It maybe just better to have yard sale at give away prices or just give it away than be aggravated. Sounds too complicated. Even ebay say on their site ……We are lobbying Congress on your behalf to raise the $600 threshold. It’s a threshold that ignores the fact that income from selling used goods, usually sold at a price below the original price, is rarely taxable.
@AnimalFarm341
2 жыл бұрын
I agree. I shouldn’t have to do accounting homework to sell our used stuff. It steals my time and $ in more ways than one. It isn’t worth it, at least not to me.
@cassfonnesbeck8057
2 жыл бұрын
Thanks so much for this video! Just what I needed. I'm trying to sell items I've collected over the past 30 years and this helps me figure out how to treat cogs for them. My general feeling is that most have lost value but at this point its all cash flow.
@JMidwestern
2 жыл бұрын
THANK YOU for this video! In the past few weeks I've seen so many casual resellers freaking out on various forums re the $600 trigger for 1099 issuance in 2022. Many have complained they can no longer sell online because they didn't keep the original receipts from items they originally bought for personal use years ago. I've tried telling them that they do not need the original receipt and advised they speak to a CPA. I'll point them to this video.
@chriswhelan3412
2 жыл бұрын
Great video. The biggest "glitch" I see in all of this is that your personal items are unique to you and your prior use of them is not like anyone else's of a similar item. Example. I sell a personally owned camera that I purchased 20 years ago. I may have taken better care of it than similar cameras being sold. What I sold it for can't be compared to another's sale of a similar camera. Mine is in mint condition and I've serviced it. My works perfectly (IMO). The other cameras may have hidden flaws or obvious damage so they'll have a different value to the buyer and seller. There's really nothing to compare it within the online marketplace so it's unique to me. If you sell a shirt that's been washed 50 times and someone else sells that same exact shirt but it's only been worn once and never washed there's no comparison between the two. The rule change will turn into a real cluster phuck at tax time. It will come back to hurt honest resellers while the sneaky sellers will skirt the system.
@ma1neevent949
2 жыл бұрын
This is the answer I have been looking for, I am starting a reseller business but I have a sizeable personal collection that I want to sell as the first initial inventory of the business.
@CC-ed7od
2 жыл бұрын
The fmv could be the list GW offers with values to deduct when donating, (higher than gs values) & if nothing else it would be consistent. Great video with info that many needed more confirmation on, Good job!
@behappylikeiam9421
2 жыл бұрын
Thank you very much for video and special BIG THANKS for so good pronunciation!!!! So easy listen you and understand what you are talking about. Especially for people with English as second language. Happy New Year! 🍾🥂🎄⛄
@notyourdadscpa
2 жыл бұрын
Much appreciated! 🙏🙏🙏
@PlayRoom44
Жыл бұрын
So I sell hundreds of clothes. I have to actually consider every item at tax time? That’s ridiculous
@freddycisneros5634
2 жыл бұрын
Thank you for this fantastic information. You have answered my questions. You are a big help. Thanks!
@dervishrooster8129
2 жыл бұрын
Thank you for this thorough explanation. Exactly what I needed!
@Sdwhd
2 жыл бұрын
Thank you so much for this video. You have given me a better understanding of estimating my COGS on personal items converted to business inventory.
@dfreak01
2 жыл бұрын
Still confused. I've sold a bunch of personal stuff. My daughter's plush, toys, etc and random house stuff. A ton of it was gifted to us. Do I really have to research every item? What about the ones we got free?
@DandyBeingTandi
7 ай бұрын
Did you ever get an answer to this? I’m so overwhelmed 😢
@annhittner1909
2 жыл бұрын
Thanks for the information. You hit all my questions.
@paulfontaine4931
Жыл бұрын
How does inflation affect your profit? If I bought an action figure for $100 in 2005, then sell it for $300 in 2023, I have a profit of $200. However, if I convert 2005 dollars to 2023 dollars, I paid the equivalent of $159 for the figure, and my profit is $141. Is that legal? It seems unreasonable to measure your profit in terms of what the dollar used to buy in 2005, as opposed to the tax year you're filing. Is my thinking reasonable?
@qweruiopasdfjkl.
