Sales expenses on the sale of personel items that made a profit

Forum|Forum|1 year ago
February 12, 2025
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I sold on ebay last year and made a little over $5000 in sales therefore I received a 1099k. I sold around 30 items give or take. Most of the items sold were from my old game collection, some of it still sealed. I bought these games for personal use years ago, but never got around to playing them, hence why some of them are still sealed. I decided to sale these to make some cash to fuel other hobbies, but alot of the items sold for more than what I paid for them netting me a nice little profit that is taxable. I have looked at a number of other posts and I know there is two ways I can go to file my taxes this year. Go as a business seller and file a Schedule C or go as a hobby seller and file under Schedule D for personal items sold for a profit. After reading I think I should be classified as a hobby seller and file Schedule D for personal items. I know I will have to list each item individually and I do have past invoices of the items from years ago in my email logs so I can use the original cost of the item when listing each item. I am using Turbo Tax online, after listing a few items it also asks me if their is any selling expenses I want to list. After doing some research I found out ebay seller fees and ship and handling fees can be considered as selling expenses. Can I take these as deductions when I file under a Schedule D as a hobby seller. Any info or help to my problem would be greatly appreciated.

Vanessa A

No. If you are choosing to treat this as a hobby, you cannot deduct any associated expenses.

However, since you are simply selling personal expenses, the correct way to do this is to enter them as sales of investments. When you do this you can deduct what you paid for them, along with the expenses and only be charged on the net profit. Also, since you say you bought these years ago the gain on the sale is taxed at Capital Gains rate instead of ordinary income rates as long as you owned them more than a year.

If you would choose to do this as a business, then you would need to pay SE taxes on any profits you earn, however, expenses are deductible.

The decision is mostly about intent. If you plan to start collecting and selling, then it could be either a hobby or a business. However, simply selling your items you no longer need are reported as sales of investments.

How do I enter a 1099-K for personal item sales?

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SaberfalconAuthor

Okay another question are video games and TCG cards like magic the gathering considered personal items or collectibles if they sold for a profit and can be taxed by the IRS.