How to report 1099k income if items are personal items sold at a loss?

[elise_grimwald]

Hi,

I received a 1099k, and the items I sold were literally all personal items I owned and sold. Overall, they would be considered a loss when added up and shipping is accounted for.

I am not a business, as I didn't buy these items to sell this year, and I just want these items out of the house. I really couldn't take many off, as I sold old items I had, or items I didn't want any more. I know Schedule C would make me claim all my personal items as income (which is crap, as they didn't earn money), and I'd have to unfairly pay on 1k of 'income' that isn't profitable. (I did the math already). And Hobby is worse, as I'd have to claim everything, even though most is at a loss, and when added up the total is a loss.

I know I can also do a schedule D/form 8949, but I can't claim losses on most items there either (unless I'm wrong, and I can?). And again, when added up, everything is a loss. So if I were to itemize everything, it'd show as a profit, even though overall the items were a loss.

So I was wondering how I would report the 1099k. Do I just put down the items on the 8949 that made money (I say 8949 because I'm not doing a C when I'd owe on 1k I didn't really make because the items left weren't profitable but were old and can't be deducted, which kills my refund), or do I have to include ALL the items I sold, even if they didn't make any money? 

And if I do have to include all items, how do I show the ones that didnt make money as a nondeductable loss if that's how it's done (I can't figure out how to do this tbh)? Would I just list them at the same price they sold for and 0 them out that way? 

Alternatively, is there a way to show that the items all added together weren't profitable? That's actually ideal (it ends up being the toyal of all sold items was a $3 loss or something like that), but I don't think I can do that. 

Also, as I did do this as a business last year (I stopped because it was too much for me and not profitable), do I have to report it any special way that I stopped, or can I just submit my income as it really is now without anything? I never actually paid self employment tax because I never had to (I didn't make anything), so that isn't an issue, and I didn't have anything besides a PayPal business account I closed early last year because it was just hurting me. I was just concerned because I did a C last year and won't this year because it no longer applies.

Thanks in advance. 

[onlinecentral]

A previous discussion suggested that you read IRS Publication 334 and then choose to treat your inventory as supplies.

[luckythewinner]

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@kensgiftshop wrote:

@elise_grimwald 

How did you do it last year and before that?

It shouldn't be any different.

Report the income and deduct the expenses.

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It sounds like the OP is selling only personal items and only at a loss. 

If so, in the past he probably would have followed the IRS's own advice and not reported "yard sale" income.  "Yard sale" sellers were not required to account for that income in their taxes. 

But now the taxpayer must account for 1099-K income on their return or risk having to amend their return if the IRS does what is being widely reported - treating the "missing" `1099-K as unreported income and billing taxpayers. 

So it really is different now if you are a "yard sale  seller in the eyes of the IRS but receive a 1099-K.

[gemandash]

Hi, so are you saying that if I bought a dress 6 years ago, paid $80, sold it for $35 - I need to report it to IRS? That is kinda the opposite of what I have found after researching this topic. From what I understand, if you make ANY profit on an item you sold vs what you paid for it - report it. If no profit was made - why report it..? That is where I am so stuck.

[gemandash]

CONT'D:

. . . SO many different answers and CPA's are not cheap. I hope I can figure this out on my own, at least just for this year's taxes. I have no intention of trying to get out of paying necessary taxes, but I will say I will be **bleep**ed off if I now need to pay taxes on personal items I chose to sell around my house because they were clutter - would have just donated them. And just to clarify, all "yard sale" or personal items I sold on eBay did not sell for more than I initially paid for them - hence, no profit made.

[terrycece62]

You have to show(prove) to the IRS you did not make a profit but took a loss when you resold the item

Good luck 

[movieman630]

Taxes 101

As long as you have the original receipts for the "personal items" you sold at a loss then you deduct it.  If you didn't keep the receipts and you get audited they don't care if you say the items were personal.  You don't have the proof.

Price of selling online these days is that you're taxed on pretty much everything.  Keep records or just pay the tax and lick the wound.

[rfmtm]

Generally for most personal item sales there is no profit, as it is obvious you are selling at a loss, so you only need to provide a reasonable estimate of value.

Currently the IRS is allowing a simplified way to do this when just selling personal or garage sale items not for profit or as a business or hobby. You report the total amount as Misc/Other Income. You then can post an Adjustment up to that total amount to offset that income. This results in a wash (zero profit), you will owe no taxes, and the IRS will be happy.  

Any accountant or tax software can guide you through this.

[ms.rodriguez*]

I am in the same boat as you.  Most of the items that I sell are toys that I bought my kids.  So to NOT go crazy, I will buy some newer items and sell them at  a profit.  When I do my taxes, there will definitely be some profit. I don' t mind paying a tax on that.  But I definitely would hate to pay a tax on a video game I bought my kid for 60 bucks and sold for 10 bucks.  I figure if you give the wolves a little something , they will be satisfied.  This is what I have done for years.

[saywhatcl500]

this is one of the best answers. you got other people on here telling you to pay tax on items you sold for a loss!!! double tax(tax when you bought and tax on your taxes).

if all your items were personal, and all the items were sold for less than what you paid (which is normal unless you had a rare item worth more) then your profit is 0. you don't pay taxes on $0

[saywhatcl500]

how are you buying new items and then selling for profit? you buying them all at heavy discount? but why even do that? if you bought toys and video games (like you said for $60 but sell for $10), all your profit is 0 if you sell for less than what you paid. therefore no taxes for your ebay items that were personal items

[kh-vince]

Hi everyone,

Due to the age of this thread, it has been closed to further replies. Please feel free to start a new thread if you wish to continue to discuss this topic.

Thank you for understanding.