Жыл бұрын
This video seems to take many things for granted and is an oversimplification. I wonder if this is a marketing tactic to create demand for expensive consulting services through making something complex seem simple, which can create frustration and a feeling of inadequacy because the viewer doesn’t come away with adequate knowledge regarding the topic the video is intended to address.
@AAA__
2 жыл бұрын
What if you are only selling personal items and you reach the $600 amount on ebay? I used to collect WWE cards but don't want them any more. I am selling them below market value because I want to get rib of them and I will never make as much as I spent on them.
@charleneferguson7564
2 жыл бұрын
I Google questions like that.
@hellobethel7464
2 жыл бұрын
Great video! Thank you so much for all the information you put out for resellers 👏👏👏
@JonathanMartinez-ub6kn
2 жыл бұрын
Great video. This is very helpful. I can use this same concept with buying and selling tickets.
@basecampfirefly
2 жыл бұрын
What about items you inherited? What should one put down for COGS? Market value? Thanks for the videos!
@notyourdadscpa
2 жыл бұрын
For inherited items you typically get what's called a step up in basis. In other words, your cost or tax basis is basically the market value on the date of death.
@jeffreyballard1409
Ай бұрын
@@notyourdadscpa FINALLY, after so much search, buried in the comments of a two-year-old video someone answered my question. I inherited Dad's garage full of collectables and lots of Widgets. I have been selling these widgets 10% under a reputable online seller. I just want to get rid of them. Does this mean I can deduct that as a loss? Or is that pushing it? Also, does a gift also have a stepped-up basis? Mom gives me old craft stuff to sell. Thank you so much. I'm so happy I found your channel.
@notyourdadscpa
Ай бұрын
@@jeffreyballard1409 Yes if you then contribute those collectibles to your business and sell them you should be able to deduct at the stepped-up basis if applicable. And property received as a gift is not stepped up but rather you get the giver's original basis.
@jeffreyballard1409
Ай бұрын
@@notyourdadscpa Thank you.
@majicbean1254
2 жыл бұрын
I sold Pokémon cards that I bough 22 yrs ago. They. Cost me only $5 a pack back then. I sold them for $250 a pack. Does that mean I can only deduct $5 as expense even though the value is way higher today?
@bidergilette5356
2 жыл бұрын
Can any expenses be deducted if you are just doing sporadic reselling as a hobby? I know you still have to report that income, but not sure about the cost of goods sold, shipping expenses, etc. Thank you!
@Fleebit
2 жыл бұрын
If you have to report it and pay taxes on the income then cost of goods shipping expenses fees and all of that would be a deduction.
@christopherdowling3204
2 жыл бұрын
Thank you for the great video! Question if I file as an individual can I still take cogs deductions or do I need to setup and file as a business?
@elizabethbagwell3795
2 жыл бұрын
You know us so well🙌 it's so crazy and hard for regular people to understand thank you!!!!
@janelord3061
Жыл бұрын
Thank you. This is great information and is exactly what I needed to know. I just found out about you and subscribed.
@JL-qs8lu
2 жыл бұрын
Thank you for this helpful video! Quick question - I only sell personal (old/used) clothing on Poshmark and made a total amount that is likely 70% or less of the original value. I do not source items for reselling. I consider it an online garage sale, as all of my items are personally owned and none have appreciated in value. For COGS, do you recommend that I use an estimate of what I believe the original cost of (all) the clothing to be, or instead use the fair market value (which is likely, approximately what I sold it for)? I did not save any receipts for the old clothing purchased many years ago. Considering that I originally paid 70% more for the items sold, I did not profit and the fair market value would be a wash.
@trevorselch5574
Жыл бұрын
I just posted this question in another video. Thx. Disregard
@JeffMuhlbach
2 жыл бұрын
This seems difficult with antiques. If I have items from my parents and grand parents. Very difficult to value
@tnaseb
2 жыл бұрын
You da best, Mark!
@elfredatyler7218
2 жыл бұрын
Can a charitable organization's donation valuation list (such as goodwill) be used as the cost bases for a personal item that is put up for resale?
