Henderson was equally gracious.
“I am just flattered to have the trust of the people of this town,” she said.
Incumbent Star Valley Mayor Bill Rappaport is comfortably ahead of challenger Randy White, and Payson Mayor Kenny Evans ran unopposed.
The preliminary results for mayoral and council elections were released Tuesday evening, and a few races were too close to call. Some 200 ballots remain to be counted in the Payson election, and an undetermined, but probably small number remain in Star Valley.
Ballots mailed in the last few days for the Star Valley election to the county seat in Globe have yet to be counted. They will be critical as incumbent councilor Vern Leis has a slim, 11 vote lead over challenger Chris Benjamin according to preliminary results.
There is a stark contrast between Benjamin and Leis regarding how best to execute the ongoing negotiations over water rights with the town of Payson. Both would appear to be polarizing figures in the debate; and the candidate who ultimately wins the final council seat is likely to shape the direction of the discussion going forward.
Approximately 400 votes were cast in Star Valley. Rappaport leads White by a margin of 235 to 158. In the race for town council, in which voters were allowed to vote for three of the four candidates running, Henderson leads with 282, followed by Del Newland with 248. Leis tallied 220, while Benjamin trailed with 209.
In the Payson election there was an equally close race between the final two candidates vying for the last available seat on the council. Again, four candidates were running for three seats, and former Payson Town Manager Fred Carpenter has a razor thin 23-vote lead over incumbent Mike Vogel for the final seat.
Connell has a commanding 300 vote lead over Vogel, and Ed Blair leads him by 86 votes. Both margins will be statistically very difficult, if not impossible to overcome with only a couple hundred votes remaining to be counted.
It has been however, an exceptionally close race. All four candidates were voted for on over 50 percent of the ballots received, which negates the possibility of a run off. Connell was voted for on 64 percent of the ballots, Blair 60 percent, and Vogel and Carpenter were in a statistical dead heat at 58 percent.
In raw figures Connell received 3,178 votes, followed by Blair with 2,964. Carpenter garnered 2,901, a mere 23 votes ahead of Vogel at 2,878. A scanty 86 votes separate the three candidates who trail Connell by a substantial margin.
In Payson, Proposition 300, otherwise know as Home Rule was approved by voters by a wide margin, 3,551 to 736. The measure will allow the town to disregard an archaic, state mandated budget formula that would have forced the town to make drastic cuts to basic town services including public safety and water.
In addition, voters overwhelmingly approved the Payson school override by 67 percent. The final count was 3,954 to 1,897.
(See complete election results and photos below.)
By Matt Brabb
Mogollon Connection Editor
It was ladies night on Tuesday in Rim Country as Su Connell and Paty Henderson, running respectively for the Payson and Star Valley Town Councils, were far ahead of their male counterparts in local elections.
Connell attended the election result gathering at Diamond Point Shadows Restaurant in Star Valley as a gesture of good will.
“I’m here because all this feuding and fussing has got to stop,” she said, referring to the difficulties the two towns have had over the years.
Incoming Star Valley Councilor Henderson was equally gracious.
“I am just flattered to have the trust of the people of this town,” she said.
Incumbent Star Valley Mayor Bill Rappaport is comfortably ahead of challenger Randy White, and Payson Mayor Kenny Evans ran unopposed.
The preliminary results for mayoral and council elections were released Tuesday evening, and a few races were too close to call. Some 200 ballots remain to be counted in the Payson election, and an undetermined, but probably small number remain in Star Valley.
Ballots mailed in the last few days for the Star Valley election to the county seat in Globe have yet to be counted. They will be critical as incumbent councilor Vern Leis has a slim, 11 vote lead over challenger Chris Benjamin according to preliminary results.
There is a stark contrast between Benjamin and Leis regarding how best to execute the ongoing negotiations over water rights with the town of Payson. Both would appear to be polarizing figures in the debate; and the candidate who ultimately wins the final council seat is likely to shape the direction of the discussion going forward.
Approximately 400 votes were cast in Star Valley. Rappaport leads White by a margin of 235 to 158. In the race for town council, in which voters were allowed to vote for three of the four candidates running, Henderson leads with 282, followed by Del Newland with 248. Leis tallied 220, while Benjamin trailed with 209.
