Keeping tax records as a hobby seller

[lashno38]

Hi, I've been in the model RR hobby for several years, and in 2024, decided to dismantle my layout and sell some items. I've had gross sales of about 10K, so I can expect a 1099-k. This is a 1-time thing, and I went into this with no intention of profit (and it looks like I will end the year just a couple hundred profit). So I'm definitely asking this from a "hobby seller" or "garage sale seller" perspective, definitely not a business seller. I have records / receipts for most of the items I've bought, and now resold. I can find FMV for the few I don't have records for.

My questions for recording each item in a spreadsheet for my buying and selling info:

1) On my sale, what can I subtract from the gross amount the buyer paid, to reach a net amount earned? eBay fees? Shipping paid by me? Refunds to buyer?

2) On my original purchase, what can I add to the price paid for each item? My shipping paid? My sales tax paid?

Thanks, appreciate your input.

[lashno38]

I used the term "hobby sales" in my OP, that I now understand should more appropriately have been termed "personal sales". (Thanks to @lacemaker3 for pointing that out). So it becomes a matter of me determining whether there was a gain or a loss from those sales. This is best explained by these IRS links supplied by many of you:

https://www.irs.gov/businesses/what-to-do-with-form-1099-k

https://www.irs.gov/newsroom/irs-announces-2023-form-1099-k-reporting-threshold-delay-for-third-part...

I don't feel anyone here gave advice that encouraged "fraudulent" behavior. I appreciate everyone's input, and have gained the knowledge to speak in a more informed manner with a tax advisor, as many have suggested I do. Thank you to all for that.

[articulatedgeared01]

Fri 2-14-2025 8:10 p.m.

Please read what I wrote about capital gains and capital losses.

You received a Form 1099-K.  You need the IRS booklets for capital gains / losses.  There are separate forms for capital gains and capital losses.

Threshold information for receiving 1099-K's was published by the IRS in November 2024. 

Regards,

ag01 

[articulatedgeared01]

Your proceeds are the eBay order earnings (includes eBay selling fees, etc.).  The difference between order earnings and your cost allows you to compute a capital gain or capital loss.  You must have held the items for more than 1 year if you declare a capital gain.   Your cost can include the original cost plus any "improvements" (such as repair labor and some other costs).  Shipping costs are part of order earnings if you purchased a discount eBay shipping label.  If you purchased a full price shipping label from a shipper, then you need to add that cost to your original cost.  The taxes on an eBay purchase are paid by the seller.   That tax money goes from the buyer to ebay.  Then ebay sends the tax money to the State in which the seller resides. 

Regards,

ag01     

[kh-stanley1]

Hi everyone,

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

Thank you for understanding.