@ahoward2333
2 жыл бұрын
Thank you for this video! I was so confused about this as I am just starting to sell on ebay and only listing personal items. I don't feel so freaked out now by the taxes! Question: What about items you are selling that your received as a gift? Can you deduct anything from them???
@SamSung33377
8 ай бұрын
wondering the same
@elizabethbromley2580
7 ай бұрын
Thank you for the video. I just received your inventory spreadsheet and after watching this video I am still confused as to how (Where) to account for it in my inventory if it started with items I owned previously? Would I enter it as a line item under purchases as if I "bought" it sometime in January and total the COGS ? My question is how to account for it in inventory. Hope that makes sense!
@notyourdadscpa
7 ай бұрын
Yes you would account for it as if you purchased it in the current year 👍🏻
@untitlednycards7240
2 жыл бұрын
Thank you so much for this!! Super helpful. Does the Cost of Goods include sales tax? Thanks again!
@notyourdadscpa
2 жыл бұрын
Yes, it would include any sales tax paid for inventory.
@603bornlivefreeordie5
2 жыл бұрын
yikes, what a mess, I have antiques, and collectables I bought 25 years ago for my use, no idea what I spent, (yard sales, estates sales, gifts) how does that work, and when you're talking 1000's of items, the bookkeeping is far above what I could charge for my time DOING the bookeeping,
@SpiceBear
2 жыл бұрын
Extremely helpful thank you
@machineman6498
2 жыл бұрын
Thank you for making this
@Kimberly-wt1nu
2 жыл бұрын
Let's say I take a Harry Potter book from my personal library that retailed for $29.99 and I had it for 15 years. I sell it for $10 Free Shipping. What is my taxable profit? Is it $10, minus shipping, minus fees? Which is about $4.09. Do I get to deduct the cost value of $10 and file a loss? $10, Minus Shipping, Minus fees, minus cost value of $10 = Net profit of negative $5.91. Can you do a video showing the math on a white board?
@qweruiopasdfjkl.
Жыл бұрын
For the example where a personal shirt that cost $20 is converted to business inventory for sale, why would you even consider FMV for COGS for that item, whether or not it was less than the actual cost, when the actual cost is known? For the shirt bought from Goodwill for $6, are you not comparing its cost to FMV in your example because you’re assuming $6 is below FMV? When is the LCM rule required? If we are supposed to always use the LCM rule it would appear we might pay taxes on unrealized gains/profit (e.g. we know the cost and can prove it, but we list FMV for COGS because it’s lower). I sincerely appreciate any elaboration on the topic!
@avintagementality
2 жыл бұрын
Thank you so much !!! Wonderful information!
@jcman240
2 жыл бұрын
You can't just take a personal item and sell it as business to take a loss...it should stay personal and no loses taken
@thriftyhokie4029
2 жыл бұрын
Thanks for the video! I appreciate it and the wealth of info you give in these...I am looking to deduct some of my student loans from my business this year in 2022- I know with the Cares Act an employer can set aside and pay a certain amount for an employee and it's a business deduction for employer and does not count as income for the employee. I also saw (read) that self employed can also take this deduction...can you chime in on that with your interpretation? I know a lot of us use our reselling $$ to repay student loans...I appreciate your input...and your knowledge and everything it took to acquire that knowledge...hince the student loan debt! lol
@autumn8034
2 жыл бұрын
My stuff is so old i cant even figure out when i bought it no less how much. Plus people have moved in and out of my house and have left this here and i get stuck with it so i sell it?
@3carsvo
2 жыл бұрын
Thank you! So helpful!
@5trishann
2 жыл бұрын
How much is the basic course your going to offer
@therealjenniferrr
2 жыл бұрын
Another awesome video! 👏
@charleneferguson7564
2 жыл бұрын
Dont they FIRST look at how much your Sales were first?
@charleneferguson7564
2 жыл бұрын
Good question.
@MegVanAbi
2 жыл бұрын
What if all you sold for the year were personal items at a loss and haven’t made it to the point of sourcing items to sell. Is it worth deducting as a personal business?