In the Payson election there was an equally close race between the final two candidates vying for the last available seat on the council. Again, four candidates were running for three seats, and former Payson Town Manager Fred Carpenter has a razor thin 23-vote lead over incumbent Mike Vogel for the final seat.
Connell has a commanding 300 vote lead over Vogel, and Ed Blair leads him by 86 votes. Both margins will be statistically very difficult, if not impossible to overcome with only a couple hundred votes remaining to be counted.
It has been however, an exceptionally close race. All four candidates were voted for on over 50 percent of the ballots received, which negates the possibility of a run off. Connell was voted for on 64 percent of the ballots, Blair 60 percent, and Vogel and Carpenter were in a statistical dead heat at 58 percent.
In raw figures Connell received 3,178 votes, followed by Blair with 2,964. Carpenter garnered 2,901, a mere 23 votes ahead of Vogel at 2,878. A scanty 86 votes separate the three candidates who trail Connell by a substantial margin.
In Payson, Proposition 300, otherwise know as Home Rule was approved by voters by a wide margin, 3,551 to 736. The measure will allow the town to disregard an archaic, state mandated budget formula that would have forced the town to make drastic cuts to basic town services including public safety and water.
In addition, voters overwhelmingly approved the Payson school override by 67 percent. The final count was 3,954 to 1,897.
(See complete election results and photos below.)
Tuesday, March 9, 2010
Both town council races going to the wire
Photo by Jim Keyworth
Bill Rappaport, Paty Henderson and Del Newland celebrated their apparent victories at Diamond Point Shadows Restaurant in Star Valley last night.
With a couple of exceptions (Su Connell and Paty Henderson), the Payson and Star Valley town council races appear too close to call pending the counting of outstanding ballots.
PAYSON ELECTION RESULTS
Surpisingly, incumbent Kenny Evans only received 74 percent of the votes even though he was running unopposed. The rest either wrote in a candidate or didn't vote for mayor.
Kenny Evans 3,708
Write-ins 219
Su Connell is the only sure winner in the council race.
Su Connell 3,178
Ed Blair 2,964
Fred Carpenter 2,901
Mike Vogel 2,878
Home Rule Y-3,551 N-736
Votes left to count: 200
Final tally: 8 a.m. Thursday
STAR VALLEY RESULTS
Bill Rappaport appears to have won the mayoral race, although the number of uncounted ballots is unknown.
Bill Rappaport 235
Randy White 158
Paty Henderson appears to have won a council seat.
Paty Henderson 282
Del Newland 248
Vern Leis 220
Chris Benjamin 209
Votes still out: unknown
Final Results: Thursday or Friday
PUSD BUDGET OVERRIDE
The budget override question passed easier than expected.
Y-3,954 N-1,897
Bill Rappaport, Paty Henderson and Del Newland celebrated their apparent victories at Diamond Point Shadows Restaurant in Star Valley last night.
Photo by Jim Keyworth
A beaming and radiant Su Connell joined the celebrants in Star Valley last night as she awaited the election results. She garnered the most votes of any candidate facing opposition.
With a couple of exceptions (Su Connell and Paty Henderson), the Payson and Star Valley town council races appear too close to call pending the counting of outstanding ballots.
PAYSON ELECTION RESULTS
Surpisingly, incumbent Kenny Evans only received 74 percent of the votes even though he was running unopposed. The rest either wrote in a candidate or didn't vote for mayor.
Kenny Evans 3,708
Write-ins 219
Su Connell is the only sure winner in the council race.
Su Connell 3,178
Ed Blair 2,964
Fred Carpenter 2,901
Mike Vogel 2,878
Home Rule Y-3,551 N-736
Votes left to count: 200
Final tally: 8 a.m. Thursday
STAR VALLEY RESULTS
Bill Rappaport appears to have won the mayoral race, although the number of uncounted ballots is unknown.
Bill Rappaport 235
Randy White 158
Paty Henderson appears to have won a council seat.
Paty Henderson 282
Del Newland 248
Vern Leis 220
Chris Benjamin 209
Votes still out: unknown
Final Results: Thursday or Friday
PUSD BUDGET OVERRIDE
The budget override question passed easier than expected.
