So I will have to pay the IRS for selling over $15k of my comic book collection on ebay this year?

[cerealjedi]

Not sure how this works but the future worries me. I AM NOT a reseller. I just sell stuff in my collection, toys, comics, etc and I do spend a lot on eBay as well.

So will I get a 1099 form? Will I have to pay the IRS?

[pargran3]

Yes, you will get a 1099

For the rest of it, consult an accountant. Income is income. Expenses are expenses. We can't do your taxes for you.

[toomuchstuffagain35]

Technically, anyone who resells stuff they bought is a reseller.

Whether you have to pay the IRS depends on your personal income/taxes situation and how much of your expenses and COGS (initial cost of goods sold) is.

I personally don't get all the angst regarding having to pay taxes on earned income.

I'd rather have (say) 85% of something than 100% of nothing.

If anything, having a 1099-k made it easier to reconcile my figures against ebay's.

That said, I do resent having to pay taxes on SS if I continue working but it's tax free income to those who don't.

[inhawaii]

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@cerealjedi wrote:

Not sure how this works but the future worries me. I AM NOT a reseller. I just sell stuff in my collection, toys, comics, etc and I do spend a lot on eBay as well.

So will I get a 1099 form? Will I have to pay the IRS?

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Yes -and- Only if your earnings are more then your expenses.

[cerealjedi]

How do I do expenses? I mean most of this stuff has been purchases over the course of 20 years, flea markets, swaps, some on eBay etc. Is the IRS going to say "how much do you have invested on the $20,000 in comics you sold in 2022"?

[onefootflipper · Accepted solution]

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@cerealjedi wrote:

How do I do expenses? I mean most of this stuff has been purchases over the course of 20 years, flea markets, swaps, some on eBay etc. Is the IRS going to say "how much do you have invested on the $20,000 in comics you sold in 2022"?

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You make an estimate of the existing value of the collection and either account for it on line 35 or 36 of schedule C. The IRS only sees details of your internal bookkeeping if you get audited, which is extremely unlikely and then at that point you could get to argue about it with the auditor. I know a LOT of ebay sellers in real life and don't know a single one of them that has ever been audited. People like us are actually not a huge IRS audit target as the usual hodge podge of hand scribbled receipts, estimates and other sketchy records are nightmares for them to try to audit and would usually result in the IRS losing money on the deal. 

[hachumi]

You will get no sympathy or help from the cheerleaders on this board.  They feel everybody is a tax cheat who hasn't been filing all their income all along.  Yes you will get a 1099 and yes if you made a profit, you will have to prove that the money you made was on things you already owned, not bought to resell.    It's going to be a major headache when the 1099s start hitting the mailboxes, should be plenty of posts on here about how ebays and sellers numbers don't match.  I've already got the popcorn on standby...

[lacemaker3]

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@cerealjedi wrote:

How do I do expenses? I mean most of this stuff has been purchases over the course of 20 years, flea markets, swaps, some on eBay etc. Is the IRS going to say "how much do you have invested on the $20,000 in comics you sold in 2022"?

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Yes, you will have to report the cost basis for your items, which is basically how much you have invested in them. In a lot of cases, for eBay sellers like you who are selling collections they have acquired over years, it may turn out that you are selling them at a loss. (Don't feel bad about that, because you got value from enjoying them over the years.)

If you don't have records, then it may be difficult to make a case that you are selling as a business, which gets the best tax treatment. However, if you want to use your collection as capital to build an eBay business, then you can start acting as a business now. See the links below for more info on what records you need to keep, and how to act like a business. That mostly means making good business decisions to maximize your profit. When you file a s a business, you will also pay self-employment tax and social security on any positive income (profits) which can be a good thing because it will increase your social security income after you retire. This is what @onefootflipper 's post was describing here.

At the moment, your current approach means that you are selling your collections and investments. Any profits are Capital Gains, and if you have an overall loss, that is a Capital Loss. You fill out Form 8949 Sales and Other Dispositions of Capital Assets, and then report the results on Schedule D Capital Gains and Losses. If you had a gain overall, then the gain (profit) is taxable income. If you had a loss overall, then there is no gain to be taxed on, and some of the losses may be deductible (up to $3,000).

