Most of the time, personally-owned stuff like cars, appliances, clothing, furniture, and other household items decrease in value after the initial purchase. If you later sell them, it's almost always for less than what you paid, so there's no gain to report. There's also no loss. The IRS won't let you deduct losses on personal items.
Here's an example: you purchased a vintage nut grinder for $5 in 1972 and recently sold it on eBay for $75. You'd have to report the $70 profit as an investment sale.
What about selling a gift? Or something I got for free?
The original purchase price is considered to be what the giver — not you — 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).
Related Information:
Your state tax information is pulled from your federal return. And if it is not a taxable transaction, you have nothing to report. If you are not required to report the sales, keep your records in case of an inquiry. If this is a business or a hobby as opposed to an online yard sale of personal items, you should report the income. As a business, your expenses are deductible. As a hobby, expenses are not deductible.
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