How Do You Report the Sale of Personal Items in 2023? | USTaxAid

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How Do You Report the Sale of Personal Items in 2023?

Written by Diane Kennedy, CPA on May 19, 2023

Unless Congress acts again, this is the year, tax year 2023, that Form 1099-Ks will be issued to sellers who sell over $600 of products or services. These will be the responsibility of 3rd party settlement networks such as PayPal, Square, Venmo, eBay and merchant service providers.

One of the questions that keeps coming up has to do with selling personal items. What happens if you sell some furniture through PayPal for $800 and get a Form 1099-K? You bought the furniture for $2,000 5 years ago.

What’s taxable?

We’re going to assume that you’re not in the business of selling used goods or furniture, so this is a personal transaction. The $800 would be reported on your Form 1040 Schedule 1, line 8z. The basis and costs, up to $800, would be reported on Schedule 1, line 24z. You can’t create a loss with the sale of personal goods, so the net would be zero, even if expenses are more.

Now let’s say you sell the “it” Christmas toy for $2,000. You bought it for $400 and don’t have any costs associated with the sale. You would report the gain ($1600 = $2,000 – 400) on Schedule D.

Don’t ignore your Form 1099-K! The IRS has a matching program all queued up to make sure you report the sales.

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