Clothing re-sale

[bwool1019]

I have sold some clothes on Poshmark. I am selling for less than original purchase price, yet Poshmark said they need to send me a 1099 form. What is tax implication? How is this reported and am I taxed on the income?

[maureencpa]

Hello, I hope you are having a good day!  Poshmark will be sending the form 1099 to let you know the total that you received during the year from them for the resale of your clothing.  This amount should have any fees charged by them for the sale deducted.  You will need to calculate the total of what you paid for the clothes (that were sold) originally and deduct what is shown on the 1099.  In many cases there will be no profit to you but if  there is you will need to reflect the profit on your tax return.  Please remember that you need to include only the clothes sold, not those that may be waiting to be sold.  If this is something that becomes a full time business you may need to reflect it as such on your tax return.

[jkellett2]

Poshmark is sending you a 1099-NEC because you have sold more than $600 in clothing.  This requires them to provide you with a 1099-NEC form.  You in turn are required to report this income on your tax return for the year the 1099-NEC is issued.  

This income is considered self-employment income and properly reported on your Form 1040, Schedule C.  You should also include any income you made selling clothes or items that is not reported on a 1099-NEC.  

You may deduct any expenses resulting from this activity.  Deductible expenses could include any fees or charges Poshmark deducted from the sales.  Also deductible would be mileage to and from Post Office/UPS to ship the items, fees to ship the items, shipping material, boxes, etc.