Can I deduct a loss from the sale of an item I sold on ebay if it sold for less that what I paid for it?

[Lisa995]

Is selling items on EBay your business or was this a personal thing you sold?

[vaoaks17]

In 2015 I reached the IRS reporting threshold for ebay sales so I now have to file a schedule c.  I've never done one.  The things I sold on ebay belonged to me and some of the items were new with the price tags on them.  I also have found the same item on ebay selling for more than I sold it for so can I deduct the loss on those items?

[VolvoGirl]

That doesn't sound like self employment income.  Don't see why you have to file schedule C.  And no, you can not take a loss just because you sold it for less than someone else.  A loss is for selling it for less than you paid for it.  But you can not deduct personal losses.

[Coleen3 · Accepted solution]

If you did have a business, you would be purchasing items through your business and reselling them for a profit. The only way you could have a loss is to sell the item for less than you purchased it. Seeing someone else sell the same item for more does not constitute a loss.

If you are selling personal items in ebay, you can't take a loss, even if you sell it for less than you bought it.

[Kurtster]

So I have to pay state taxes on a computer I bought for $3,000 from Best Buy in August and sold for $2,000 in December, as if that's "income," but the fact I lost over $1,000 in those four months on that product isn't considered a loss because it's personal? That is one of the biggest scams ever. Can I write off the additional losses of having to pay income tax on the item I sold at a loss? These reporting laws are seriously broken. 

[Critter]

You are confused...you will report the sale on the tax return Sch D however it will show as a non deductible loss...you pay no taxes on the sale. 

[Carl]

Bottom line is this:

Losses on the sale of personal property are never deductible and never have been. Since you were not self-employed with your own business at the time of the sale, you have no losses to claim.

Generally, even a sole proprietorship has to register as such at the county/city/township level. So if you didn't do that, you can not prove that you were self-employed and "in the business" of buying and re-selling product.