I have been selling some personal belongings on eBay over the past year and have read some of the questions and answers around this. This is not a hobby or business for me as I am not trying to make a profit, but rather recoup some of what I spent to buy something else. I am trying to determine if I am selling the items at a profit or loss, but I have 2 questions regarding this:
1) I am assuming that what I paid for an item includes any sales taxes on the item and any potential shipping cost. Is this correct?
2) To determine my "profit" from selling an item, do I use the amount the item sold for? Or is it the amount that I actually receive after the selling fees and shipping label costs are deducted by eBay?
Right, unless I made a capital gain on the sale. That's what I am trying to figure out.
For example: Say I bought something for $100 new. I sell it a couple years later and it has actually appreciated in value. I sell it for $110. After eBay deducts their fees and subtracts the cost of the shipping label, I receive $85. I paid $100 and sold it for $110 so that appears to be a capital gain of $10. However, if I compare the $100 that I paid for it to the amount I actually receive in my bank account after fees/shipping ($85 in this scenario) I actually have a capital loss of $25.
Just trying to clarify which numbers I use to determine whether I made a gain or loss. That link you sent is very helpful and I will save that as a favorite for tax time - I appreciate your answer!