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[Durask]

This year sold a bunch of stuff on Ebay - old laptops, computer parts, most of my old video games, etc - main reason being that I wanted to get rid of stuff and also because I realized that I was hoarding a lot of stuff for no good reason.

So I sold most of my old video games - from PS1 and on, my Wii and Wii U, some old electronics like receivers, turntables, bunch of anime DVDs, some anime figures I realized I have absolutely no use for, etc etc. All in all a few thousand dollars (it added up).

Few days ago I get a tax form from Paypal. I look at it and it says that Paypal reports transactions to IRS if you have sales over 20,000 or more than 200 transactions, neither of which apply to me.
After some googling I realized that my state decided to lower this threshold to $600, so I got reported.

Now by law you do not have to pay tax if you are selling your stuff at a loss - however if you declare a loss there is a high risk of audit and if audited you will have produce proof that you sold your stuff at a loss. I don't have receipts for most of my stuff - PS2 games I bought at Gamestop years ago? Old receiver from electronics store that does not even exist any more? Nope. Also, the only way I can get details on my Ebay transactions from 2017 is to request details from Ebay which is a lengthy process.

So, kinda sucks. I guess the lesson here is always keep your old receipts - you never know when you'll need them.

 

[nush]

I'd wait until the IRS actually contacts you. Good chance that the diligence from Paypal is just to send you the form and leave it your responsibility to report yourself.

 

[Vicetrailia]

Might you be too small potatoes for the irs to worry about you reporting these items at a loss? They care when Donald Trump does it, but they only care about the small guy when you actually owe something.

 

[AlteredForms]

I have never had this problem, but then again I don't sell that much stuff and live in the US.

 

[Gandara]

I would first come up with an itemized list and just come up with an approx purchase price and locate you sell price. Honestly I think the Irs is a little more lax in proving how much you brought it for. I had an issue with a house I sold and they didn't even need the hud. They said they would trust my numbers.

If you are seriously concerned, call the irs. They can help you with your questions. Everyone I've ever talked to were at least nice. It might suck having to wait on hold but do it if you are truly concerned.

 

[Croatoan]

If you made like 5k+ the IRS might come looking for you. If not they likely wont bother. They have bigger fish to fry.

 

[x3sphere]

I think they would be willing to work it out with you if you did get audited. Seems it's pretty obvious you did not make a profit from these sales, they could always just look up what the market value of the items was over time. If everything depreciated - which it probably did - then you should be fine I assume.

 

[BadHand]

Tax on $600 of sales would be fairly minimal and probably a lot less problematic than a tax audit and the ongoing anxiety of failing to disclose it.

 

[Ancient Dragon]

Good to know, I’m also thinking of selling a bunch of junk I no longer use.

 

[NickFire]

I'd wait until the IRS actually contacts you. Good chance that the diligence from Paypal is just to send you the form and leave it your responsibility to report yourself.

I wouldn't follow this approach unless you confirm it with a tax professional. With e-filing, I've heard of people getting rejected from filing for things like claiming a child already claimed by a different person. I may not have the stories straight, but if I am anywhere close I could envision an automated system picking up an omitted 1099 and rejecting the filing, or triggering a review. If you end up owing on it and find out later, you could end up with interest, penalties, and worse yet, possible claims of attempted tax fraud.

 

[LordPezix]

Shoulda sold on craigslist

 

[LOLCats]

did you do your taxes yet? you should add in the extra sales and see how much it affects it? I mean if its 14$ just take the loss...

 

[Atrus]

https://www.irs.gov/businesses/small-businesses-self-employed/tax-tips-for-online-auction-sellers

"If your online auction sales are the Internet equivalent of an occasional garage or yard sale, you generally do not have to report the sales. In a garage sale, you generally sell household items you purchased over the years and used personally. If you paid more for the items than you sell them for, the sales are not reportable. Losses on personal use property are not deductible, either. However, see Sales of Appreciated Assets at an Online Auction below for gain reporting"

https://www.hrblock.com/tax-center/income/other-income/capital-gains-garage-sale/
https://ttlc.intuit.com/questions/3462386-1099-k-personal-items


Speaking as a former Canadian tax auditor, I'd get a list from ebay over what you sold and create a spreadsheet indicating the item sold, the price sold for, and the cost it was likely purchased at using your best available research (keep supporting research documents). Any photos of the items dated in the past also helps establish them as used personal goods.We aren't allowed to make assessments under the assumption that your cost of sales were $0 so we'll go with your research if its reasonable unless we can dispute it as being unreasonable. This way if anyone inquires, you have records to present (keep a back up and physical copy so you don't lose your work). Also make sure to print the IRS website as backup as well.

 

[Very Berry Sunday]

This year sold a bunch of stuff on Ebay - old laptops, computer parts, most of my old video games, etc - main reason being that I wanted to get rid of stuff and also because I realized that I was hoarding a lot of stuff for no good reason.

So I sold most of my old video games - from PS1 and on, my Wii and Wii U, some old electronics like receivers, turntables, bunch of anime DVDs, some anime figures I realized I have absolutely no use for, etc etc. All in all a few thousand dollars (it added up).

Few days ago I get a tax form from Paypal. I look at it and it says that Paypal reports transactions to IRS if you have sales over 20,000 or more than 200 transactions, neither of which apply to me.
After some googling I realized that my state decided to lower this threshold to $600, so I got reported.

Now by law you do not have to pay tax if you are selling your stuff at a loss - however if you declare a loss there is a high risk of audit and if audited you will have produce proof that you sold your stuff at a loss. I don't have receipts for most of my stuff - PS2 games I bought at Gamestop years ago? Old receiver from electronics store that does not even exist any more? Nope. Also, the only way I can get details on my Ebay transactions from 2017 is to request details from Ebay which is a lengthy process.

So, kinda sucks. I guess the lesson here is always keep your old receipts - you never know when you'll need them.

What state is this?

 

[n64coder]

Mass & Vermont have this policy. Other states may follow them in future years.

If I look at the IRS website here: https://www.irs.gov/businesses/small-businesses-self-employed/tax-tips-for-online-auction-sellers It says: If your online auction sales are the Internet equivalent of an occasional garage or yard sale, you generally do not have to report the sales. In a garage sale, you generally sell household items you purchased over the years and used personally. If you paid more for the items than you sell them for, the sales are not reportable.

 

[Durask]

What state is this?

MA