Tax Q - Clearing out basement during WFH

[sweddy22]

Hi,

I reside in Illinois and got a 1099 from PayPal since I was over $1000 in sales. I do not flip or make and sell any products, I simply cleaned out mine and my parents' basements while working from home.

For example, when reporting this to the IRS how would I value my old original Game Boy?

I sold it for 39.00 plus 5.00 in shipping. If the original cost was maybe $80.00 back in the day (maybe), how would I report this sale and how do I justify the cost basis?

Any feedback would be appreciated. Thanks!

[bonjourami]

https://quickbooks.intuit.com/r/legal-taxes/taxes-ebay-sellers-need-know/

[slippinjimmy]

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@bonjourami wrote:

https://quickbooks.intuit.com/r/legal-taxes/taxes-ebay-sellers-need-know/

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That is one of the better links to explain the OP's situation.

One thing, it's an old (pre-Managed Payments) post so the chatter about eBay not issuing 1099Ks is dated but everything else is still valid.

[cambriachick]

I thought the baseline for receiving a 1099 was $10,000, not $1000.  I've been selling for about 10 years and have never received a 1099 from paypal.

[jayjaspersgarage]

"I thought the baseline for receiving a 1099 was $10,000, not $1000.  I've been selling for about 10 years and have never received a 1099 from PayPal."

It's not receiving a 1099 that matters.  What matters is that the IRS knows what you have sold and they know which sellers never report the gross sales because they get the info from PayPal or now Ebay, Etsy, You name it, Amazon, PoshMark and all the rest.  

If you sell $350 per year or $7,900 it is still reportable income.  So, if you like to pay penalties the least you can do is keep your expense receipts organized for ten years which is the statute of limitations for the IRS and possibly many States to reach back and call you in for an audit.  This can be especially painful for a seller who has a breakout year and sells 20K after only selling an average of $3,500 for the previous nine years.

[sweddy22]

I found this too... still not sure how to “show” the IRS I’m just selling old stuff. I had 198 sales and 4K in profit. Broke up a lot of old LEGO sets.  No receipts obviously, so I’ll just be ballparking cost basis. Made a spreadsheet showing I didn’t make money. 

Probably will use a CPA vs TurboTax this year. 

[sweddy22]

Was surprised myself. As you can see, it recently changed regarding 1099s. I received one from PayPal. 

https://sovos.com/blog/2019/12/10/illinois-enacts-form-1099-k-reporting-requirements/

Thanks Pritzker?