Was I supposed to get a 1099-K for personal items sold?

[Mavrick88]

Ok, I don't have a business and I don't obviously collect taxes because of that. I sold a lot of personal items for family members and myself for various goods like video games, old stamps, silver coins/bullion, ect. in 2016. Most were on eBay and some were "Invoices" I sent over PayPal. Apparently that comes to 235 transactions and over $20,000. But what I don't get is I'm supposed to report this to the government as income because I got a 1099-K form from PayPal? I didn't profit that, these items cost money at some point in my life or family member's lifetime. Why do I have to report this as income? This is going to be a HUGE hit to my taxes and I'm paying on them because of that? I think something is wrong but I'm not really sure where I should start or who I should ask. It's not like this was actually income for myself. I don't know what to do. Any suggestions as to where I should start?

Thank you,

John

[Whac-A-Mole · Accepted solution]

The fact that you are selling these items and collecting payment makes it a business,it does not matter you bought it for resale or for personal consumption.

You have to report them as income,but IRS expects most household items we bought,we paid more than we sell for,unless it is precious metal or rare art.

Use the small business schedule to report .

by the time you deduct your cost,mileage to post office,postage,fees galore and if you prefer,office deduction,you wont be making much.

you can download the form and explanation. 

[Whac-A-Mole]

The amount shown on 1099k is the gross,you have to take out returns,chargeback,fraud,sales tax to come up with net sales

[Mavrick88]

So basically, I have to prove costs to these items, including shipping, PayPal fees, ect, and report that as a "Business Expense" on the Schedule C in taxes? Do you have a suggestion as to how I prove costs for silver or just items that were around the house that have been purchased over many years, throughout the years and I may not have access to those purcahse receipts?

[DPCreations]

For schedule C you need cost of goods sold for the items sold.

Operating costs will be expenses; that includes fees.

For cost of coins, face value would be what to use unless you have documentation dates purchased.

[Whac-A-Mole]

you dont need receipts,just put an estimate of how much you paid for  long ago or market value .

[DPCreations · Accepted solution]

Accoding to PayPal you sold items and they were business transactions.  You will need to deal with it appropriately.

Old stamps and coins are investments and appreciation on them IS taxable income.

If someone gave you something free and you sold it then the revenue is profit and it is taxable.

Your total is serious income and you should probably talk to an accountant and start getting avaialble receipts and documentation together to support your claims.  You should have been recording all associated expenses into your accounting program in advance.

First is to accept that your activities are business activities

Next, for that amount you should work with an accountant.

[Mavrick88]

Alright, I guess that makes sense. I just need to prove "expense" of these items and for the ones that I can't prove, I'm basically out of luck. Gotcha. That's pretty crappy but I guess I undesrtand it to an extent. Ugh, what a mess.

Thank you for the suggestions and help.

[Whac-A-Mole]

I think we get 54 cents per mile for business and 19 cents per mile for medical appointment.

If you bought shipping supplies,that deductible as well,you may want to talk to your accountant if it is worthwhile to deduct home office and related utilities,repairs,tax etc,as this will reduce the cost of your home when you sell it.

If you have more than one phone,then you can deduct the cost of one phone for business,sotfware,hardware and ISP expenses are also deductible,entertainment cost  like entertaining your clients or suppliers draws attention. 

advertising like paying for search is deductible,