@my_flippin_journey
2 жыл бұрын
A Personal Business entitles u to multiple deductions, you wouldn't normally qualify for. Every Deduction lowers your tax liability ❤
@lindalee945
2 жыл бұрын
Yes
@robinscarrell4455
Жыл бұрын
I love the way you explain things… Makes everything so much more clear
@francysandoval9918
Жыл бұрын
I am so grateful for the information you share . Thank you for answering questions like these.
@figgyflips689
2 жыл бұрын
Very helpful
@verbalfist
Жыл бұрын
I sold sneakers on goatapp and made $1200 profit after processing and transfer fees. After the tax rep added my 1099k I went from getting $600 back to owing $800. That’s a $1400 swing. I just don’t understand it
@jeanjones1846
Жыл бұрын
It's not easy for me to understand, I contact sellers on craigslist and tell them I will pick up their clutter after the garage sale. That is what I sell on eBay! I live in So Ca, and you would be surprised what people take to the goodwill and just give away. I'm a senior trying to supplement my income. thanks to the craigslist garage sale clothes, I've done that, but now. I have shut down my eBay personal shop. It's just not worth it. So, I stick to the 600.00 rule and drop the rest off at the goodwill or put it in donations at my church. I was having fun with this, but then Joe Biden came along and wanted tax on a used tee shirt.
@mattk8810
2 жыл бұрын
Yeah but where do we enter the cost?
@mayac2266
7 ай бұрын
My CPA said the inventory cost I can itemize is only year to year. If I buy something 3 years ago I can’t use that to itemize for current tax year if I make sales on it. I guess she is wrong?
@notyourdadscpa
7 ай бұрын
You might find some differences of opinion, but in my view if you are contributing an old personal item to your business that is a contribution to the business that has the cost associated with it and can be deducted for that year either when you contribute it or when you sell it depending on what inventory method you're using.
@antilogism
3 ай бұрын
Many major corporations have some inventory that's 3, 5, 10 or even 20 years old in some cases for service spares. They use the original cost for both profit and loss if it's scrapped.
@sneakernerd8458
2 жыл бұрын
Let’s say I sold 10k worth of stuff on eBay and transferred the funds to my PayPal everytime I withdrawl money does that mean I have to pay 10k tax worth for eBay and 10k worth of PayPal?! Or does it know I’m just withdrawling the funds thru PayPal, rather then making a sale on paypal? Im so confused.
@jeremiahjordan4422
2 жыл бұрын
I only sell personal items (basically an online garage sale), but I sold a lot of them this year (over 20k). Do I file as a business? Can I deduct my costs (shipping, Ebay Fees, original item cost), if I file as a hobby so that I don't have to pay self employment taxes, and other business related taxes.
@GracieDontPlayDat
Жыл бұрын
This is how disgusting our larking Congress and fiat administrative state are right now; people are scared into thinking that taking a loss on the sale of personal items is a taxable business. NO! They only care if you made money off of your items because they appreciated, and then many of us are too poor for capital gains to apply in a big way anyway. They rule by fear, and lark us to wake us up from spending our lives record keeping for them.
@LaDolceVita-e5w
8 ай бұрын
Sometimes I order a liquidation pallet and several items are damaged, and I dispose of them. How can I deduct this from COGS using your inventory management spreadsheet?
@Kimberly-wt1nu
2 жыл бұрын
4:25 I had heard before that you can’t deduct a loss from a personal items?
@jimh3595
7 ай бұрын
If I buy a box of brand-new football cards for $100 (50 cards per box) and sell 10 of those cards for $5 a piece, do I calculate the COG as 100/50 * 10 = $20?
@WillowNook
2 жыл бұрын
My mom died and many items I have to sell were hers that I do not want to keep. How do I figure it out then I wonder?
@dfreak01
2 жыл бұрын
Can you just zero out everything? Make the COG the sale price?
@mrslehman3
2 жыл бұрын
Great video. Tuty
@norafraser1238
2 жыл бұрын
What if my items comes from family and friends and I have no cost of goods. What do you do then?
@toddk7332
2 жыл бұрын
"Create your own record"
@charlesschmitt2989
2 жыл бұрын
How do you account for items that are given to you by other people?
