For personal items sold in a garage sale type sale:
If you made a profit - it is reported as an investment sale and you may have to pay tax, but only on the gain. Where do I enter investment sales?
If you did not make any money off the sales of personal items, you don't have to report the sales. It is not considered taxable income on the federal or state return. If you sold something for $100 that you originally purchased for $150 - there is no income. When the state says you have to report income over $600, they are talking about taxable income. In this example, you have no income, you do have a loss, but it is not deductible. The easiest way to handle a loss on personal items sold is to not report the sale and keep detailed records of the costs and sales prices of the items in the unlikely event you receive an inquiry. As long as you keep your records, you do not need to enter the sales.
If you are going to opt to report the 1099-K, as misc. income entry, the negative entry needs to be for the exact amount you entered for the 1099-K. This is because if the sale generates a loss, it is not deductible and if you take it, you are definitely going to get an inquiry and probably a tax bill. And if there is a gain, you should report it as an investment sale as those are taxed differently than misc. income.
Do I have to report personal items that I sold? @Suzanne1801a @jackie9997
For selling all other items (not a garage sale type transaction) A Tax Filing Factsheet for eBay Sellers - you can't deduct hobby sales expenses.
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