Y-3,954 N-1,897
Employee placed on leave over Macho B's death
JUST IN - You read it here first
PHOENIX – The Arizona Game and Fish Department yesterday formally placed one of its employees on administrative leave with pay as a result of an interim finding in the department’s ongoing internal administrative investigation into the events surrounding last year’s capture of the jaguar known as Macho B.
The department took this action based on statements made by the employee during the course of the internal investigation, bringing about a need to consider taking administrative action to resolve concerns raised by the statements.
Under state personnel rules, placing an employee on paid administrative leave relieves the employee of duties, pending a determination on what final administrative action may be taken.
Department officials said the employee’s statements were related to the employee’s actions taken several weeks after the capture, recapture and euthanization of Macho B. The department continues to maintain that it did not direct any department employee to capture a jaguar, and that the department’s actions related to the capture were lawful.
Department officials added that the Game and Fish internal investigation cannot be considered completed until the department has an opportunity to review whatever findings may come out of a concurrent federal investigation being conducted by the U.S. Fish & Wildlife Service.
Information about events related to Macho B can be found at www.azgfd.gov/MachoB.
PHOENIX – The Arizona Game and Fish Department yesterday formally placed one of its employees on administrative leave with pay as a result of an interim finding in the department’s ongoing internal administrative investigation into the events surrounding last year’s capture of the jaguar known as Macho B.
The department took this action based on statements made by the employee during the course of the internal investigation, bringing about a need to consider taking administrative action to resolve concerns raised by the statements.
Under state personnel rules, placing an employee on paid administrative leave relieves the employee of duties, pending a determination on what final administrative action may be taken.
Department officials said the employee’s statements were related to the employee’s actions taken several weeks after the capture, recapture and euthanization of Macho B. The department continues to maintain that it did not direct any department employee to capture a jaguar, and that the department’s actions related to the capture were lawful.
Department officials added that the Game and Fish internal investigation cannot be considered completed until the department has an opportunity to review whatever findings may come out of a concurrent federal investigation being conducted by the U.S. Fish & Wildlife Service.
Information about events related to Macho B can be found at www.azgfd.gov/MachoB.
Nicole Pasternak and friends warm chilly Sunday
Photo by Bing Brown
Vocalist Nicole Pasternak performs at the Payson Friends of Jazz concert Sunday at Community Presbyterian Church. More photos of the rest of the performers will be posted tomorrow. Many thanks to Bing Brown, one of the creative contributors who makes it possible for you to enjoy our free blog.
Photo by Bing Brown
As promised, here is more from last Sunday's jazz concert. Besides Nicole Pasternak, musicians pictured are Lew Turano, piano; and Steve Douglas, bass. Not pictured: The Rim Country's own Gerry Reynolds, drums. The concerts are sponsored by the Payson Friends of Jazz and are held at Community Presbyterian Church, 700 W. Main. The crowd, escaping from the rain and snow, nearly filled the church.
Flight attendant just wants to 'go home now'
I’m sometimes asked if I fly with the same people all the time. Since I have yet to master the art of simple “yes or no” replies, I end up providing way more information than the person expected or, most likely, wanted.
The shortest answer is “I used to but now it’s pretty much different crews every week.” It’s not unusual to have a different set of pilots for every flight and the other flight attendants may end up working only a portion of the pairing with me.
My airline has grown tremendously in the last 25 years and that accounts for the major change in scheduling. When I started, we had one type of airplane so all pilots and flight attendants were qualified to work any flight. Then, we added Dash-8 turbo props, 757s, 747s, Airbus 319s, 320s and 321s.
Pilots are restricted to one type of aircraft, so if the choose to work the 757, they can’t bid a trip on an Airbus. And, while it doesn’t seem to make sense, a Boeing 757 pilot can’t fly the Boeing 737, but our pilots with an Airbus rating can work any of the three Airbus planes.
As a flight attendant, I’m trained on all types of aircraft and no matter what my preference, the company has the right to say, “Oops, your plane isn’t available so we’re going to send you on the one you really, really hate.” (Sorry, off topic and whiney. I’ll explain in a later column).
The other portion of our growth that has a big impact on our schedules is destinations. When we flew to 20 cities, most of us had our favorites and would bid to work those flights each month. My best 737 trip was a Salt Lake City overnight followed by Springfield, Mo., and I had great flight crews for two months in a row.
