It depends. The question you need to resolve is what is your basis in the toys you sold. When COGS equals the gross proceeds amount on your 1099, there will be no gain on the sale. A no gain on the sale is acceptable on a tax return as long as it is accurate. The best practice then is to take reasonable efforts to ensure the sales are accurately reported.
If your old toy collection is personal use property, then any gain is taxable income and is reported on your tax return. A loss on the sale of personal use property is also reported on a tax return; however, it is not deductible at all. Personal use property is anything that you use for your enjoyment. It can include things such as appliances, cars, art, and toys.
Investment property is different in that investment property is purchased with the express intent to profit from its sale. Thus, you will need to decide whether your old toy collection represents personal use property or investment property. If the latter, then gain is reported as capital gain, and losses are reported as capital losses. Short-term and long-term categories apply to investment property.
Given that there are no receipts, have you tried searching on-line for pricing information for the toys? Another option might be to find historical pricing for similar toys. Lastly, if the manufacturer is still in business, you might inquire with that company for any historical pricing data they might be able to provide.
@Gramma502
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