mam98031 • Volunteer Community Member • Buyer/Seller since 1999
@estatesalegal wrote:I had a professional tax company help me prepare my taxes last year . There was no place on the form that we filed that allowed for me to deduct my "used" goods that I was trying to sell from the gross profits. The woman even called her supervisor to ask her. For example, I sold used 2 chairs and a rug at about 1/3 of the original cost for $1000. It was taxed as income . I do not have the original receipts on 20 year old furniture just photos and description. All of the items I sold were taxable new and old. And then I was told to pay the social security benefit as a self employed person running a business..... If anyone knows where to deduct their old items on the forms, please share. I guess we have to go back to yards sales and cash for those items if we don't want them taxed.
That is likely because you can not "deduct" losses from selling your personal items.
While receipts can be very useful, it is important to remember that most things that are 20 years old are not worth what you originally bought them for, nor should they be. You had 20 years of use of the item too.
@ukfan4sure! wrote:Doubt those "thousands of auditors" will be doing anything but causing more work for the seasoned auditors who have to go back and correct their mistakes. You cannot bring that many people on board that quickly and expect success.
I have no idea of the inter workings of the IRS or what their hiring practices are. So I don't know how to comment on what you've stated. Maybe it is right and maybe it is wrong. I simply don't know.
@espresso_warehouse wrote:
@backhomeoutdoorz wrote:I sell mostly used clothes on ebay. These are clothes that my family has worn and I sell at a loss. The majority of these clothes I do not have receipts for. How will this work moving forward when sales are reported? Will the IRS accept my report that I made no money on these without proof? I don't understand how this will work for the non-business people on here without getting screwed.
If you get a 1099k, congrats, you are a sole proprietor. Fill out a schedule C and take other deductions. You can use your best guess on cost basis, but it's going to be a loss, right? So IRS isn't going to bother.
If you don't get a 1099 and it's all household items you sold at a loss then no reason to claim it on your taxes at all.
Apart from entities and EIN, are there other options?
NO. Not unless you want to tempt IRS to audit you. That is terrible advice. If you get a 1099K, it better appear somewhere on your Federal Tax Return. Whether or not your had taxable income is a separate issue. If you get a 1099K you need to represent it on your tax returns.
IRS doesn't know if it is taxable income or non taxable income until you tell them. And the way you tell them is with your Federal Tax return.
@backhomeoutdoorz and others that sell clothes you no longer need or just stuff around the house, in the future try to remember to keep your receipts somewhere. But for the things you sold in 2021 but need to come of with a receipt, you may want to consider the information in the below links. IRS does accept current values.
https://www.bankrate.com/taxes/donation-value-guide/
Sorry, I misunderstood. My bad, I overlooked the word "don't". That is on me. My apologies, you are absolutely correct.
@reallynicestamps wrote:These are clothes that my family has worn and I sell at a loss.
You used the clothes and no longer want them.
Their value is zero. You used up the value before your decided to sell them.
If you had receipts and were selling at a profit, that would be of more interest to the taxman.
Shirt cost $100 at retail. Worn for a year. Washed ten times. Value $0. Asking Price $10 (or $25).
Shirt cost $100 at liquidation outlet. New with tags. Value $100. Asking Price $125.
See the difference?
You are assuming that the item would still be worth today what it was when you bought it and that isn't true about very many things. The value of the item is NOT the original price paid. It would be the original price paid less depreciation for usage to arrive at what it is worth today.
So it might work out a bit better to look at the link to the donation guide I posted a couple posts back.