Downtown Salt Lake is a wonderful area for walking, lots of parks and historical buildings plus a nice variety of restaurants with a few vegetarian options and loads of desserts. In Springfield, we stayed at a Howard Johnson’s with a huge indoor pool and the van driver always had complimentary bags of flavored popcorn for each of us. I actually looked forward to leaving the heat of the Phoenix summer, exercising with an outdoor walk the first day followed by swimming in an almost always-deserted pool the next.
The same parameters made an Airbus trip a favorite of mine. I’d fly to Columbus, Ohio, spend the night, fly to New York and back two days in a row and then fly home on the fourth day. The hotel was just a few blocks from a river walk and also had a pool that no one used during the day.
The same pilots and flight attendants worked with me for a few weeks and, because we had multiple crews staying at the hotel, we got in the habit of getting together for happy hour. The hotel provided free snacks and drinks for two hours and they sat the bar up beside the grand piano in the lobby.
I started bringing sheet music and playing halfway popular songs. Of course, at least one person would get tipsy enough to sing along and my favorite “laugh ‘til I cried” moment was a pilot trying to sing "Stairway to Heaven" while I stumbled through it for the first time.
I’m sorry we don’t do that anymore. Although, like most pleasant memories, there isn’t any way that would be as pleasant now. Now, my focus is on home. The title of my new book is "Can I Go Home Now?" and that’s pretty much sums up my bidding choices.
I don’t look for long overnights in cities that I enjoy exploring. I don’t “buddy bid” with friends I enjoy flying with. The main thing for me is time away from base – the total amount of time from check in on the first day to release on the last, and I usually end up with minimum time in a hotel room.
The FAA rule concerning rest periods is based on the time we leave the plane to the time we return to the plane. The minimum (disregarding the confusing exceptions) is eight hours. No, it doesn’t allow for much sleep. I average about five hours. Even the flight attendants who think this will be enough usually discover it’s not very quickly and trade their trips, so even though I should be flying with the same crew each week, I don’t.
So, there you have the long answer that is so long I’m sure you’ve forgotten the question, which I’m also sure you’re sorry that someone asked.
The shortest answer is “I used to but now it’s pretty much different crews every week.” It’s not unusual to have a different set of pilots for every flight and the other flight attendants may end up working only a portion of the pairing with me.
My airline has grown tremendously in the last 25 years and that accounts for the major change in scheduling. When I started, we had one type of airplane so all pilots and flight attendants were qualified to work any flight. Then, we added Dash-8 turbo props, 757s, 747s, Airbus 319s, 320s and 321s.
Pilots are restricted to one type of aircraft, so if the choose to work the 757, they can’t bid a trip on an Airbus. And, while it doesn’t seem to make sense, a Boeing 757 pilot can’t fly the Boeing 737, but our pilots with an Airbus rating can work any of the three Airbus planes.
As a flight attendant, I’m trained on all types of aircraft and no matter what my preference, the company has the right to say, “Oops, your plane isn’t available so we’re going to send you on the one you really, really hate.” (Sorry, off topic and whiney. I’ll explain in a later column).
The other portion of our growth that has a big impact on our schedules is destinations. When we flew to 20 cities, most of us had our favorites and would bid to work those flights each month. My best 737 trip was a Salt Lake City overnight followed by Springfield, Mo., and I had great flight crews for two months in a row.
Downtown Salt Lake is a wonderful area for walking, lots of parks and historical buildings plus a nice variety of restaurants with a few vegetarian options and loads of desserts. In Springfield, we stayed at a Howard Johnson’s with a huge indoor pool and the van driver always had complimentary bags of flavored popcorn for each of us. I actually looked forward to leaving the heat of the Phoenix summer, exercising with an outdoor walk the first day followed by swimming in an almost always-deserted pool the next.
The same parameters made an Airbus trip a favorite of mine. I’d fly to Columbus, Ohio, spend the night, fly to New York and back two days in a row and then fly home on the fourth day. The hotel was just a few blocks from a river walk and also had a pool that no one used during the day.
The same pilots and flight attendants worked with me for a few weeks and, because we had multiple crews staying at the hotel, we got in the habit of getting together for happy hour. The hotel provided free snacks and drinks for two hours and they sat the bar up beside the grand piano in the lobby.
