How do you file IRS taxes on sales when you're selling Used Items at far less than their value?

[vintageattictreasures]

I don't profit from my sales.  Items are sold at a loss from their original value.

[gosimus]

@vintageattictreasures 

< I don't profit from my sales. Items are sold at a loss from their original value. >    

The amount that you deduct to reduce your total taxable income isn't based on the item's original value.  It's based on how much you paid for it.  The concept is basic.  You would benefit from consulting with a tax professional.  

[vintageattictreasures]

Sorry, I was unclear.  I should have said, "For far less than I paid for it".

[gosimus · Accepted solution]

@vintageattictreasures 

< For far less than I paid for it >     

You had the right idea when you said you don't profit from your sales.  Income tax is paid on the profit.  No profit, no tax.  You have to claim the income, but when the expense of your purchase exceeds your income from the sale, there's no tax due.  The catch is, eBay reports your income from the sale, but you yourself are obligated to offset it with the expense.  Some sellers are able to do it on IRS Schedule C but I can't advise about that.  I think it would be be cost-effective for you to get professional help. 

[vintageattictreasures]

Thanks so much!   Schedule C has lines for "Cost of Goods Sold" so considering that this would more than offset the total sales I'm guessing it would simply be a matter of Reporting Sales... without using their Cost to offset our total tax burden since we now use the 1040SR.