If you are saying that you are not in the business of buying selling items, AND this is an isolated situation, then you have a gain or a loss of personal items. Either way, this is not miscellaneous income unless you choose to report the full proceeds your received for the sold items. If you choose that entry method, there is no allowable deduction for expenses of the cost of the items or sales expense.
These companies have received new reporting rules that require they report to the IRS any sales that equal or exceed $600. This means you are issued the Form 1099-K and the IRS receives a copy as well.
If the personal items sales create a taxable gain, then you may be required to file a tax return if you meet the filing requirements. A chart is attached here for your convenience. This income is not subject to self employment tax or considered a business if you are not in an active business to sell purchased products.
The sale of personal items is considered investment income if there is a profit or gain. The gain is determined based on your cost basis in the asset you sold. Purchase price and any sales expense are what is allowed to be used for the cost basis to determine gain or loss. Personal losses are not required to be reported and those losses are not allowed to offset or reduce other taxable income.
- Keep all of your records pertaining to the sales with your tax return.
These are considered investment sales for tax purposes and reported on Schedule D. TurboTax CD/Download and TurboTax Premier Online will handle these transactions. You can use the following link for instructions on how to enter into your tax return.
If you are in the business of buying and selling merchandise then as our awesome Tax Expert @ColeenD3 explained, you must use Schedule C for self employment income.
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
