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rsc1925m
New Member
2 Replies
Laura_CPA
Employee Tax Expert

taxes

Hi RSC1925m,

 

Hope your day is going good :)! If those resale items amount to more than $600, you'll receive a 1099. You'll then have to report it as hobby income or business income depending on the nature of your sale transaction. 

 

If it is a hobby, then the income will be reported on Schedule I, Line 8, not subject to self-employment taxes. You will not be able to claim expenses. If it is a business, then you will report the income on Schedule C along with the related expenses and any net profit, will be subject to self-employment tax. 

 

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Opus 17
Level 15

taxes

Because a 1099-K will probably be issued, you have to deal with this on your tax return, but the 1099-K by itself does not mean the money is taxable.  It depends on what you did to get the money.  

 

You might be selling as a business or a hobby.  Since one of the key factors for treating your income as business income is the desire to make a profit, selling old used items for less than their purchase price is not a business for tax purposes.  However, if you are buying and reselling for a profit, you have a business.  Your taxable income is your sales minus your costs, and one of your costs is the cost for inventory (the items to buy to resell).  You need to list your business activity on a schedule C, where you report your sales income, your costs for inventory, your other costs (shipping, listing fees) and so on.  You pay income tax on the net profit.

 

You will have to first determine if you are a hobby or a business, then go from there. 

*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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