I won a giveaway from a seller on whatnot and sold it on ebay.what is cost of goods for it for taxes
I won a giveaway from a live auction seller from whatnot. It was valued at $60 when i won it and i ended up selling it for 35$ on ebay. Now its income tax season and im calculating gross income. Im trying to figure out what the cost of goods of this item be if i won it for free from someone. My two options i was thinking of was $0 and 60$. $0 because i got it for free and did not purchase it. 60$ based on (FMV) Fair Market Value of the time i won and recieved the item, and it was worth 60 at the time.
4 comments
frommichel
·2 years agoI agree with @lacemaker3 . Also, your COGS should include: sales/promotion fees from eBay, packaging to ship to your buyer, postage to ship to your buyer, and any expenses you had to clean/repair the item.
lacemaker3
·2 years agoThe cost of goods is how much you spent to acquire the item.
As it was a giveaway, that means the purchase cost was zero. If you had to pay any shipping cost or taxes, then the sum of those costs is your cost of goods. You didn't mention having to pay anything at all, so it was probably acquired for zero = cost of goods.
You can't use the fair market value unless you inherited it (which you didn't).
dietsoap
OP2 years agoThank You! I was iffy about the fair market value rule and you cleared it up for me.
mtgraves7984
·2 years agoYour COG is $0.