@TSunshineful
8 ай бұрын
Question: I rented a storage unit, just to store my inventory, can I deduct it on a schedule C
@Mrhilljack
2 жыл бұрын
Thanks for the video yours is the best one yet and closest to the answer I need . What If I have several junk vehicles around that I've had for 10 to 20 years and I sell parts off those on ebay, I consider them my personal stash because I'm just a hoarder and I try to keep plenty of difficult to aquire spare parts for my own projects because it's cheaper than buying even used replacement parts that I might need later in a time of need . How do I come up with a figure that an item off an old car I bought for parts a long time ago cost me? Or could I just look up what the part is bringing on ebay under sold items and establish a fair middle of the road value that way? I mean if I've had it for years and sell it, I sure don't want to pay tax on 100% of the money left over after final value fees and shipping etc . That's being said I usually do remember exactly what I paid for every old junker here. But most have no title and no receipt as it was a cash transaction usually and I just hauled it out of their yard. Keep in mind I'm not the average hoarder. I've got 15 acres of junk cars and equipment, some I've driven or used at times, some I bought a long time ago just for spare parts. So I might have a close to a hundred small 50.00 to 200.00 items the size of a alternator that I sell during the coarse of a year that have been here over half my life. My Dad was a lot like me in this regard.. and I just have a lot of stuff period
@bam5235
2 жыл бұрын
awsome vids, keep upi the good work...can you do one explaining cryptos gain?
@garylayton5719
2 жыл бұрын
Thanks for the great explanation. This has helped me out a lot. I did have a few more questions, though. I have a store on a (music gear site) that I sell my personal musical gear. I purchased all the gear new at retail, but eventually sell it as slightly used for a loss. I received a 1099-K for the income I received for selling this gear. I am trying to figure out the best way to offset this income. Do I write it off as "supplies/office expenses" on my schedule C? Inventory? Also, since it is a new store, will a 'BOY' inventory that isn't "0" be a big red flag since it doesn't match the prior year? Any help would be appreciated. Thanks so much for your video!
@EgaTehPro
2 жыл бұрын
Hey Mark. Love your videos and all the information you share. You ae a great speaker, everything you say comes across with ease. I do have a question though. When deducting, is the cost of goods pre-sales tax or post-sales tax?
@KenVanTassell
2 жыл бұрын
How do you account for personal items if you are doing cash accounting (cash in cash out)? Thanks!
@lauriepuleri5409
Жыл бұрын
If I'm consigning items for people are my COG what I have to pay them in the end? 50% of the net profit? I get so confused with taxes and whether to deduct this from my clients as well? Please help . Thank you!
@heatherh210
2 жыл бұрын
So confused. According the the IRS, you cannot deduct losses for personal items. Even to offset gains… I just asked my cpa this and she said you can’t deduct them. Then I checked the irs website and they said you can’t deduct them. Where does it say you CAN deduct the losses in the sale of personal items?
@notyourdadscpa
2 жыл бұрын
At the moment you contribute it to your business it's no longer a personal item. It's similar to how you cannot deduct a personal expense for office supplies. But if you contribute cash to your business and then purchase office supplies for the business, it's deductible.
@heatherh210
2 жыл бұрын
@@notyourdadscpa but if you gift it to your business, your cash basis for the item would be $0 so anything you sell it for would still be a gain, right? I appreciate your insights!
@notyourdadscpa
2 жыл бұрын
It's an equity contribution in the form of inventory. Your personal cost basis in the item will transfer to the business. So if your cost basis is $100 and you transfer that item to the business, your business now has a hundred additional dollars of equity in it, and that will be the deduction when you sell it.
@heatherh210
2 жыл бұрын
@@notyourdadscpa okay got it. That makes sense as an “equity in” contribution. I only ever have a few of these items a year since I seldom pay retail for anything but was curious since your advice conflicted with my CPAs (though I didn’t mention transferring it to the business) seems like a fair workaround to the lack of deductions of losses on personal property rule.
