How do I report income on something I sold (received a new item for free, and sold it on eBay)

Go to 

Wages & Income

Investment Income

Stocks, Cryptocurrency, Mutual Funds, Bonds, Other 

Select "Add an investment" if necessary

Select "Skip import" if necessary 

Select "Other" for investment type

 

Enter what you sold it for (sale proceeds) the date when you got it and the cost basis

usually the cost basis is what you paid to buy it. 

 

The profit will be capital gain income. 

 

If you receive items to review and then sell those same items on E-Bay, you may need to report this as a business.

HERE is a link to a similar question with details on how to report that.  

Hm, thanks for the reply. But I'm confused why this would be investment income. A family member got this item as a gift from work, and then I sold it on my eBay account. Does that change anything?

It may seem far-fetched to call a personal sale as an investment, but that is the section this type of income is determined. 

It isn't earned wages or self-employment. 

It isn't Interest you earned on a savings account.

It's "Capital Gain" when you sell something and the money get for selling that item is more than what you paid for it. 

 

People don't report these sales often, because usually the items they sell, sell for less than what they paid to purchase the item, such as when people have garage sales. 

But when something is sold and results in a gain, the IRS wants their share. 

 

If the value of the gift from work was included in this person's income (included in wages) then you can use that amount as the cost/basis/value in order to compute the gain (or loss). 

If the gift was something worth $100, and $100 was added as wages in Box 1 of that person's W-2, only a sale of more than $100 would be reported as a gain. 

Thanks for the explanation.

 

In my case, the item was a small electronic speaker (retails for less than $50) that my family member received (along with every other employee) at a work party. I don't believe this item was part of my family member's income or W2.

 

I'm assuming then the cost basis is $0 correct?

Yes, the cost basis would be $0 in this case.  

Thank you both!

Sorry for another question.

 

What should I put for this question? Myself or eBay?

 

"Enter the name of the person or financial institution that brokered this sale"

I would use eBay, but what matters the most here is that you use something that allows you to be prompted to remember what this transaction refers to in the unlikely event that you are asked to show support for the numbers.