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Forum|Forum|3 years ago
December 22, 2022
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I sold stuff on ebay aroud 9500. Most of the items sold were given to me free. Facebook or garage sales. Would. COGS. Be $0.00

Best answer by Anonymous_

Unless you are engaged in the trade or business of selling products, the items you sold are capital assets and you have capital gain. Otherwise, the items are inventory and their cost factors in to the COGS.

If the items are capital assets in your hands (which is likely) and you were the donee (i.e., the person who received the items as gifts), then your basis is the donor's basis (the basis of the person(s) who gave you the items).

Regardless, you need to know the basis in your hands in order to calculate a profit or capital gain. If that cannot be determined, you have to use a basis of $0.

Anonymous_Answer

Level 15

Regardless, you need to know the basis in your hands in order to calculate a profit or capital gain. If that cannot be determined, you have to use a basis of $0.

Hal_Al

Level 15

Q. Most of the items sold were given to me free. Would the COGS (cost of goods sold) be $0.00?

A. No (probably). The cost basis, for the recipient of a gift, is the giver's cost basis (typically what they paid for it). However, the cost basis of "found" items is $0.

If you are in the business of acquiring and selling items, items picked up free from garage sales and the internet do have a basis (COGS) of $0.