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Kempenme20
New Member

1099-K

I'm selling items on ebay but I don't know the value I originally purchased the items for. How does this affect my taxes. I can't guarantee I didn't spend more on the items previously but I can't say I spent less. Also, I'm not an LLC or business, just someone selling items on the side. 

3 Replies
KarenP12
Employee Tax Expert

1099-K

@Kempenme20   

The IRS would like you to use regular receipts if you possibly have them, but in your case they do not seem to be available. 

 

Here is an article about selling information on e-Bay to distinguish if you are selling it as a business or as a hobby, it sounds like you are a hobby, but double check using these rules.

https://turbotax.intuit.com/tax-tips/self-employment-taxes/a-tax-filing-factsheet-for-ebay-sellers/L...

 

Here is an article that will help you if you did make a profit on a personal item and how to report it if you are not running this like a business:

https://ttlc.intuit.com/turbotax-support/en-us/help-article/sales-logistics/report-personal-items-so...

 

The other thing to consider if you are selling an item that you purchased and used for a business (small business, rental activity, partnership or S-Corp), if so was the item depreciated.  The basis of the product will be reduced by the depreciation or the bonus depreciation or the Section 179 depreciation.

 

If you are selling clothes from your closet that weren't used for a business, any items that are sold below what you paid for them or their value when you inherited them can be treated as non-income, but since they were personal items you can't take the loss.  Any items you know you are selling for a gain need to be reported, see the article above.  The remaining articles you will need to do as much research as you can as to what the actual purchase price was.  If it is an expensive item, you will need to seek an appraisal.

EricE_CPA
Employee Tax Expert

1099-K

If you have ZERO as the cost basis, the total sales price would be considered your taxable gain.

 

Recommend you find the Fair Market Value of those items from the date you purchased them.

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Opus 17
Level 15

1099-K

Selling tangible personal property is a capital transaction reported on form 8489 and schedule D.  If you sell for more than your cost basis, you have a capital gain.  If you sell for less than your basis, you have a capital loss.  However, capital losses on personal property are not deductible and do not offset your gains.  So if you sell 10 items with a combined loss of $1000 and one item with a gain of $10, you have a $10 capital gain.  

 

You need a spreadsheet listing your items with a description, date purchased, cost when new, date sold, and selling price.  If you don't have receipts, make your best guess and hope you aren't audited.  Without proof of your cost, the IRS would be allowed to disallow your costs and declare the entire proceeds as taxable income.  A listing made at the time of sale is better than nothing, but not as good as receipts.  

 

Basically, do the best you can.  The more complete and businesslike your records, the more the likely auditor is to cut you some slack if some of your items are less-well documented.  Keeping your listings may help as well, if you are listing items as used, that will help to establish they were your previously purchased used items.  Without good records, you have to hope not to get unlucky, and do the best you can. 

*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*
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