In the rare situation where you sold a personal use asset for more than what you bought it for, then you would report the sale on your tax return and you would report capital gain income for the amount you sold the asset above what you paid for the asset.
Despite all the publicity surrounding Internet commerce, one essential fact that is often overlooked is that there is no general tax exemption for sales of tangible personal property (merchandise) made over the Internet (Internet sales).
If you sell something created or acquired as a hobby online, the profit you earn is taxable income that is supposed to be reported on your tax return.
Whether or not you receive a Form 1099-K, you must still report any income on your tax return. This includes payments for any: Goods you sell, including personal items such as clothing or furniture. Services you provide.
If you're only reselling items as a hobby or very occasionally, you'll file a personal tax return and report your profit and loss on Schedule 1 (Form 1040) Additional Income and Adjustments to Income. To report capital gains, you'll need to file Form 8949 and Schedule D.
The new "$600 rule"
Under the new rules set forth by the IRS, if you got paid more than $600 for the transaction of goods and services through third-party payment platforms, you will receive a 1099-K for reporting the income.
You only need to report personal items that you sold if they were sold for more than what you originally paid. Let's say you purchased a vintage nut grinder for $5 in 1972 and recently sold it for $75 at a yard sale. In that case, you'd have to report the $70 profit as an investment sale.
The short answer is yes. In most cases, the IRS and your local tax agencies expect tax payments for gains received on private sales transactions.
Key Takeaways:
Gifts of up to $19,000 in cash are exempt from reporting in 2025. Those who have household employees must report cash payments that exceed $2,800 in 2025. All cash income should be reported on federal tax returns, regardless of whether a person receives a W-2 or 1099 Form from the entity that paid them.
Whether you sell items exclusively online or not, the IRS and most states consider any income you earn from these sales taxable.
As an independent contractor, you are self-employed and only pay tax on your net profit after deducting eligible business expenses. You must pay self-employment (Social Security and Medicare) taxes if your net profits are $400 or more.
Do You Have to File Taxes If You Made Less than $5,000? Typically, if a filer files less than $5,000 per year, they don't need to do any filing for the IRS. Your employment status can also be used to determine if you're making less than $5,000.
Profiting off the sale of a business asset is considered taxable income, and the IRS applies the capital gain taxes depending on how long you've owned the equipment.
Personal selling involves person-to-person communication, which requires interpersonal skills and expertise to persuade leads to buy products and services. There are many different types of personal selling, including retail sales, business-to-business sales, and telemarketing.
For example, if you bought a used car for $1,000 and later sold it for $5,000, you will need to pay taxes on the profit as capital gains during tax season. Depending on the value and your tax bracket, if you have owned the car for more than a year, the taxes may range from 0% to 20% or higher depending on the state.
Personal items sold at a gain
If you made a profit or gain on the sale of a personal item, your profit is taxable. The profit is the difference between the amount you received for selling the item and the amount you originally paid for the item.
If you're selling items for less than what you bought them for, you won't get to take money off your taxes. But, if you made money on your sale(s), you'll report it to the IRS on Form 8949 and Schedule D.
Your earned money from selling on Marketplace could be subject to taxes. Even if you don't claim the income when you file your annual taxes, we will submit a Form 1099 and report your income to the IRS.
If any item is sold for more than they paid for it, they would have a profit, which they would have to report as income on their tax return.
For example, money from odd jobs, baby-sitting, or a one-time “gift” if it is not more than $30 in three months [7 C.F.R. § 273.9(c)(2); MPP § 63-502.2(d)]; or severance pay (unless paid out in regular installments) or vacation pay at termination of job, which should be treated as a lump sum.
You may not have to pay tax at all if you are essentially hosting an online garage sale, but if you run your eBay account more like a business, you should be reporting your sales to the IRS.
Zelle® does not report any transactions made on the Zelle® network to the IRS, even if the total is more than $600. The law requiring certain payment networks to provide forms 1099K for information reporting does not apply to the Zelle® network.
The IRS has lowered this threshold for tax year 2024, meaning eBay and other marketplaces must report gross sales that equal or exceed $5,000 on a Form 1099-K beginning in tax year 2024. This is part of a phase-in process by the IRS to eventually implement a $600 threshold in 2025.
Payments you collect on the Cash App only count as income if you received them in exchange for goods or services. In contrast, personal payments between friends and family don't count, and you don't have to report them on your taxes.