mam98031 • Volunteer Community Member • Buyer/Seller since 1999
@nobody*s_perfect wrote:Isn't "selling personal items at a loss" pretty much the definition of a hobby seller?
https://www.irs.gov/newsroom/hobby-or-business-heres-what-to-know-about-that-side-hustle
NO it is NOT!
The term trade or business generally includes any activity carried on for the production of income from selling goods or performing services. It is not limited to integrated aggregates of assets, activities, and goodwill that comprise businesses for purposes of certain other provisions of the Internal Revenue Code.
I know the above link says "charities", but it is an OK definition.
People that are selling off personal items only, are doing that in the hopes of making some money in which they may or may not reap a profit. Depending on what the worth of these items are, it could be a Capital Gains or some other IRS form they need to fill out to satisfy IRS. It items were inherited, there are rules for that too.
@dzebajrak_0 wrote:Most people do jot make a profit they sell way under what bought for so doing taxes is a waist of our time and will stop many from selling on evay
I'm not sure you have the data to prove that for the 6-7million US sellers. I am sure you are correct for some. But there are lots of sellers that make a profit.
FYI whether you are profitable or not is NOT a requirement for reporting your income. It is all to be reported, you may end up taking enough costs away that you end up with zero net taxable income, but you still have to report it in most cases. There are some exceptions.
https://community.ebay.com/t5/Announcements/eBay-and-TaxAct-partner-to-help-you-navigate-new-Form-10...
https://www.irs.gov/faqs/small-business-self-employed-other-business/income-expenses/income-expenses
https://www.irs.gov/businesses/gig-economy-tax-center
https://pages.ebay.com/seller-center/service-and-payments/2022-changes-to-ebay-and-your-1099-k.html
https://www.irs.gov/pub/taxpros/fs-2022-41.pdf
@pumpnmunch wrote:If the IRS actually changes this to $600 theshold the small seller will simply quit....
most of us small sellers...dont make any money anyhow....
big companies will love this....less sellers...higher prices...
the IRS does not care who the squeeze out of business...
IRS doesn't make any call outs specifically for "small sellers".
If you get a 1099k has nothing to do with if you are profitable or not. Why would there be "less sellers"? What does getting a 1099k or not have anything to do with that @pumpnmunch ?
No one is getting the "squeeze". Clearly you have some big misunderstandings about what a 1099k is even for. It is merely a form and nothing more than a form. It doesn't mean your income taxes will increase just because you got the form. With or without the form you are suppose to be reporting your income to the IRS. And with or without the form you still get to subtract your costs before arriving at a taxable income amount [if any]. It appears you are getting yourself worked up over something that is simply not true.
Myth: If taxpayers didn't receive a Form 1099-K, they don't have to report income.
Fact: According to federal law, all income is taxable unless it is specifically excluded by tax law. Taxpayers should report any profits from selling goods or services, regardless of if they receive a Form 1099-K.
@rugman19691027 wrote:Its not really income if you bought it then sold it. Its really just like getting a refund at a store. You dont report your refund as income, so you shouldn't report your personal item that you bought and paid taxes on as income since all you did was get some of your money back.
NOPE, two completely different things. Don't keep trying to fight it. While you may convince yourself you don't have to claim it on your Income tax returns, you likely won't convince the IRS.
Myth: If taxpayers didn't receive a Form 1099-K, they don't have to report income.
Fact: According to federal law, all income is taxable unless it is specifically excluded by tax law. Taxpayers should report any profits from selling goods or services, regardless of if they receive a Form 1099-K.
https://www.irs.gov/newsroom/irs-never-mind-the-myths-know-the-facts-about-receiving-a-form-1099-k-i...
@jaymond1 wrote:The issue for me is I am a recent retiree who wanted to use eBay to dispose of used items to clear out my house. Stuff I purchased new, so it would be sold at a loss. I don't have receipts for things I bought years ago. I'm not a business. Most years I sell less than $600 on eBay but my house clearing project would likely be well above that. I don't want eBay sending the IRS a form with "income" when I'm not making a profit. I realize it's not eBay's fault, but I'm going to try FB Marketplace instead.
If you get a 1099-K when you were selling personal items at a loss, it's very easy to deal with. You could potentially end up owing less tax depending on how you report them. Here are instructions from the IRS:
https://www.irs.gov/businesses/what-to-do-with-form-1099-k
If you sold personal items at a gain (for more than you paid or had invested in them) you have to report the gain as income. That's the amount you received less certain expenses. If you sold personal items at a loss, you can't deduct the loss, except ...
If you sold some items at a loss and some at a gain, you can deduct the losses (using form 8949 and Schedule D) up to the amount of the gain, so the losses could cancel out your gain or profit on the other sales. And you don't have to itemize deductions to do this.
In some cases, you can deduct losses up to the amount of the gain plus more: $1,500 more if you file single, $3,000 more if you file married (these numbers are for 2024 taxes). So losses on personal sales can even offset some of your other income. (This may be limited if you owned the personal items for less than a year).
See the instructions for form 8949 and Schedule D from the IRS link above for more info.
