- Days left
It seems the IRS wants a piece of any type of income you had last year... So it's not uncommon for taxpayers to ask about what they're supposed to do with the money they made from a garage sale. The answer to this question is pretty simple. If you sold a handful of personal items at a garage sale (or via eBay or another online auction site) you don't have to report this income on your taxes. So long as this is something you're not doing on a regular basis, you're in the clear.

The issue gets a little more complicated if you sold any "appreciated assets," which are things like art, antiques and collectibles. If you sold them for more than you paid for them, you'll have a gain that should be reported on your income taxes. The same goes for property that you used in a business and claimed on your business tax returns. The sale of that type of property is likely reportable on your income taxes.

If you've started an online auction business or if you have recurring garage sales (that essentially become a business), you probably have to report this income on your income taxes. It's usually pretty clear when you're intending to make a profit at these activities, and that's when your eBay selling or your repeated garage sales actually become a business.

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.



Increase your money and finance knowledge from home

Understanding Credit Scores

Credit scores matter -- learn how to improve your score.

View Course »

Basics Of The Stock Market

Stock Market 101 - everything you need to know but were afraid to ask!

View Course »

TurboTax Articles

What Are the Tax Penalties for Smokers?

Starting in 2014, the Individual Shared Responsibility provision of the Affordable Care Act made you responsible for having minimum essential coverage, or MEC, in health insurance. Otherwise, you need to be eligible for a health care exemption, or you could pay a penalty when filing your income tax return. This requirement for minimum essential coverage applies to smokers and nonsmokers alike. If you're not covered by an employer's health plan and are a smoker, you can go to the health care marketplace to find MEC. If you're still unable to comply, you may have a penalty applied.

A Brief History of Income Taxes

Did you know President Abraham Lincoln, one of America's most beloved leaders, also instituted one of its least liked obligations - the income tax? In this brief history of taxes, see the historical events which shaped income taxes in the United States today.

How to Itemize Taxes When Claiming Dependents

Claiming dependents and itemizing deductions is an effective way to save money on your income taxes. Each dependent you claim allows you to reduce your taxable income by one exemption. Get a step-by-step overview on how to take advantage of itemizing your taxes when claiming dependents in this article on tax tips.

Add a Comment

*0 / 3000 Character Maximum