Selling personal used item on eBay occasionally?
How can I sell personal used items on eBay at a loss or for less than what I paid for without being liable for self-employment tax or income tax in Memphis, TN, USA, considering it as hobby income?
Answers
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If a car, furniture, jewelry, collectible, or other asset is used for personal use and wasn't used in a business, a rental property, or as an investment, then you normally don't report the sale on your tax return.
You can't deduct capital losses on the sale of personal use property. A personal use asset that is sold at a loss generally isn't reported on your tax return unless it was reported to you on a 1099-K and you can't get a corrected version from the issuer of the form. An asset is considered sold at a loss if the price you got for it (minus any selling fees) was less than the price you originally paid for it.
If you did receive a 1099-K, then here is a great FAQ in our software that answers how to enter personal items sold for a loss in our software:
Report your form 1099-K in the Form 1099-K section of the software.
Follow these steps:
- Start in the 1099-K Income section. Your 1099-K Income
- Answer questions about where the Form 1099-K came from.
- Answer Yes to the question asking if you have personal transactions.
- Answer Yes to the question asking if any of your 1099-K personal transactions were from the sale of a personal item sold for a loss.
- Enter the total amount of payments received from the sale of personal property at a loss that was reported on your 1099-Ks.
That amount will then be included at the top of Schedule 1. This will include the correct 1099-K amounts on your return while letting the IRS know what amount of your 1099-K income is from personal losses and isn't included as income.
