You must look at your facts and circumstances to decide if you are actually in the business of buying and selling. The IRS rule for determining if an activity is engaged in for a profit is whether they show a profit three out of every five consecutive years. They will also see if this activity is engaged in for your livelihood, which just means whether this is contributing to that purpose.
It is either a business enterprise or it is the sale of personal property and reported as investment sales. It's not clear from your statement what is creating capital gains. Losses from the sale of personal property is personal use as well. If it is personal use property then losses are not allowed under investment sales.
Any income received for services or goods is taxable. You have to decide if it's a hobby or a business for tax purposes. Review this page from IRS:
Key elements:
- A hobby requires you to report the income you received and under the current tax law, Tax Cuts and Jobs Act (TCJA), no expenses are allowed to be used to reduce the money collected even if you itemize deductions.
- A business allows you to deduct the costs necessary to obtain the income. The law explains that 'you must be engaged in the activity to produce a profit'. The test under IRS is that you must show a profit three out of every five consecutive year.
Please update if you have more questions and one of our tax experts will help.
@HHT
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
