So I sold something on ebay for $650 but bought it for $800...so there is no profit...so what do I do. And I have no income except SS...do I have to file at all?
Only your IRS agent knows for sure. Maybe.
Proper treatment is probably to report it as income of $650, and then cost of good sold as $800, and have a loss of $150 from your ebay business that would offset other income and potentially lower your tax burden. And if your income meets the criteria, you might even quaify for EIC. Consult your tax software or a qualified tax preparer. (In short, you might come out ahead by filing).
Let’s say you bought commercial real estate for $200,000 and you sell it several years later for $250,000. After the closing, the title company or other closing agent files a 1099-S with the IRS, reporting that you received $250,000 in proceeds from the sale.
On your tax return, you need to list the $250,000 as gross proceeds and $200,000 as your basis, subtract your $200,000 basis from the $250,000 gross proceeds, list the $50,000 net as a long-term capital gain, and then pay capital gains tax on the $50,000 gain. If you fail to do so, you will get a letter from the IRS saying that you received $250,000 that you failed to report, and because you did not report it they are assuming that it was all ordinary income, so you now owe income taxes, penalties and interest on the $250,000 in unreported income.
This is basically the same thing, but it will apply anytime you sell anything and receive $600 or more. Happy record keeping!
In the case you mentioned, you’ll have to prove your cost basis was $800. That means you’ll need purchase receipts for the items you are selling on Ebay. Good luck with that, as a lot of the items I see there are would be like yard sale stuff and those receipts were tossed long ago. Going forward, you’ll need to maintain all you receipts for proof if you stay in the Ebay business.
you will get a 1099k it is over 600 dollars. Plus Ebay will include tax and shipping and their fees. You will have to do a Business tax form for the IRS. That is what Biden did with this 600 tax reporting issue.
Even if you bought something for 850.00 do you have the receipt to show the IRS the actual cost if not then it will be considered profit.
“So I sold something on ebay for $650 but bought it for $800...so there is no profit...so what do I do. And I have no income except SS...do I have to file at all?”
No requirement to file your ebay transaction.
You’re required to file a return for 2021 if you have a certain amount of gross income. Gross income requirements for each filing status are: Single filing status: $12,550 if under age 65. $14,250 if age 65 or older. Married filing jointly: $25,100 if both spouses under age 65.
I hope you have a receipt and can prove what the item cost you - otherwise it looks like 100% profit.
So I sold something on ebay for $650 but bought it for $800...so there is no profit...so what do I do. And I have no income except SS...do I have to file at all?Yes you have to file. Ebay files a 1099 for your gross sales. You have to have proof of cost of goods sold to not pay tax.
Otherwise never mind any income tax. You'll have to pay self-employment tax (AKA SS) 15%+ of the $650.00.