How do I pay taxes on things that I sold that I purchased with cash?

Update:

I have an online business on Ebay. I purchase my inventory with cash and make a pretty hefty profit on it. The problem is that I have no idea how to show my proof of how much profit I made since I don t have any receipts of the purchases that I made since i buy my inventory with cash. What can I do to pay taxes for these items that I sell online? My supplier only accepts so I don't have a choice on getting receipts.

4 Answers

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  • Judy
    Lv 7
    2 years ago

    You track what you paid for each item.

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  • 2 years ago

    Contact a CPA LAST YEAR. You ABSOLUTELY MUST learn to keep proper records.

    As things stand, the IRS will not dispute claiming 100% of your gross revenue as profit.

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  • 2 years ago

    What state?

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  • NA
    Lv 7
    2 years ago

    No receipts means no deduction when audited.

    When paying cash, you keep a log of what you purchased as well as proof of other expenses. You can only deduct the cost of the inventory you actually sold.

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