Do I have to report sales on taxes if I am just getting rid of stuff?

[jaderaven88]

I started selling off items during the summer to offload some things from my old place when I moved.  I was promoted from Ebay to add information for a 1099 tax form, as according to them I made of $600. I have no plans to do this for the long run, just to get rid of a few things that I no longer need or want, so is this something that I will have to list on my taxes?

[bonjourami]

Absolutely, its income.

[mtgraves7984 · Accepted solution]

"... so is this something that I will have to list on my taxes?"

@jaderaven88 

Yes... but you can offset it by putting expenses, cost of goods, selling fees, etc., on Schedule C.

[jaderaven88]

Okay. I was wondering because I saw some posts that if it was basically a virtual garage sale, usually those sales don't need to be reported, but I want to make sure I am getting the right information, especially since I was notifed that I had to add information for a tax form.

[caldreamer]

Yes, you have to report ALL income to the IRS.   1099 is sent to you and the IRS (you must report "gross amount" shown on 1099).   If you file income taxes as "a business" you can deduct expenses (EBAY fees, cost of merchandise, mileage, packing materials, cost to ship items, returned merchandise).   Then you would pay "income taxes" on net amount after all expenses are deducted. 

If you file taxes as "individual" you have to pay income taxes on the "gross amount" shown on 1099.     You should consult with CPA for expert advise.

[stubbornoaf]

It's one of those things where it depends how much you think "Someone" will be watching you for your sales.

I do know that the income tax is based per calendar year, not per transaction. So if you sell a lot of things, you need report all of it.

Also, depending on your life situation, having money with no apparent source could create bigger problems, such as people concluding you are taking bribes.

[house*of*paws]

Hi @jaderaven88 

There's a difference between what we're supposed to 'report' ... and what we'll eventually have to pay taxes on.

We're supposed to report all 'income' ... including that from garage sales.  BUT there's likely to be deductions that will show that you didn't make any profit from those sales ... meaning that no taxes will be paid on that income.

[this*old*attic]

Don’t panic, just estimate purchase price, shipping cost, Ebay fees and deduct on the proper form. Sounds scary but it’s easy. Even a proper business is allowed to lose money or break even for several years. They aren’t after Grandma or someone downsizing.

[lacemaker3]

@jaderaven88,

You can get good information about this at the blog that TaxAct set up for eBay:

https://community.ebay.com/t5/Announcements/eBay-and-TaxAct-partner-to-help-you-navigate-new-Form-10...

https://blog.taxact.com/ebay/

For example, here are some of their specific FAQs related to your situation:

https://blog.taxact.com/4-common-misconceptions-about-form-1099-k/

[pickermall]

Just like a REAL garage sale, you are supposed to report ALL income to the IRS

[dbfolks166mt]

     Yes but realize the 1099 you receive will represent the gross revenue from all sales which also includes shipping if you do not use free shipping. From that you deduct all your expenses which include eBay fees, actual shipping cost, POV, packing materials and the cost of goods sold (this is usually the difficult area for a lot of people offloading things). This will leave you with a net revenue which can either be positive or negative and this is what you pay income tax on if you have a net gain or possibly report as a loss if you have a negative gain. If you have a loss this can potentially offset other income tax liabilities but best to talk to your accountant or tax professional regarding that.