How do I report income on something I sold (received a new item for free, and sold it on eBay)

Forum|Forum|1 year ago
April 5, 2025
1 reply
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Did not receive any 1099 form as the net amount after eBay's fees etc was nowhere close to $5000 or my state's $1000 1099-K threshold. But TurboTax is saying I still need to report the income, but doesn't give further instructions on where to do it.

Tax Advice

KrisD15

Go to

Wages & Income

Investment Income

Stocks, Cryptocurrency, Mutual Funds, Bonds, Other

Select "Add an investment" if necessary

Select "Skip import" if necessary

Select "Other" for investment type

Enter what you sold it for (sale proceeds) the date when you got it and the cost basis

usually the cost basis is what you paid to buy it.

The profit will be capital gain income.

If you receive items to review and then sell those same items on E-Bay, you may need to report this as a business.

HERE is a link to a similar question with details on how to report that.

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tenniseric98Author

Hm, thanks for the reply. But I'm confused why this would be investment income. A family member got this item as a gift from work, and then I sold it on my eBay account. Does that change anything?

KrisD15

It may seem far-fetched to call a personal sale as an investment, but that is the section this type of income is determined.

It isn't earned wages or self-employment.

It isn't Interest you earned on a savings account.

It's "Capital Gain" when you sell something and the money get for selling that item is more than what you paid for it.

People don't report these sales often, because usually the items they sell, sell for less than what they paid to purchase the item, such as when people have garage sales.

But when something is sold and results in a gain, the IRS wants their share.

If the value of the gift from work was included in this person's income (included in wages) then you can use that amount as the cost/basis/value in order to compute the gain (or loss).

If the gift was something worth $100, and $100 was added as wages in Box 1 of that person's W-2, only a sale of more than $100 would be reported as a gain.

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