I've been selling items, mostly used albums and CDs, on EBay for about 3 years. I know that next year I'll get a 1099, and I grossed enough last year ($13,000) that I should be paying something. But I can't find information regarding how to determine my costs, or if I need to claim income on used goods. Can you help me?
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Yes. If you are selling your own personal items and if you sell them for less than what you paid for them, a personal loss is not allowed to be used. For these items there is nothing to report. Keep a record of everything you sell so that you have the detail if some of the money isn't required to be reported. The money transfer agents only know the money they sent to you.
The cost is what you actually paid for the items you are selling. You may be able to find your original estimated costs by trying to search on various platforms. One example is the Goodwill Donation Guide.
If you are purchasing items and then reselling them for more than you paid for them this is always going to be a taxable event. Depending on your situation it will be reported as an investment sale or self employment or hobby income.
You can decide if it is hobby or business income. This IRS link will help you: Business or Hobby?
Key elements:
Once you decide what type of income this is you can use the links below to see how to report.
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