@louisnew2169
2 жыл бұрын
Great videos am new to reselling do you help out with making a spread sheet for keeping track of in an outs
@jacksonn3882
2 жыл бұрын
If I sell only personal items, how do a report the 1099k I'm going to get at the end of the year? Where and on what form? I'm not a business so I'm trying to avoid Schedule C. One KZitemr suggests form 8949 but I see no reference to 1099K in the instructions. I DON'T WANT TO START A BUSINESS. I just want to pay a fair tax on the gain "and go away" so to speak. PLEASE HELP!
@carleynash6964
2 жыл бұрын
Thanks so much for this video! Also, should I have a seperate bank account if I'm only selling my own items?? Thanks Again.
@pxbrixey4319
2 жыл бұрын
Avoid mixing your sales etc. with your personal finances. Open a separate bank account.
@carleynash6964
2 жыл бұрын
@@pxbrixey4319 Just to verify?? Even if just selling your own personal items?
@pxbrixey4319
2 жыл бұрын
@@carleynash6964 Yes, you need to keep them separate.
@chattyjessi
Жыл бұрын
Can we deduct personal items costs when they sell if we have decided to start the new year and use the cash method for inventory?
@shariwilliams2705
2 жыл бұрын
So this will be my first year filing taxes for my ebay sales. Will my fiiing trigger a look back by the IRS? I sell my personal items from 50 years of pack rat behavior. I am petrified. I just retired last year and was hoping this would supplement my SS, but now I feel like just donating it all!
@notyourdadscpa
2 жыл бұрын
And just the fact that it's the first year you're showing business activity on your tax return will not by itself trigger additional scrutiny of prior tax returns. No need to worry!
@martinahamn5214
Жыл бұрын
Hi a love your videos, this year my daughter was laid off she had been collecting anime figures for almost 15 years, then she got pregnant also and she sold about $8k worth of figures most she sold at a loss to try to pay her bills, how does she handle her taxes with the new EBay 1099K requirements?? Would that be as a Hobby? She doesn't run a business? Thanks so very much for any advise on this, sincerely.
@mslashay35
2 жыл бұрын
I need CPA SERVICES Asap. How do I go about choosing a CPA? Do you offer services?
@yeamypleasants1718
2 жыл бұрын
I need some help
@pennylane36
2 жыл бұрын
I feel like I’m way in over my head and things seem way more complicated than they should be If I go to goodwill and purchase 20 items but only 5 of those items sell during the year but my receipt has all 20 items listed, how do you use the receipt to show a business expense if only 5 items qualify? The other items could take years to see, how do receipts help if they are 4 years old? So confused
@jcman240
2 жыл бұрын
Calculate your inventory at beginning and end of year, then beginning inventory + purchases - ending inventory = COGS....you could also just list it all in the year purchased under supplies
@iloooveyou222
2 жыл бұрын
So what if you bought something in 2021 but it hasn’t sold yet, would you deduct the cost of goods this year or only when it sells? I’m just confused on how to keep track of it all
@lunardj2146
2 жыл бұрын
Hi There NYDCPA. Great video. I signed up for the course and am looking forward to it if I get an invite. Question for you about what to do with the 25% getting set aside now for taxes. Can I invest it in stocks during the year and then pull out the 'taxes due' to pay the IRS or will I get hit with more taxes on the stock profits?
@notyourdadscpa
2 жыл бұрын
It all depends on the tax you'll owe and if you are required to make estimated payments throughout the year. Keeping that in mind, you could park it in stocks, and yes if you sold the stocks at a profit, that would trigger some tax too.
@lunardj2146
2 жыл бұрын
@@notyourdadscpa Thank You for the response. I'll find a local CPA here in Dallas and see what I need to do to stay in the good graces of the IRS.
@William47345
2 жыл бұрын
How do I do my taxes if I only calculated my bought and sold. so say per month I add all my expenses. inventory. packing stuff etc as one cost each month., then I take my total I made each month (after fees) and put that in another column them I subtract them for my total profit of the month. Is this way not okay to do?
@pxbrixey4319
2 жыл бұрын
That I how I used to do it. It should still apply today, perhaps someone would correct me if I am wrong. Basically, I did it that way for two decades, the IRS never had a problem with it.