IRS Publication 551 Basis of Assets covers how to determine the cost basis of assets for reporting. Records are best, but there's an alternative method where you do research to find out what the fair market value was when you acquired the assets. If you inherited any of the collection, then you always use the fair market value at the time when you inherited them. https://www.irs.gov/forms-pubs/about-publication-551

More info:

https://community.ebay.com/t5/Announcements/eBay-and-TaxAct-partner-to-help-you-navigate-new-Form-10...

Tax Information Center for eBay Sellers: https://blog.taxact.com/ebay

[farmalljr]

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@cerealjedi wrote:

How do I do expenses? I mean most of this stuff has been purchases over the course of 20 years, flea markets, swaps, some on eBay etc. Is the IRS going to say "how much do you have invested on the $20,000 in comics you sold in 2022"?

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You need to talk to an accountant, CPA, or your tax preparer. Advice given here is worth what you paid for it, seek the advice of a professional. You MAY be able to write off all of the initial purchase price, you may not. 

Some may suggest audits are rare, and they mostly are. Businesses/small businesses are targeted more than just the working class. WAY more. And as a seller here, even a "hobby" seller, you ARE a small business. Depending on what type and other factors, will determine what you can deduct and all of that. Again, this is why you need to consult a professional. 15K is a good bit of money to worry about being taxed on, so it's in your best interest to seek a pro to guide you to a trouble free filing. 

[ms.rodriguez*]

If you received more than 600, you get a 1099.  If you go to MY EBAY, you get to see ALL of the fees that ebay deducted month by month.  If you print through Ebay shipping, you see all of the shipping fees that you paid.  If you had to refund someone,  it shows as 50 received (Let's make believe you sold a comic for 50.oo) but since you had to refund 50 (let's assume buy made error), that 50 is a deduction.   Look at what else you spent to make money.   Did you buy a printer or camera or a device to list(ipad, desktop,etc.) You deduct a portion of those costs.  Internet, you pay it.  What portion was used for ebay ?  Take into account how many folks use it at home.   For me, I calculated about 10% of the monthly internet bill for ebay related sales.   How much did you spend on shipping materials.

I do realize that you probably don't have receipts.  So do your best to calculate how much you spent on the a comic .    It's going to be difficult for some sellers.  But anyway, you were always supposed to report this income even if the threshold was much higher.  Income earned is supposed to be reported all of the time.

Get a box and start putting receipts in there .  Goodluck.   

[caldreamer]

1099 will be sent to you and IRS.   You must report "gross amount" shown on 1099 (you have to pay taxes whether you are hobby seller or business).   It is to your benefit to file your taxes as a "business" then you can deduct business expenses (EBAY fees, costs of goods, shipping supplies).    Be sure to keep all receipts to justify your deductions.

You need to consult with tax professional so they can help you get all the legal deductions and to guide you how to setup for "business" recordkeeping.

[bonjourami]

Ebay cheerleader here..and dont be surprised if you get audited for all the sales you've made here that you never paid income tax on.

[maxine*j]

No two people are in exactly the same tax situation.  No one here can tell you whether or not you must file a federal or state income tax return, what income you must report on any return(s) filed, what taxes may be due on any income reported.

Hire a professional tax preparer to guide you this time.   After that, you can doubtless do it yourself, once you have a "model" to follow for record-keeping and tax returns, using a simple database and an on-line tax program.

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[dnasilver]

Seriously spend the few bucks and consult with a CPA or Tax Attorney.  You have two routes on any income (income does not necessarily mean taxable) It is either earned or unearned. Depending on your financial situation a CPA or Tax Attorney can tell you what the best route for you is when you file taxes.  Who knows your sales may afford you a tax deduction against other income. No need to panic without knowing if you owe taxes or are owed a tax refund. 

[monica-sells]

I am just dropping this morsel in this thread as food for thought.....

A person who buys collectibles may be classified as a dealer, hobbyist, or investor, each with unique tax consequences.

For most (hobbyists or investors), collectibles are generally treated as capital assets and any difference between purchase price (basis) and sales price (proceeds) is treated as a short- or long-term capital gain or loss.

Collectibles cannot be depreciated, but the costs of storage or insurance are deductible in the year incurred.

If you display a collectible in your home, wear it, or use it in a personal way, you may not be entitled to capital gains treatment.

Finally, investing in collectibles through a qualified retirement plan account is deemed an “immediate distribution” and subject to tax per IRC Section 408(m)(2).

I never even thought about liquidation when I started collecting 'stuff' back in the late 60's.....and until I started selling off my 'stuff' , never considered the tax ramifications....