eBay

backhomeoutdoorz · ‎12-02-2021

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.

keynesguy · ‎02-16-2022

First, if these are sales of used personal goods, eg., your old chair or blue 42L blazer you've outgrown, you should not enter $150 basis on you schedule D. Enter what you sold it for, for a net gain of $0. As for the receipts: there is no explicit requirement for a receipt. IRS knows most people don't keep receipts for stuff like that. Do keep regular records of what you paid whenever you sell something, according to your best and honest recollection. If you do have receipts, of course, keep them too. Regularly kept records establish credibility. Do it now, not after you get an audit letter.

liawrig.nq8rdwqa3 · ‎02-17-2022

@mam98031 wrote:
@wildpitchsports wrote:
@liawrig.nq8rdwqa3 wrote:
But, if you're going to sell old clothing "at a loss" then you should be selling at a flea market. Or consign your clothing. That way you don't have to deal with 1099s.
Exactly or a garage sale where cash is king. That way the government can't get any more than they already do. This change will WRECK millions of sellers.
Except not everyone can hold a garage sale or have access to a flea market. While others are disabled and even if these options are available in their area, they are able to take advantage of it. Others get a better price selling here and the reasons go on. We aren't all alike and we all don't have the same needs. We are a very diverse community.

I don't know where you live. I live in Chicago and you can setup a garage sale in the winter time. There are inside flea markets in my area. Of course you have to pay for space. But the OP can also advertise locally and sell from their house. If he's selling at a loss then he's paying fees to do that.

liawrig.nq8rdwqa3 · ‎02-17-2022

John, those are "vintage" items you describe.

mam98031 · ‎02-17-2022

@liawrig.nq8rdwqa3 wrote:
@mam98031 wrote:
@wildpitchsports wrote:
@liawrig.nq8rdwqa3 wrote:
But, if you're going to sell old clothing "at a loss" then you should be selling at a flea market. Or consign your clothing. That way you don't have to deal with 1099s.
Exactly or a garage sale where cash is king. That way the government can't get any more than they already do. This change will WRECK millions of sellers.
Except not everyone can hold a garage sale or have access to a flea market. While others are disabled and even if these options are available in their area, they are able to take advantage of it. Others get a better price selling here and the reasons go on. We aren't all alike and we all don't have the same needs. We are a very diverse community.
I don't know where you live. I live in Chicago and you can setup a garage sale in the winter time. There are inside flea markets in my area. Of course you have to pay for space. But the OP can also advertise locally and sell from their house. If he's selling at a loss then he's paying fees to do that.

My ONLY point was you are assuming that everyone that sells on Ebay has the same resources as you do and that simply is not true. While it isn't always because the source is not available within a reasonable range from their home, sometimes it is the person that is not capable due to physical limitations to do such.

All I was trying to explain is that what may work for you is simply not what may work for others. We are a diverse group of sellers from all walks of life and all kinds of geographic areas.

mam98031 • Volunteer Community Member • Buyer/Seller since 1999

yourwantsandneeds · ‎02-26-2022

What the hell is this thread even about at this point?

I don't mean this to you @keynesguy - but everyone

I think the main question is

1. How do we make sure we are not being taxed on the crap around our house and the old clothes we have no receipts for that we are selling? Am I right? I don't think we started this thread worrying as professional sellers. I may be wrong, but this is what I am thinking.

And somewhere, about 14 miles back, someone posted the correct answer which is that we can use the Government's Fair Market Value system to estimate values of what we sold.

This can be found here:

https://www.irs.gov/taxtopics/tc409

I am still unsure as to where we input this deduction info. And, I am worried that we cannot deduct more than $3000 per year.

And someone just keeps repeating that "if we have a loss we won't be audited. "

And this 'advice' is not helping me and nor does it seem to relate to the thread for me.

Please, someone who understands what I am saying please weigh in.

Thank you!

keynesguy · ‎02-26-2022

@yourwantsandneeds

Apologies, but what you wrote is not correct: "the correct answer which is that we can use the Government's Fair Market Value system to estimate values of what we sold." It's actually less complicated than that for non-business sellers like yourself. You are taxed on the selling price, minus your basis, which is what you paid + other selling costs. For most used personal goods like old clothing and the baby's old crib, your basis will be higher than the selling price, and you will owe no tax. However, you will owe tax on the Mickey Mantle rookie card that you paid 5 cents for in 1952 or whenever and sold for $1,000 or whatever, because you sold it for more than you paid. There are several ways to report this on your filing, which are covered at various points in this thread. Hope this is helpful.

mam98031 · ‎02-26-2022

@yourwantsandneeds

You are a bit late to the thread, it has been active since early December last year. And yes as many long threads do, the OP's [backhomeoutdoorz] other members as other questions. Nothing unusual in that at all.

