What if your a seller who lost money selling on eBay, how do you report that when filing taxes?

[bigdicebuddha]

Let's say I had payouts totaling $20k, but the cost I spent on said inventory was $21k, how do I report this? Thank you in advance for any help or guidance.

[bigdicebuddha]

Thank you. 

[coolections]

This topic comes up daily. If there is 20 responses, you get 20 different answers, just like what you received here. Everyone has their own opinion on how it works. I would go to a tax person and ask them.

[dnasilver]

and those deductions are for legal entities and not for the occasional, hobby, and/or seller of inherited items.  The latter group has limited deductions available.

[dnasilver]

Is it earned or unearned income? If it is earned, make sure you pay your FICA taxes too.

[stainlessenginecovers]

Well, again- if you sell $20k and have $21k in receipts, the 15.3% Self Employment Tax on $00 is still $00, since you 'earned' nothing (per the OP)

[m60driver]

It begs the question why would anyone be selling $20k of goods on Ebay without making a profit?  Rest assured it will also raise questions with the IRS.  Hire an accountant and get your ducks lined up in a row. 

[findbeautyinside]

Your response is unreasonable.  I have. been selling off very expensive jewelry  I bought many years ago retail and even have most of the receipts saved in my files for the purchases since they were in the thousands. I have lost a fortune selling these things, never made a dime selling them on eBay.  If I am required to treat these as business income on a self employment form to the IRS due then it is the IRS, not me, who is establishing my eBay selling as a business and I should be also be able to write off the "business loss" since I am also having to devote all this time into paperwork.  It is a significant loss and all documented with receipts.

Lots of people sell on eBay without making a profit for heavens sakes!  It's a way to at least recoup some of the money we invested in "things" we no longer can use or need.  Most people shop on eBay looking for a bargain.  It is sellers like me who have those bargains.  If I sell a pair of diamond earrings I paid just under 16,000 ten years ago with a net proceeds of under 12,000, and a pair of Emerald Earrings I paid over 10,000 for over 15 years ago for a net proceeds under 8,000 and then sell a couple of other less expensive things that I also am losing money on (and I have documentation for the my original purchase price on all of these things showing I am losing money on EVERYTHING) then I still have to treat it like a business because of that 1099, it's the IRS forcing me into being in the "business" of selling on eBay and I should therefore be able to treat my eBay selling as a business and deduct ALL of my selling expenses, including my auto expense for trips to the post office, my repairs and clean up done by my jeweler to prepare them to sell, my original purchase price as per the old receipts and documentation, advertising for promoted sales on eBay, accounting charges if I have to pay a CPA for doing my taxes because of the eBay "business".  It's not a hobby loss if I am forced to treat it like a business  by the IRS!  Okay, this is not tax advice.  This is just someone who says the IRS can't have it. both ways if they make me increase my losses on the things I sell on eBay by forcing me to pay for legal and/or accounting services to keep up with it all because of that blankety blank blank 1099 they are requiring. And for this year, 2022, it will go out to everyone who sells $600 in gross!  Unbelievable this harassment really.  We are broke so we sell our stuff on eBay, so the IRS makes us spend more money we don't have proving we didn't make any money doing it!  

[winterpalace25]

If you are selling very expensive personal possessions at a gain or a loss, you need to file Schedule D, Capital Gains and Losses.  This schedule will divide your assets into long term and short term, and tax accordingly.  You will be able to subtract the original cost of these expensive items and, if the loss is only a few thousand, deduct the loss from your other income. Losses are limited, but can be carried over to future years.

[buyselljack2016]

May be so for you, but in the OP's case something seems to be amiss when there is an overwhelming amount of "new" vs. "pre-owned"  listed/sold.   (not their 1st year on eBay)

[bigdicebuddha]

It’s not my first year however I went out trying to do resell of new items; and just wasn’t very successful at it. Tried to resell different things for a profit and didn’t make money in the end. A lot more difficult than I thought. It’s been tough trying to make my money back when the items purchased aren’t cheap. My point is that I just didn’t make money in the end and was looking for advice on how to proceed. Not trying to get one over or be “amiss”. 

[buyselljack2016]

Not trying to get one over or be “amiss”.

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Not saying that you were/are "trying to get one over"   😊

your reply confirms that something was "amiss" in your business model.  🤔

[bigdicebuddha]

No offense taken just trying to clarify and appreciate the feedback you and others provided. 😀

[bigdicebuddha]

Also you are 💯 on point that my business model was amiss!🥲