I got a 1099-k from paypal and i only sell personal items on ebay.
In income, self employment it ask about the value of my inventory at the beginning of 2020 and end of 2020
Would i enter the original price i paid for the items i sold on ebay? and then $0 for the end of 2020 since i sold them?
Am i even in the right place? 🙂
Thanks for the help.
You'll need to sign in or create an account to connect with an expert.
If it is just an occasional sale of an item or two I would not report it, however, review the eBay fact sheet below to determine your status.
You can find almost anything for sale on eBay, from a piece of fine art to clippings of Justin Bieber’s hair. So it's no surprise that the IRS doesn't view all sellers alike in the online marketplace. You may not have to pay tax at all if you are essentially hosting an online garage sale, but if you run your eBay account more like a business, you should be reporting your sales to the IRS.
Not every eBay sale is subject to income tax, but most are. If you use the site to get rid of household articles you've used in the past, you may qualify for "occasional garage or yard sale" treatment. According to the IRS, if your online auction sales are the Internet equivalent of an occasional garage or yard sale, you generally do not have to report income from those sales.
Assuming that you originally bought the used items for more money than you are selling them for, you don't have to report the income received from the eBay sale. For example, if you sell a bicycle that you paid $500 for two years ago for $350 on eBay, you usually don't have to notify the IRS—but you can't claim a loss on it.
Hobby sales must be reported
If you and the IRS classify your eBay sales as a hobby, you'll have to report the income on Form 1040. For tax years prior to 2018, you report your expenses are an itemize deduction on Schedule A. Beginning in 2018, you are no longer eligible to take a deduction for hobby expenses.
Since you cannot use hobby expenses to reduce your hobby income, you won't be able to use a loss from hobby sales to reduce other income. This can be important if you make money in other activities.
However, if your eBay activities are considered a business, you can use your loss as a deduction to reduce your other business income, say from landscaping. For example, let’s say that you have:
Distinguishing between a hobby and a business is not an exact science. The IRS looks to many factors including:
If you make more than $20,000 in gross sales and have 200 or more transactions on eBay, you should receive a 1099-K form reporting this income to the IRS.
Using eBay to make profits is a business
If you sell and buy articles on eBay in order to earn money, the IRS will likely classify your sales activities as a business. This means you will have to report net income from eBay sales. Report your total gross income on Schedule C, then reduce it to net income by subtracting the amounts you spent for allowable business-related expenses.
For example, if your income is $45,000 and you have “business-related expenses” that total $10,000:
Business tax deductions for eBay sellers
The only tax deductions you can use to reduce your gross eBay sales income are those authorized by the IRS, but you'll have quite a few to choose from. Consider whether you qualify for:
If you're still unsure if something is deductible, check out a more comprehensive list of common small business expenses.
Your industry-specific deductions reviewed by a tax expert
Get live advice from a tax expert to find industry-specific deductions and get a final review of your return with TurboTax Live Self-Employed.
I sell 10-20 personal items a year on ebay and end up getting a few thousand from it. I buy the items new and have the receipts. I'm in a state that says over $600 needs to be reported.
If i bought a iPad Pro two years ago new for $1200 and sold it on ebay in 2020 for $600 can you claim that as a loss? Most all of the items i sell are that way.
The 1099-k from paypal includes shipping, sales tax as income how do i deducted that? There are also seller fees, paypal fees.
I do work for a employer 9-5 if that matters.
Thanks
Most of the time, personally-owned stuff like cars, appliances, clothing, furniture, and other household items decrease in value after the initial purchase. If you later sell them, it's almost always for less than what you paid, so there's no gain to report. There's also no loss. The IRS won't let you deduct losses on personal items.
Here's an example: you purchased a vintage nut grinder for $5 in 1972 and recently sold it on eBay for $75. You'd have to report the $70 profit as an investment sale.
What about selling a gift? Or something I got for free?
The original purchase price is considered to be what the giver — not you — paid for it. If you received a $100 espresso machine as a wedding gift and later sold it for $25, there's nothing to report.
On the other hand, if you sold your espresso machine for $250, you'd report the $150 profit as an investment sale ($250 selling price minus the $100 purchase price paid by the giver).
Related Information:
Your state tax information is pulled from your federal return. And if it is not a taxable transaction, you have nothing to report. If you are not required to report the sales, keep your records in case of an inquiry. If this is a business or a hobby as opposed to an online yard sale of personal items, you should report the income. As a business, your expenses are deductible. As a hobby, expenses are not deductible.
If there is no gain to report how do i file the 1099-k?
If it is for personal items that you sold for no gain - you have two choices:
Still have questions?
Make a postAsk questions and learn more about your taxes and finances.
nate32lawless
New Member
lorrainehatcher
New Member
Cris
Level 3
mybhatt10
New Member
seanjoe
New Member
Did the information on this page answer your question?
You have clicked a link to a site outside of the TurboTax Community. By clicking "Continue", you will leave the Community and be taken to that site instead.