1. Yes correct however if you are taxable or not is between you and the IRS. Ebay only reports the numbers they are required to by the IRS. How you define a "professional seller" has nothing to do with anything really.

I'm unsure as to what you are specifically talking about with the $3000 deduction. Deduction for what exactly, be specific.

I don't know who you are referring to but you would be correct that it would be incorrect information about avoiding an audit if you have a loss. Oh wait, are you saying that there is a ceiling on reporting a loss of $3000? If that is the case, that is not correct either.

If you are a casual seller and ONLY sell stuff from around YOUR OWN house, you don't sell stuff for anyone else and you don't buy anything to resell, you can NOT deduct ANY of your losses at all.

@yourwantsandneeds

mam98031 • Volunteer Community Member • Buyer/Seller since 1999

wildpitchsports · ‎02-26-2022

I hope everyone finds their own way to make this work for them. In a lot of cases, it simply won't sadly.

There will be pain all around. Not even eBay's fault.

espresso_warehouse · ‎02-26-2022

@mam98031 wrote:
@yourwantsandneeds

I'm unsure as to what you are specifically talking about with the $3000 deduction. Deduction for what exactly, be specific.

This was covered in the IRS documentation included in the original post, did you click the link or no?

https://www.irs.gov/taxtopics/tc409

Things can get more complicated when we paraphrase the IRS rules about hypotheticals without reading the documentation. Since it is obviously not doing any good, we should stop bickering about the details, give only general advice and encourage people to get a CPA.

The broad strokes answer here is that people should stop freaking out. If you sold items for a loss, you aren't going to owe taxes on that amount but you may still need to claim the income when you file taxes.

I say may because the threshold is different in every state for personal items.

mam98031 · ‎02-26-2022

@wildpitchsports wrote:
I hope everyone finds their own way to make this work for them. In a lot of cases, it simply won't sadly.

There will be pain all around. Not even eBay's fault.

Why won't it work for some? Those that sell items from around their home just need to make sure they fill out their tax report correctly, it won't raise their income taxes owed. Or was there something else you were referring to.

mam98031 • Volunteer Community Member • Buyer/Seller since 1999

mam98031 · ‎02-26-2022

@espresso_warehouse wrote:
@mam98031 wrote:
@yourwantsandneeds

I'm unsure as to what you are specifically talking about with the $3000 deduction. Deduction for what exactly, be specific.

This was covered in the IRS documentation included in the original post, did you click the link or no?

https://www.irs.gov/taxtopics/tc409

Things can get more complicated when we paraphrase the IRS rules about hypotheticals without reading the documentation. Since it is obviously not doing any good, we should stop bickering about the details, give only general advice and encourage people to get a CPA.

The broad strokes answer here is that people should stop freaking out. If you sold items for a loss, you aren't going to owe taxes on that amount but you may still need to claim the income when you file taxes.

I say may because the threshold is different in every state for personal items.

Thank you for your attempt to school me. But all that has nothing to do with my simple question. If you take issue with the other poster stating this $3000 limit, then take it up with them, not me. I didn't post it, I just asked what they were referring to. And my question stands whether you approve of it or not.

mam98031 • Volunteer Community Member • Buyer/Seller since 1999

espresso_warehouse · ‎02-26-2022

@mam98031 wrote:
@wildpitchsports wrote:
I hope everyone finds their own way to make this work for them. In a lot of cases, it simply won't sadly.

There will be pain all around. Not even eBay's fault.
Why won't it work for some? Those that sell items from around their home just need to make sure they fill out their tax report correctly, it won't raise their income taxes owed. Or was there something else you were referring to.

There are people who are not required to file taxes, who sold at a loss, who will now have to file taxes. This new situation will likely cost them money, keeping in mind the type of person who is not required to file taxes isn't going to be schedule savvy nor likely to be able to figure it out on their own.

So it won't work. And they clearly won't get any constructive help here with so much fear mongering going on.

espresso_warehouse · ‎02-26-2022

@mam98031 wrote:
@espresso_warehouse wrote:
@mam98031 wrote:
@yourwantsandneeds

I'm unsure as to what you are specifically talking about with the $3000 deduction. Deduction for what exactly, be specific.

This was covered in the IRS documentation included in the original post, did you click the link or no?

https://www.irs.gov/taxtopics/tc409

Things can get more complicated when we paraphrase the IRS rules about hypotheticals without reading the documentation. Since it is obviously not doing any good, we should stop bickering about the details, give only general advice and encourage people to get a CPA.

