- Mark as New
- Bookmark
- Subscribe
- Subscribe to RSS Feed
- Permalink
- Report Inappropriate Content
Get your taxes done using TurboTax
Schedule D is the way to go; it is not a business endeavor. Your basis in the items is the original price you paid (or your parents) +/- adjustments. Your parents' items are considered gifts to you and you use the same basis (their cost) for your sale of those items or FMV, depending on whether you have a gain or loss. See basis of gifted property - IRS. $0 is safe, but no need to overpay tax if you have reasonable records of basis.
You owe capital gains tax on any items you made a profit on. And you can't take a loss on any sale of personal items. Keep details of the basis (original costs) amounts in case of an inquiry. You seem to have all of that covered ๐ As long as you pay the gains you owe and do not deduct the losses, you can group things together to reduce your data entry - just make sure you can explain your basis figures if asked.
This FAQ has alternate reporting instructions - I use Schedule D and mark everything as Personal Items, but the net result is the same as long as there are no collectibles.
Here are the instructions for Schedule D reporting. This method requires the desktop software, or Premier Online (or higher). The miscellaneous method used in the FAQ above can be used in Deluxe Online or the desktop software.
I don't usually tell people to do the miscellaneous route because losses get taken when they shouldn't. But as long as you understand that rule, no losses on personal property, you can feel confident using either method - just keep detailed records.
The original purchase price is considered to be what the giver (your parents) โ not you โ paid for it.
If you received a $100 espresso machine as a wedding gift and later sold it for $25, there's nothing to report.
On the other hand, if you sold your espresso machine for $250, you'd report the $150 profit as an investment sale ($250 selling price minus the $100 purchase price paid by the giver).
**Mark the post that answers your question by clicking on "Mark as Best Answer"