@ldebeck1032
Жыл бұрын
@notyourdadscpa Thank you so much for this video, Mark! I have a couple of questions: If you have a reselling business and also have personal items you are selling- if you sell those personal items in the same place as the rest of your reselling business, does that act alone convert them from personal into business inventory? Can you pick and choose which personal items you convert into business inventory? Let's say that gaming console in your example originally sold for $450 and you sell it for $250. If you convert it into the business and the market value at that time is $100 you have $150 profit exposed to taxation (before deductions) But, if you leave it as a personal item you sold without entering it into your business inventory, your original cost of $450 stands and you have a loss but, not one that can be taken anywhere through the tax process. If you don't care and just want whatever you get from it, can you do it that way? And, if you can do it that way, the total amounts throughout the year of your personal items will show on the 1099 you receive- how do you explain the difference to the IRS with your taxes? Or, are you expected to explain it?
@notyourdadscpa
Жыл бұрын
I don't know if there's a definitive answer on this about what officially constitutes an item being business inventory. If you are selling it on your business platform and the funds are going to your business bank account then that all would lean toward it being a business item in my opinion. But on the other hand if you document it as a personal item then I wouldn't be afraid to go that route if you don't want it to be lumped in with your business stuff. The IRS finally has acknowledged the problem with 1099ks and personal items and addresses it here. Not a simple solution but they do give instructions on how to report it. www.irs.gov/newsroom/form-1099-k-frequently-asked-questions-general
@ldebeck1032
Жыл бұрын
@@notyourdadscpa Thank you!
@KatIndiana3087
Жыл бұрын
One problem with the selling personal items, do you have the receipt for buying the shirt however many years ago? Is the IRS going to ask for receipts? I sold collectors plates from the 1980s/1990s. I actually have a couple receipts showing that they were purchased for around $32 each, but now they sell for about $5-10 each. Do I go by the original purchase price or today's market value? I actually came here because turbotax is asking me to do a starting inventory and ending inventory, and I don't do inventory. The spreadsheet I set up, thinking I was doing it right, was , and I have random stuff I keep, give away, trade, pull out of a closet, junk stuff that didn't sell etc. There's no way I could say what inventory I had Jan 1 last year compared to Dec 31
@CBev-j3n
7 ай бұрын
Just list zero for starting and zero for ending inventory. Then list amount for COGS.
@davidjohnson3541
2 жыл бұрын
How do I account for garage sale purchase
@toddk7332
2 жыл бұрын
What he said "create your own record"
@mattk8810
2 жыл бұрын
How do you balance the other side of the transaction though? Sell it to yourself?
@lmitchell4412
3 ай бұрын
You could treat it as a capital investment, except in the form of inventory instead of cash.
@youwishiwood
2 жыл бұрын
I do woodworking and I had to purchase a truck to transport materials. Can I deduct the purchase or only a percentage. I'm in Ohio if that matters
@pxbrixey4319
2 жыл бұрын
You should be able to depreciate your truck. Your CPA can advise you.
@moonatics
Жыл бұрын
Mark, I'm using your spreadsheet for DIY bookkeeping my new resale business. Q: When adding a personal item I bought several years ago to my Inventory Detail Sheet, what should I put as the item's "date of purchase" in Column D? I ask because if I use the actual purchase date from the old receipt, my very first year of business shows a beginning inventory number on the Inventory Summary sheet . Shouldn't the Beginning Inventory amount be a 0 for my first year of the business? Hope that makes sense. Thanks!
@notyourdadscpa
Жыл бұрын
Yes beginning should be zero, so you'll add those items as purchases on the date when you brought them in for business use 👍🏻
@moonatics
Жыл бұрын
@@notyourdadscpa thanks so much!! :)
@philipnorman9364
2 жыл бұрын
Great videos! I have an unusual question? I have a friend who buys storage units and donates thousands of dollars of low value items to goodwill. Then gets a receipt and uses those donations as tax right offs to lower his tax burden on his reselling business at the end of the year. I’m curious if this is a legitimate thing to do and also specifically how much those types of deductions would reduce your taxable income. For example if he donates $30,000 in goods in a year how much would that reduce his taxable income? Thanks in advance!
@notyourdadscpa
2 жыл бұрын
Donated business inventory would typically just be deducted as part of cost of goods sold, it's just as if you had sold those items for $0.
