Ebay 1099-k deductions

Forum|Forum|1 year ago
April 9, 2025
1 reply
0 views

I sold about 100 items on ebay ($20,000) accumulated over the years. At what point, $$$ or quantity of items, does the IRS consider the activity a business thereby allowing deductions and losses?

RobertB4444

If you are selling your personal items just to get rid of them (like an online garage sale) then it is never a business. If you are trying to earn money doing a side gig on eBay then the very first dollar that you earned you were a business and should have been entering it on your tax return.

@2025taxman

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"

2025taxmanAuthor

Thank you. Guess I’m getting caught up in the definition of ‘earning money.’ The IRS considers the sales income but deductions for shipping, fees and other possible expenses can only be deducted if classified a business. I had income, I have items costs & will report it. Just trying to understand at what point I could also deduct add’l expenses or losses.

RobertB4444

The second you make money. If you are doing personal sales then the expenses can only be deducted up to the amount of income. It's treated as a hobby. You're still supposed to report the amount on the 1099-K but it can never be a negative number. At best it zeroes out with the cost of the items that you sold.

If your intention is to make money though then it is a business the second you start earning. Then you would enter all of your sales as income and deduct all of your costs. If you end up with a negative number then you lost money this year.

If you are losing money at a business for three years then the IRS considers that a hobby.

@2025taxman

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"