I started bringing sheet music and playing halfway popular songs. Of course, at least one person would get tipsy enough to sing along and my favorite “laugh ‘til I cried” moment was a pilot trying to sing "Stairway to Heaven" while I stumbled through it for the first time.
I’m sorry we don’t do that anymore. Although, like most pleasant memories, there isn’t any way that would be as pleasant now. Now, my focus is on home. The title of my new book is "Can I Go Home Now?" and that’s pretty much sums up my bidding choices.
I don’t look for long overnights in cities that I enjoy exploring. I don’t “buddy bid” with friends I enjoy flying with. The main thing for me is time away from base – the total amount of time from check in on the first day to release on the last, and I usually end up with minimum time in a hotel room.
The FAA rule concerning rest periods is based on the time we leave the plane to the time we return to the plane. The minimum (disregarding the confusing exceptions) is eight hours. No, it doesn’t allow for much sleep. I average about five hours. Even the flight attendants who think this will be enough usually discover it’s not very quickly and trade their trips, so even though I should be flying with the same crew each week, I don’t.
So, there you have the long answer that is so long I’m sure you’ve forgotten the question, which I’m also sure you’re sorry that someone asked.
How to maximize home business tax benefits
THESE TAXING TIMES
By Debra Speakes
Accountant
(Over the next few weeks, the Rim Country Gazette Blog will run a series of articles on tax preparation topics written by local accountant and tax preparer Debra Speakes, who operates Taxes by Phone! Accounting and Tax Services in Star Valley. Click TAXING TIMES at the right to read the first three articles in the series.)
Today we will talk about small home-based businesses, such as people who sell on the internet.
Many people have the mistaken idea that they only need to report if their sales are over a certain amount. This is not true. There are amounts under which you will not get a 1099, but you still have to report the income. But there are different ways to report that have vastly different tax consequences.
There are four main scenarios I will talk about. Note that for each category, it doesn’t matter if the sales were made online or in person – the tax consequences are the same.
“Garage salers” are people who sell used stuff that they don’t need any more, and they aren’t making any profits – they are incurring a Capital Loss. While technically the proceeds could be reported on Schedule D, the result will always be a loss that cannot be deducted. So whether you report it or not doesn’t really matter much – you won’t owe any taxes anyway and the IRS doesn’t really want to know about it. Stick the $100 in your pocket and don’t worry about it. This is true whether you actually have a garage sale, or sell the stuff online.
“Hobbyists” are people who sell stuff at a profit, but mostly for fun. Maybe you like to crochet, and occasionally sell an afghan on etsy.com. Maybe you like to go to yard sales and look for bargains that you can resell on bonanzle.com. (eBay isn’t the only game in town any more.)
The downside to being a hobbyist is that your income is taxable as “Other Income” on form 1040 but your expenses are a Schedule A deduction, and only up to the amount of your profits. If you take the standard deduction, you can’t get any benefit from the expenses.
The good news is that you don’t have to pay that 15.4% Self Employment tax on your earnings. The bad news is you cannot deduct a net loss connected with a hobby. (The technical term is “hobby engaged in for profit” which only applies if you actually have a profit.)
“Online businesses” are people who are selling online to actually try to make a profit. Some people make their living selling online out of their homes. They buy merchandise, either new from a wholesaler, or used, maybe from yard sales, and resell it for a profit. Resalers should be registered with the state and collect sales tax if they sell to anyone in their own state.
They will fill out a Schedule C and will deduct their expenses and mileage, and likely qualify for a home office deduction. If you keep inventory at your home, the space used will be part of your home office deduction. You will deduct your selling fees, Paypal or credit card fees, postage costs, mileage to the post office or office supply store, and, of course, the cost of the items you sold. You will take depreciation on your computer and desk. You will pay self employment taxes on your net profit and will deduct any overall loss against your other income.
You need to conduct yourself in a businesslike manner, have a business license if required, do proper bookkeeping, and keep your receipts and mileage records. Note that if you have several years of losses, the IRS may decide you are really a hobby, and your net loss will not be deductible. You can find more about this on irs.gov.
“Capital gains” are a fourth possible tax category. If you sell a vintage apple press that cost you $200 at a yard sale 10 years ago that is now worth $500 to an antiques collector, you have a capital gain. You report this sale on Schedule D and pay capital gains tax on the profit. But since you are not in the business of selling antiques, you will not file a Schedule C and will not pay SE taxes on the profit.
