Do I report items I used and sold as a loss?

[musahm4au2xvd]

If I use an item for a few months and then sell it for a lower price, do I still state my original purchase price as a deduction?

I would have a net profit, but I do sell a lot of used stuff which would add up as losses if I count my purchase price as an expense.

Any advice would be appreciated.

[downunder-61]

Please get a tax profeesional, I am sorry but a question like this shows you really have no idea on how reporting/deductions/COS and income tax works. 

Regardelss of any adivce you get to this one query (YES you claim your cost of goods against your income on those goods) there is so much more involved that is likely going to be confusing to you and flying blind with the IRS is never an excuse for incorrect filing etc.

[musahm4au2xvd]

Respectfully, the cost of a tax professional would likely cost more than I would have to pay in taxes for ebay (with zero deductions). I have filed taxes for other gig work for a few years now and was hoping this would not be too complicated for a small seller.

From my understanding, for any given sale, my deductions would be the cost of the item, ebay/paypal fees and shipping. Please elaborate if there is more to it than that.

[7606dennis]

I advise you to consult a tax professional rather than depend too heavily on advice from these boards.  Frankly, I would think that you are required to report the income when filing your tax return.  However, whether or not you are able to claim any sort of deductions I cannot say.  I believe that the tax rules regarding business deductions for hobby sellers has been done away with by the last administration.  Thus if you bought the item for your use then when you no longer had a use for it, sold it,I would think that that any amount that you got for it would be taxable income.  Of course, you should consult a tax pro to be sure.

[7606dennis]

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@musahm4au2xvd wrote:

Respectfully, the cost of a tax professional would likely cost more than I would have to pay in taxes for ebay (with zero deductions). I have filed taxes for other gig work for a few years now and was hoping this would not be too complicated for a small seller.

From my understanding, for any given sale, my deductions would be the cost of the item, ebay/paypal fees and shipping. Please elaborate if there is more to it than that.

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Unless you're a business seller, I'm not sure you would be allowed to take any business deductions.  Of course, any decent tax preparer would be able to advise you or you might even be able to get some help from Turbo Tax or the IRS.

[musahm4au2xvd]

I use TurboTax to do all my filings since my gig work deductions has been pretty simple so far.

I was reading https://turbotax.intuit.com/tax-tips/self-employment-taxes/a-tax-filing-factsheet-for-ebay-sellers/L...

There does not seem to be a fine line differentiating what constitutes as hobby and what constitutes as a business.

[strugglinlikeyou]

Here we go again; Hire a tax professional. Guess you are all wealthy.

[downunder-61]

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@strugglinlikeyou wrote:

Here we go again; Hire a tax professional. Guess you are all wealthy.

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Sheesh - How much do you guy's have to pay a tax professional over there? 

I doubt it would cost more that any fines you may receive for incorrect filing, or over payment of tax for the same reason, not to mention, who in their right mind will really take advice from a public forum such as this on a matter as imprtant as dealing with the IRS?

Have you seen how many conflicting answers there are posted daily on this subject?

IMO - the only adivce worth getting is to seek help from a professional. Hell you only have to do it once and then you can see how to do it yourself there on out...............

[maxine*j]

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@strugglinlikeyou wrote:

Here we go again; Hire a tax professional. Guess you are all wealthy.

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One of my favorite quotes from Red Adair:  "If you think it's expensive to hire a professional to do the job, wait until you hire an amateur."

,

[nobody*s_perfect]

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@7606dennis wrote: ... Unless you're a business seller, I'm not sure you would be allowed to take any business deductions.  Of course, any decent tax preparer would be able to advise you or you might even be able to get some help from Turbo Tax or the IRS.

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A good place to start is the IRS's own pages that help taxpayers figure out whether they should file as a business or a hobby.

From the perspective of the IRS, all of the money that you receive from the buyer is reportable as income,. Whether or not you can deduct shipping costs and other expenses depends on whether the IRS sees you as a hobby or as a business.  This is based mostly on profitability, you do NOT have to be a "registered business."  Here are some useful background information pages that the IRS has put together.

Defining business vs hobby:  https://www.irs.gov/faqs/small-business-self-employed-other-business/income-expenses/income-expenses

Paying taxes if you're a hobby: https://www.irs.gov/newsroom/heres-what-taxpayers-need-to-know-about-paying-taxes-on-their-hobby-act...

[dnasilver]

What does wealth have to do with it? Consult a CPA or Tax Attorney and move on. The laws were greatly changed by the last administration for small sellers, part time sellers, hobbyist, yard sellers, and the such. Those laws were not changed in favor of the small guy, it was changed to pay for the ultra rich tax breaks that was given by the last administration. There are many who sell on here that think they can operate like a business but the law is clear that they no longer can take all the business deductions they have been. Times change, educate oneself or not, your choice.

[dnasilver]

A CPA or Tax Attorney would disagree with your last statement: "There does not seem to be a fine line differentiating what constitutes as hobby and what constitutes as a business." It is clear what the differences are. 

[dnasilver]

over here? Some think the same as "over there". They know more than the person who commits to actually knowing (a professional) versus saying what you want to hear (a conman). The cost varies, but for us it is worth the expense.

[justafemster]

You used something.  It's now not new.  How would you even think you can deduct the new price?  Ever heard of depreciation?  

And you've been selling on here for almost 10 years.  SIGH

You need a tax professional.  NOW.  

[bashort]

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@justafemster wrote:

You used something.  It's now not new.  How would you even think you can deduct the new price?  Ever heard of depreciation?  

And you've been selling on here for almost 10 years.  SIGH

You need a tax professional.  NOW.  

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So I buy a item for personal use, use it for a while then resell it on ebay. As I am responsible for tax on the proceeds of course I will deduct the full purchase price no matter if I sold the item for more or less than I gave for it.