Garage Sales


Today TaxMama® hears from John in the TaxQuips Forum with a sensible question. “Are garage sales reportable? I have never heard of anyone reporting garage sales. I assume everyone guesses their basis exceeds the gross proceeds and personal losses are disallowed.”


                        

Dear John,

Technically?

Yes, all sales are reportable, since they are income.

Real garage sales DO tend to be people selling they stuff they bought (or were given) years ago and are now selling for pennies on the dollar.

And if you do report these sales…the basis will be reported as the same amount as the sales price, since you cannot take a loss on the sale of personal assets.

However, some people make a business of holding weekly or monthly garage sales (kind of like eBay, or even pre-dating the eBay concept). They buy up stuff cheaply (often buying up an entire garage sale in bulk) and sell at a profit.

That IS reportable. Just like any business.

And remember, you can find answers to all kinds of questions about selling personal property and other tax and business issues, free. Where? Where else? At www.TaxMama.com.

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2 thoughts on “Garage Sales

  1. Judecat says:

    I read about this on the IRS website awhile back – the answer was under “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. Losses on personal use property are not deductible, either.”
    So I would think proceeds from a typical garage sale are not reportable–as long as you didn’t make a profit.

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