View Full Version : Does selling your items consider an earning?

01-21-2014, 12:08 AM
This is something I really get confused and am not sure about whether or not I should file the tax. Ok, let's say you have a computer and a smartphone you want to sell, and according to the IRS, you should file tax when you have made $600 or more. The company in which you are going to sell your computer and smartphone to will pay you about $650, therefore, you have earned or made $650 right? Do you still have to file tax on this earning because you are selling your items to a company (let's say Ebay, for example), which is something you don't worked to earn nor the company requires that you have to fill out the W-9 when you've made more than $600 by selling your electronics. I don't know how this works but I would like some suggestions. I know this sounds very confusing, but don't get too stress about it, I just want opinions.

01-21-2014, 12:41 PM
There's actually a set amount that you have to make before you have to claim it. I can't remember what it is so it's something you'd have to look into. Just know that not every single penny has to be claimed but also know I'm no tax expert LOL

01-21-2014, 08:39 PM
From what I have read, if you sell items (whether it is new or used) you only need to pay tax if the buyer is located in the same state as you.

For out of the state sales, you do not need to pay tax unless the value exceed $4,000,000 (4 million dollars).

However, it is suggested that if you only sell one item here and one item there on rare occasions, you don't need to worry about it even if the buyers are from the same state. The situation changes when you sell many items on a regular basis.

Source information for the above statements - http://www.ebay.com/gds/State-Sales-Tax-and-The-eBay-Seller-/10000000002187060/g.html

I have personally sold a total of dozen items on ebay over the years and around 20 items on Yahoo Auctions over a decade ago. Most of these items were used computer parts (graphic cards, CPUs, motherboards, etc. used by myself but sold when I upgraded my own computer) with one exception which was a brand new custom built desktop computer system (built by myself) to make a little profit when i was still in the high school lol. I remember I sold the computer for $1300. The combined prices of everything I have sold was definitely in thousands. I never paid a cent of tax for these sales. Although I have never got into any trouble about the tax issue, please don't quote me on it...since all these events took place years ago when I was still just a student.

01-22-2014, 05:38 AM
If it's personal items that you are selling once in a while due to not needing them anymore then I think it's ok.
However if it's more business like with a lot of transactions, then I'd take a deep look into taxation. If you do it like this it might even be easier to start your own company, that way you can easily separate the financials from your personal ones.

01-22-2014, 06:08 AM
From what I've heard and what i saw on television, E-bay is the one who should pay the taxes and not you. I believe there is already a deduction on your part when you sell your items to a company and thus paying taxes for your earnings would amount to double taxation. I'm not sure what country or state you are at but depending on the laws in your state, there should be a provision there which states if you should be taxed or not.

01-23-2014, 12:41 AM
I see. I'm not going to worry then since I sell my personal items once in a blue moon, which is not business-related items. Thank you guys, for making a clarification on this. I'm greatly appreciated!

01-26-2014, 11:50 PM
Selling items at a profit is of course considered as an earning. And you need to pay taxes of course. The $600 minimum is based on the profit that you have made and not the cash you have received. Let's say you sold an item worth $600 and received cash of $600. Are you required to pay tax in that case? Of course not. Because there was NO GAIN or PROFIT on your part.

I also agree that I think eBay already deducts tax from the pay that you receive.

01-27-2014, 04:01 AM
Sounds like you are selling second hand items. I wouldn't worry unless you sold a lot and ebay sent you some type of tax document showing they have reported earnings to the irs.

Selling brand new items may be a different issue with sales tax.

01-27-2014, 03:00 PM
If you sell enough items through eBay, you will get a tax form from PayPal. But you have to have like 200 different transactions and make more than $10,000 or something like that. Other than that, I think you should be fine.

03-03-2014, 10:11 PM
There is no reporting requirement when you're selling small items of personal property, which were presumably bought with your after-tax dollars. In theory there is no actual gain, as you are trading a widget worth $10 for $10 cash. This doesn't apply for things like real estate, currency, etc, or if you are doing this on a larger scale as a business.

03-03-2014, 10:23 PM
Yes. According to the IRS. They consider any money you get taxable income. Sites like, Paypal, and Amazon payments are required by law to report all earnings over $400-600. It does not matter if you report it or not. Those sites will.

