Your tax professional may also be able to offer a way to get around treating the money as “income” since actually it was not YOUR income, it just passed through you on its way to your Consignor. At the very least, I WOULD THINK (again, ask the Tax pro) , since you had to pay your Consignor, you may be able to claim what you paid as an “EXPENSE” that will cancel out “Income,” making it balance out at $0, except for the amount you kept as an AGENT’s fee for being a middle man doing the selling.

Yes, indeedy, a Consignor is required by law to report the income s/he received from selling items, regardless of how they were sold, just like any other kind of money they acquired. But someone else’s tax reporting isn’t your concern. Just make sure your own records are squeaky complete.

“Just remember to always get everything in writing, and to spell everything out. You want no confusion between you and the person whom you are selling the items for. Make sure to go over the whole thing with them, and make sure they understand the monetary break down (the costs and breakdown of profits) before you ever agree to sell anything for them.”

says pretty much everything. Except it doesn’t. It only addresses the BEGINNING. In addition to a signed contract to sell and remit funds to your consignors, the Professor says NOTHING about covering your own behind when you finish the deal with your consignor (documenting where the money went after the sale(s) was accomplished). You need to have a written form which should include a line for each item, short name or description or refer to its info on the original contract, where it sold, sale number/info if applicable, how much it sold for. You might also want the Consignor to initial it when you give him/her the funds. Be sure to keep a copy. That form should document what income you received from the deal and what you gave your consignor. Your consignor gets to take care of handling his/her own income.