I don't want to pay income tax when I sell my old car on ebay - but PayPal reports it to the IRS.

[storagecraft-gps]

My PayPal account exceeds the $20,000 threshold in "payments received" that causes PayPal to report all payments received to the IRS on the PayPal 1099.   Most of it is "business".  But last year when I sold my 30 year old Mazda RX7 I ended up paying income tax on the sale, and obviously it wasn't income earned.   My cost base 12 years earlier was 3 times what I sold the car for so there was no "profit".    

When I file my taxes with TurboTax for home and business, all PayPal 1099 payments received get reported as business income with no way to explain personal property sales are not business sales.  Business sales have offsetting "cost of sales"  reported in the same year.

I know this is a tax question, but some other ebay sellers must have run into this.  

Maybe I am supposed to have a second ebay and PayPal account for the few occasions that I sell personal property.

[corvettestainless]

I can't tell you how 'turbo tax' has it set up, but it's line 20A on Schedule C (maybe TT shows those numbers)- it's 'vehicle sales'. That's how I did it, and if ever questioned (audited)- just show what you sold and for how much (bill of sale or?)

[rock.star]

You need to talk to a tax professional. 

And cars are not paid for using PayPal only the deposit is sent that way.

[nobody*s_perfect]

If there was no profit, then there shouldn't have been any income tax on it.  Apparently you did not properly deduct the cost of the item you sold.

[slippinjimmy]

If you deducted your "cost" of acquiring the vehicle originally from the amount you sold it for (presuming it was less than the acquisition value) you would owe ZERO tax.

If you failed to make that deduction then it's your mistake.