The broad strokes answer here is that people should stop freaking out. If you sold items for a loss, you aren't going to owe taxes on that amount but you may still need to claim the income when you file taxes.

I say may because the threshold is different in every state for personal items.
Thank you for your attempt to school me. But all that has nothing to do with my simple question. If you take issue with the other poster stating this $3000 limit, then take it up with them, not me. I didn't post it, I just asked what they were referring to. And my question stands whether you approve of it or not.

The answer to your question is in the link the poster provided. Nobody can help you if you don't want to read the IRS documentation.

Or was that question not asked in earnest?

mam98031 · ‎02-26-2022

@espresso_warehouse wrote:
@mam98031 wrote:
@wildpitchsports wrote:
I hope everyone finds their own way to make this work for them. In a lot of cases, it simply won't sadly.

There will be pain all around. Not even eBay's fault.
Why won't it work for some? Those that sell items from around their home just need to make sure they fill out their tax report correctly, it won't raise their income taxes owed. Or was there something else you were referring to.
There are people who are not required to file taxes, who sold at a loss, who will now have to file taxes. Given that choice, this situation will likely cost them money, keeping in mind the type of person who is not required to file taxes isn't going to be schedule savvy, nor likely to be able to figure it out on their own.

And they clearly won't get any constructive help here with so much fear mongering going on.

It is merely a few forms. If the money they generate from there sales is important to them, then it is a small thing to do. It does not have to cost them money. I think you don't have very much faith in the intelligence of people that sell stuff from around there home. Most are likely capable to file their own taxes. Those that aren't may have a family or friend to do it for them. And others will have community resources that will help them too at no cost if they need that.

As you know I've been all over threads like this and yes some posters do post with scary stories because they assume to much. But most of the Mentors that have been out here such as myself have been encouraging sellers just to take the next few months learning about the process and what this 1099K means to them.

Also assuring sellers that ONLY sell stuff from around their home that they will not likely see any increase at all in their income taxes. So this "fear mongering" you are talking about comes mostly from those that assume these sellers can't accomplish a tax report or find suitable help to accomplish them at no cost to them if that is something they require. I personally have more faith in my fellow sellers.

mam98031 • Volunteer Community Member • Buyer/Seller since 1999

espresso_warehouse · ‎02-26-2022

@mam98031 wrote:
@espresso_warehouse wrote:
@mam98031 wrote:
@wildpitchsports wrote:
I hope everyone finds their own way to make this work for them. In a lot of cases, it simply won't sadly.

There will be pain all around. Not even eBay's fault.
Why won't it work for some? Those that sell items from around their home just need to make sure they fill out their tax report correctly, it won't raise their income taxes owed. Or was there something else you were referring to.
There are people who are not required to file taxes, who sold at a loss, who will now have to file taxes. Given that choice, this situation will likely cost them money, keeping in mind the type of person who is not required to file taxes isn't going to be schedule savvy, nor likely to be able to figure it out on their own.

And they clearly won't get any constructive help here with so much fear mongering going on.
It is merely a few forms. If the money they generate from there sales is important to them, then it is a small thing to do. It does not have to cost them money. I think you don't have very much faith in the intelligence of people that sell stuff from around there home. Most are likely capable to file their own taxes. Those that aren't may have a family or friend to do it for them. And others will have community resources that will help them too at no cost if they need that.

As you know I've been all over threads like this and yes some posters do post with scary stories because they assume to much. But most of the Mentors that have been out here such as myself have been encouraging sellers just to take the next few months learning about the process and what this 1099K means to them.

Also assuring sellers that ONLY sell stuff from around their home that they will not likely see any increase at all in their income taxes. So this "fear mongering" you are talking about comes mostly from those that assume these sellers can't accomplish a tax report or find suitable help to accomplish them at no cost to them if that is something they require. I personally have more faith in my fellow sellers.

That's an intersting take for sure, considering how many threads and how long these threads get.

Your own views have evolved on the matter. Makes me wonder what you were doing before. I remember explaining to you about the personal items thing not so long ago. You weren't initially receptive to that information, like many others here. Hence, it is not as simple as you claim it is here and now today.

If a person doesn't have to file taxes and gets a $712 1099 from eBay, now they have to file taxes just because they sold 9 items on eBay lat year. They aren't going to want to deal with that again and it won't work for them. This isn't a judgement on the policy, just a statement of it's potential impact. I feel like you are just here to bicker.