If I sell clothing items through Poshmark, Tradesy, ThredUp, etc.
1) do I need to complete a 1099
- Is there a certain threshold amount?
- What if I use store credits to purchase goods?
- What if I receive a payout and am payed through Venmo, PayPal, etc?
2) if yes, how should I document items sold if they were purchased years ago and I no longer have a record of the purchase.
Great questions! The financial institution or Venmo, Paypal etc., would be the ones responsible for issuing the 1099K. If you are the seller, you may receive them as your earnings cross that $600 threshold of payment card transactions.
If you are using store credits to purchase additional merchandise, those credits presumably would be in lieu of a refund for merchandise you may have purchased previously, and should be accounted for through cost of goods in your inventory. Even if inventory is sitting around for a few years, it should still be accounted for in your cost of goods. You must generally value inventory at the beginning and end of each tax year to determine your cost of goods sold.
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