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:
- A hobby requires you to report the income you received and under the current tax law, Tax Cuts and Jobs Act (TCJA), no expenses are allowed to be used to reduce the money collected even if you itemize deductions.
- A business allows you to deduct the costs necessary to obtain the income. The law explains that 'you must be engaged in the activity to produce a profit'. The test under IRS tax law is that you must show a profit three out of every five consecutive years to be considered a business.
Once you decide what type of income this is you can use the links below to see how to report.
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