CPA help

January 23, 2021, 03:56 PM

Flash-LB

They probably weren't flagged if the individual deposits were less than $10,000.00

Here's what the IRS says about casual sales of personal property:

https://www.kiplinger.com/arti...:text=If%20you%20don't%20know,FMV%20or%20cost%2Dbasis).

If you occasionally sell something online there’s little to worry about, especially if you’re selling it for less than you paid for it. Even if you occasionally sell one of your old Beatles albums for a decent sum it’s not critical for you to report this income to the IRS.

But if you decide, like thousands of other people, to go into business bargain-shopping at yard sales and flea markets and flipping what you find for a profit, then you’re technically running a business. You’ll need to report this income on IRS Form 1040 Schedule C. This form is used by sole proprietors to report business-related income. You’ll want to keep records of what you paid for the items (the cost basis) so you can report the net profits (rather than the full sales price) from these transactions.

January 23, 2021, 04:08 PM

ZSMICHAEL

IMHO I would treat them as property with capital gains and or losses on the sale. I would rather report them than have the worry. Just keep a record of the sale.

January 23, 2021, 04:18 PM

sjames

quote:
Originally posted by Flash-LB:
They probably weren't flagged if the individual deposits were less than $10,000.00

Here's what the IRS says about casual sales of personal property:

https://www.kiplinger.com/arti...:text=If%20you%20don't%20know,FMV%20or%20cost%2Dbasis).

If you occasionally sell something online there’s little to worry about, especially if you’re selling it for less than you paid for it. Even if you occasionally sell one of your old Beatles albums for a decent sum it’s not critical for you to report this income to the IRS.

But if you decide, like thousands of other people, to go into business bargain-shopping at yard sales and flea markets and flipping what you find for a profit, then you’re technically running a business. You’ll need to report this income on IRS Form 1040 Schedule C. This form is used by sole proprietors to report business-related income. You’ll want to keep records of what you paid for the items (the cost basis) so you can report the net profits (rather than the full sales price) from these transactions.

I saw that article. I fear that my selling could be construed as business due to volume alone.

January 23, 2021, 04:18 PM

sjames

quote:
Originally posted by ZSMICHAEL:
IMHO I would treat them as property with capital gains and or losses on the sale. I would rather report them than have the worry. Just keep a record of the sale.

That's the spirit in which I would report it.

January 23, 2021, 04:29 PM

Graniteguy

Given the fact that you sold the property for less than what you paid for it - it is not a taxable event.

January 23, 2021, 04:47 PM

hrcjon

if you do it enough for it to be a business, its a business. Sch. C. make sure you have good basis data and sleep well. If its casual its a Sch. D. and you will probably be one of the first to report this on occasional casual incidental sales.

January 23, 2021, 04:51 PM

apprentice

Best thing you could have done was not tell anyone about it.

Graniteguy has the right idea otherwise.

Do you have receipts for when you sold AND when you purchased? Burn them if so. You got them all from some dudes in the local classifieds here and there.

January 23, 2021, 04:53 PM

Anush

quote:
Given the fact that you sold the property for less than what you paid for it - it is not a taxable event.

This. You probably just have a hobby that is all! No schedule C is required. Keep all the sale records since you are self employed in case you are audited & need to explain the non reported bank deposits. You may email me for specific questions.

January 23, 2021, 04:58 PM

sjames

quote:
Originally posted by Anush:
quote:
Given the fact that you sold the property for less than what you paid for it - it is not a taxable event.

This. You probably just have a hobby that is all! No schedule C is required. Keep all the sale records since you are self employed in case you are audited & need to explain the non reported bank deposits. You may email me for specific questions.

It's definitely a hobby...