What I do if I don't have receipts from 10 to 20 years ago?

[jmd3778]

So I was sold over $600 worth of stuff at a loss. Majority of this stuff is 10 to 15 years old so I have no receipts. How do you prove you took a loss when the government thinks it's income? I am now liable for anything I don't have receipts on, does this mean now I can only sell things on eBay that I have receipts for to prove that I've taken a loss? You know we're all going to get audited because we're low hanging fruit and the people that they want to go after have lawyers who have lawyers. I guess I just really should have held on to those receipts from 2002.

[pburn]

Are you being audited? Is the IRS audit team asking for receipts?

[slippinjimmy]

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@jmd3778 wrote:

So I was sold over $600 worth of stuff at a loss. Majority of this stuff is 10 to 15 years old so I have no receipts. How do you prove you took a loss when the government thinks it's income? I am now liable for anything I don't have receipts on, does this mean now I can only sell things on eBay that I have receipts for to prove that I've taken a loss? You know we're all going to get audited because we're low hanging fruit and the people that they want to go after have lawyers who have lawyers. I guess I just really should have held on to those receipts from 2002.

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You make a reasonable and believable estimate of your item cost. There is no need to "prove" anything unless you are audited. If you are audited you still don't necessarily prove anything as long as you can convince the auditor that your value estimate is reasonable.

The overall audit rate is less than .5%, people who claim very low incomes especially those who are self-employed tend to high higher audit rates as do those who take every deduction in the book and end up with almost zero TAXABLE income.

Still the odds of an audit are VERY low if your tax return has no obvious red flags.

[m60driver]

Unless you have a true income based on Ebay sales then don't sweat it.  Just be as honest as possible.  The odds of a small seller being audited are rather small.  Instead of showing a loss just declare the value as what you sold it for.  If you did make a living out of selling on Ebay, selling a gross of close to or over six figures then consult a CPA.

[caldreamer]

Don't show as price you paid 20 years ago when item was new.    For example, if I bought a new car for $35,000 and now it is a used car it doesn't have the same value.   You show current market value (IRS accepts TurboTax or Thrift Store values). 

[jmd3778]

Not yet because they didn't send out the 1099K this year because they are delaying the $600 threshold until 2024. My question is should I only sell things that I have receipts for. The reason being if I can't prove with a receipt that I lost money it will be considered income to the IRS. But I don't have the receipts from a desk or clothing I've had since 2000. My question is to be on the safe side should I only sell things I have receipts for

[glenvonnie]

The IRS doesn't have the resources or the manpower to go after Ebay sellers, even if they're making 6 figures, they can't even go after billionaires who haven't paid any taxes at all for decades or go after corporations valued at more than #1 Trillion who actually get refunds in the billions, in not 10s of billions.

Why would they want to waste the resources they do have to collect less than $1000 from you ?, it would cost them more than $1000 to do it.

In reality, no human being is going to look at a low value tax return, a computer will, and that computer is not going to recognize the need for documentation or ask for it.

The IRS however, loves for taxpayers to be frightened to death of them, it keeps some of them honest, unlike the mega wealthy who have never been honest in their lives.

I would suspect that a large percentage of Ebay sellers have never included Ebay business profits, and that the combined profit for those sellers is still not enough to warrant the manpower and cost to collect them, when going after one Mega wealthy individual or corporation would generate more tax income for the government.

Those supposed 87,000 new IRS agents are not going to go after low and middle class taxpayers, they're going to go where the money is, and that's why the politicians, who have been bought by "the money", are trying to frighten Americans into opposing the higher funding for the IRS.