@philipnorman9364
2 жыл бұрын
@@notyourdadscpa thank you! Very interesting! what if you don’t categorize those items as business inventory. for example what if you keep $100 of items from the storage unit for personal use then donate them later would you be able to write them off as a charitable donation?
@RichD746
2 жыл бұрын
I don't understand any of this to be honest. Is the government really going to check through thousands of transactions for each person? Are they really going to question a $14 shirt and ask for a reciept? I know nothing about taxes other than I am about to be seriously screwed.
@notyourdadscpa
2 жыл бұрын
No they will not :) Not usually.
@Pokerpicker1
2 жыл бұрын
Great video. Makes me feel less than I’m going to Jail now.
@jjgems6732
Жыл бұрын
The cpa i used told me I could only deduct items i bought within the tax year that I sold them- she also seemed unfamiliar with Ebay resale practices - she never even asked me about losses- i paid ALOT of taxes as a first year seller
@jonm4802
2 жыл бұрын
This may be a strange situation but what if I am using comp dollars earned from gambling to buy items in their stores to resell. For instance I have a receipt for $325 for a recent item I got but I sold it for $269. Is that a loss I can write off since I have the receipt? Also don't I have to add these items into my inventory because we have to use the accrual method now?
@jcman240
2 жыл бұрын
You can take the loss... accrual accounting is mostly for bigger companies
@TheDudeVT
2 жыл бұрын
Might be a stupid question but how do you handle reselling free items or gifts that you never opened or used? I'm assuming that if the item was free them its 100% profit and I have to claim that sold number.
@notyourdadscpa
2 жыл бұрын
I believe that's the way to do it!
@JJ-ri7eq
2 жыл бұрын
Hi Mark! I sold items on 12/27/2021 on mercari, but got paid for them until 01/01/2022, does that count towards the new 2022 1099k or for 2021? Enjoy your videos! Have answered all my questions Happy new year!
@dogsarefun2
2 жыл бұрын
date you paid is the year it counts..... 2022 for your - if over 600 - u get a 1099
@currytigre
2 жыл бұрын
So I always get a little confused when I hear an answer prefaced with being related to a reselling business. I don't have a full time or part time reselling business but I did sell a couple of low and high ticket personal items over the summer. Is the content in this video still applicable to me? I also always just with the standard deduction. Will claiming a loss on the items I sold mean I'll have to itemize instead of taking my standard deduction or are those separate?
@jfc723
2 жыл бұрын
Yea well bye bye ebay.
@JohnnyLightningV10
2 жыл бұрын
So you going spend 30 minutes to calculate cost for an item bought in 2003 for 15 dollars. Let me calculate my dollar on inflation since I purchased. Last time I checked no one is getting rich in this business.
@roadwarrier9446
2 жыл бұрын
Maybe some people collect old game consoles. LMAO
@bamcomicscardsandcollectibles
2 жыл бұрын
hi Great Video! I do have a question. My CPA told me if you cannot prove what you paid for an item, you cannot deduct ANYTHING in terms of Cost of goods sold. Your video obviously contradicts this opinion. Any further guidance/opinion on this? For context, I sell many comic books and sports cards that I bought 20 - 30 years ago and I have no idea what I paid for them. I had been taking your advice initially by just using a really low value in terms of cost of goods sold, but after hearing the guidance from my CPA I haven't deducted anything unless I can prove what I paid. thank you and keep the great content coming! bruce
@notyourdadscpa
2 жыл бұрын
If you can't prove it, the IRS could disallow it, but I wouldn't go so far as to say you can't deduct it. I think it just comes down to how conservative or aggressive you want to be. In my view, if you incurred a business expense then it should be deducted on your tax return, even if you lost the receipt.
@regalseagullGA
2 жыл бұрын
Thank you! So helpful!
@flyingwithbrian3287
2 жыл бұрын
Great explanation! What would be an easy cost effective (Free) accounting app or software to start with to show all fees, shipping, loss, profit, etc. ?
@behappylikeiam9421
2 жыл бұрын
Exactly! Ebay is huge company and why it is so hard for them make their own program.
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