So what happens if you lose money on most things and make a big profit on a few things? Can you deduct the losses against the gains? Sorry, no, you can’t. Capital losses on non-business items are not deductible, not even against gains on similar items.
And yes, it’s not fair that you have to pay tax on the gains but can’t claim the losses. But nobody ever said the tax code was fair.
(Debra Speakes is a degreed accountant and tax preparer who operates Taxes By Phone! tax, accounting, and business consulting services in Star Valley. She can be reached at (928) 468-6167.)
By Debra Speakes
Accountant
(Over the next few weeks, the Rim Country Gazette Blog will run a series of articles on tax preparation topics written by local accountant and tax preparer Debra Speakes, who operates Taxes by Phone! Accounting and Tax Services in Star Valley. Click TAXING TIMES at the right to read the first three articles in the series.)
Today we will talk about small home-based businesses, such as people who sell on the internet.
Many people have the mistaken idea that they only need to report if their sales are over a certain amount. This is not true. There are amounts under which you will not get a 1099, but you still have to report the income. But there are different ways to report that have vastly different tax consequences.
There are four main scenarios I will talk about. Note that for each category, it doesn’t matter if the sales were made online or in person – the tax consequences are the same.
“Garage salers” are people who sell used stuff that they don’t need any more, and they aren’t making any profits – they are incurring a Capital Loss. While technically the proceeds could be reported on Schedule D, the result will always be a loss that cannot be deducted. So whether you report it or not doesn’t really matter much – you won’t owe any taxes anyway and the IRS doesn’t really want to know about it. Stick the $100 in your pocket and don’t worry about it. This is true whether you actually have a garage sale, or sell the stuff online.
“Hobbyists” are people who sell stuff at a profit, but mostly for fun. Maybe you like to crochet, and occasionally sell an afghan on etsy.com. Maybe you like to go to yard sales and look for bargains that you can resell on bonanzle.com. (eBay isn’t the only game in town any more.)
The downside to being a hobbyist is that your income is taxable as “Other Income” on form 1040 but your expenses are a Schedule A deduction, and only up to the amount of your profits. If you take the standard deduction, you can’t get any benefit from the expenses.
The good news is that you don’t have to pay that 15.4% Self Employment tax on your earnings. The bad news is you cannot deduct a net loss connected with a hobby. (The technical term is “hobby engaged in for profit” which only applies if you actually have a profit.)
“Online businesses” are people who are selling online to actually try to make a profit. Some people make their living selling online out of their homes. They buy merchandise, either new from a wholesaler, or used, maybe from yard sales, and resell it for a profit. Resalers should be registered with the state and collect sales tax if they sell to anyone in their own state.
They will fill out a Schedule C and will deduct their expenses and mileage, and likely qualify for a home office deduction. If you keep inventory at your home, the space used will be part of your home office deduction. You will deduct your selling fees, Paypal or credit card fees, postage costs, mileage to the post office or office supply store, and, of course, the cost of the items you sold. You will take depreciation on your computer and desk. You will pay self employment taxes on your net profit and will deduct any overall loss against your other income.
You need to conduct yourself in a businesslike manner, have a business license if required, do proper bookkeeping, and keep your receipts and mileage records. Note that if you have several years of losses, the IRS may decide you are really a hobby, and your net loss will not be deductible. You can find more about this on irs.gov.
“Capital gains” are a fourth possible tax category. If you sell a vintage apple press that cost you $200 at a yard sale 10 years ago that is now worth $500 to an antiques collector, you have a capital gain. You report this sale on Schedule D and pay capital gains tax on the profit. But since you are not in the business of selling antiques, you will not file a Schedule C and will not pay SE taxes on the profit.
So what happens if you lose money on most things and make a big profit on a few things? Can you deduct the losses against the gains? Sorry, no, you can’t. Capital losses on non-business items are not deductible, not even against gains on similar items.
And yes, it’s not fair that you have to pay tax on the gains but can’t claim the losses. But nobody ever said the tax code was fair.
(Debra Speakes is a degreed accountant and tax preparer who operates Taxes By Phone! tax, accounting, and business consulting services in Star Valley. She can be reached at (928) 468-6167.)
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