03-09-2014, 12:32 PM
I think if it's just a few then it's not necessary to declare it. But if it's going to be like a huge auction, then it must be declared as far as I know. Upon purchasing or owning the material that you wish to send, I believe you have already paid for that tax of that particular item so it's actually a bit confusing to me as well as to why some would still need to pay for the tax on it when they decide to sell it.

03-20-2014, 06:17 PM
In most circumstances you do not have to declare money you have made from selling personal items. So, if you are just selling a few things in a car boot sale, at online auctions or through newspaper advertisements then you should be OK. However, if you make over a certain amount of money from the sale of your items then I think you do have to declare it. If you check out the sellers area on eBay there used to be an article outlining regulations about this to help out people who sell regularly, The information was not specific to eBay, it was just general guidance. I think there are also separate rules about making money selling cars. This is either the number of cars sold in a year or the amount of profit made from them I can't remember but it is worth checking out this information. Government websites should also be able to offer guidance on this matter.

03-20-2014, 11:56 PM
It all depends on your location. Contact your local tax office to get your facts straight before you make any mistakes.

03-21-2014, 12:37 AM
These IRS guys are always everywhere trying to snatch some money from you. I am sure not every person will file a tax file especially was just exchanging cash and no receipt was written such cash can not be traced. I think that is what people do these days.

03-21-2014, 09:07 AM
If you realize a capital gain on personal property, you are supposed to report said gain. An article you should check out is: Ten Important Facts About Capital Gains and Losses (http://www.irs.gov/uac/Ten-Important-Facts-About-Capital-Gains-and-Losses). I hope the information proves helpful. Good luck.

03-22-2014, 03:15 AM
This was also super confusing for me at first but one of my friends also told that there is a certain amount that you have to declare for taxes like especially if it's going to be a huge auction. But I'm still bothered somehow because when buying stuff, we have for those taxes right? I still really don't see the point.

03-22-2014, 08:26 AM
I think it's not considered a business when you are just selling personal items, and therefore you shouldn't be taxed for it. Furthermore, getting paid $600 for your items isn't the complete picture as you most likely have spent a lot more on it as an expense to get it and therefore you most likely are even selling it at a loss since you are selling it as a second hand item. I think you'd only be taxed once you actually make the act of selling second hand items as your business and start gaining a significant amount of income from it.

03-26-2014, 07:15 AM
I wouldn't have thought that small amounts of money made online need to be taxed. Surely selling on ebay doesn't count as taxable. I would do some research and see what the minimum is before you have to pay tax. I guess it's different for different countries and different states. Just do whatever is necessary to keep within the law while still making a healthy profit.

03-26-2014, 08:53 AM
I think it's not considered a business when you are just selling personal items, and therefore you shouldn't be taxed for it.

See the link (http://www.irs.gov/uac/Ten-Important-Facts-About-Capital-Gains-and-Losses) I posted above. If you realize a capital gain, it is reported as such. If it is considered business or not is irrelevant.

03-28-2014, 04:24 PM
There are 2 different tax situations you need to be concerned with. Sales tax should be collected when the buyer is from the same state, but that is dependant on the state you live in. If you are only selling once in a while, I don't think you need to worry about it. If you are selling and making a living, you should talk to tax professionals to make sure you are covered. The other tax is income tax. In the US you have to report anything over approximately $600.00, so you will need to start paying the IRS their share. Again, it would probably benefit you to talk to a tax professional and they will usually give you advise for free.

wandering wildman
03-29-2014, 07:46 AM
Although, I wouldn't support doing anything illegal. I just can't imagine the government has the time and resources available to pester someone who sold a $500 laptop. I think if you get cash for your product the risk of being caught would be SO small. I hope this helps.

03-31-2014, 08:09 PM
If you are selling your items on an occasional basis, you do not have to claim them on taxes. If you're having a yard sale every weekend, then yes, you need to claim the money made. I would consult a tax professional if you are ever in doubt.

04-02-2014, 11:21 PM
Yes, you do need to pay taxes for gains that you earned from selling. This kinda blew my mind at first because I couldn't fathom possibly getting taxed on stuff I OWNED that I was selling. But either way, that's the way the world works and if you don't wanna go to jail, you'll need to keep track of all your sells after the 600 dollar mark.

Allan Madan
02-27-2015, 12:11 PM
It depends on your intentions.
If your intentions are to make a profit and there is nature of trade.
It is considered a business are it is required to be reported on your tax return.

Madan Chartered Accountant

07-27-2015, 04:53 PM
Personal - no.

Merchandise/Dropship - yes.