Since your sales were reported on a 1099-K and the IRS receives a copy, you will need to report the sale of your used clothing on Ebay. However, you can "zero out" the income since you sold the clothing for less than you originally paid, so it won't affect your taxes.
Enter it under Wages & Income tab at the top:
- Scroll down and click Start next to Miscellaneous
Income
- Choose Other reportable income
- Answer Yes to "Any
Other Taxable Income?"
- Under Description put "1099-K Personal Property Sales "
- Enter the amount from the 1099-K in the
next box and click continue
- Click on "add
another income item",
- Under Description this time put "1099-K Cost
of Personal Property"
- Enter the same amount
but as a NEGATIVE number.
- On the Other
Miscellaneous Income Summary make sure you see the 2 items, one positive
and one negative and Total is $0.
Note: The IRS will not allow you
to deduct a loss on personal items that you sell.
