Forums: Discussions for entrepreneurs and small business.

As you mentioned there are thousands of books, at least 5,000.  Many were bought in bulk purchases over the years and many area very old-back to the 1700`s.  It is about as full of range of types and eras as it possibly could be. 

I would be interested in setting up a web page.  In fact my wife has already created one for me to use.  It`s just a matter of me putting it all the books into a digital inventory and posting it. 

Over time, as I sell books I would like to become much more narrow in my focus of subjects.  I would also like to be a "business" to receive the discounts available and not pay the taxes at purchase time of new inventory.

So, is all this thinking right?  Is all this appropriate with a sole proprietorship as mentioned above?  Thanks!

You stated what you would like to do:  Sell your existing inventory of books you bought personally.

You stated what you wanted to do once you sold some books:  Purchase new books, narrowing your subjects, without paying sales tax.

What is your profit motive?  How do you intend to make a profit?  If you do not intend to make a profit, then you are not a business - it`s either a hobby or an online garage sale.




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Gina L. Gwozdz, CPA
http://GLGcpa.com
http://TaxTreasures.com

Sales tax would be paid on the books I sold.  I`m just saying to avoid paying sales tax by the business on the books I add to my inventory.  

That`s fine and that`s what I repeated in my prior post to you.  My question remains......

How do you intend to make a profit?


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Gina L. Gwozdz, CPA
http://GLGcpa.com
http://TaxTreasures.com

You may run into an issue with the IRS if you don`t establish the value of the books at the time of conversion into inventory.  Without a valuation or basis, they will assume that it`s all profit and you will pay income tax on all of it. 

See if you can get a couple of used book stores to make an appraisal for you, and don`t be surprised if they make you an offer for the whole lot.  However, the estimates, especially if they are similar in valuation, would be a pretty substantial cost basis for the IRS.


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Steve Mann
Internet Videographer
MannMade Digital Video
My Email