Occasional Ebay seller - which income tax form should I use?

Question

I only sell on Ebay occasionally, clearing out old stuff from the house. But a few things I sold turned out to be in demand, so I ended up making about $600. Which tax form should I use to report this? The Schedule C business form says only to use that form for business done on a regular basis, not to use that form for reporting hobby income, but to use the 'line 21 for other expenses' to report it instead. But the explanations for line 21 don't fit either. Do I need to attach a form? The IRS web site mentions ebay earnings as business expenses or capital gains...but the capital gains form doesn't look like it applies to ebay sales at all.

I just can't understand all this IRS mumbo-jumbo - can someone please help me? I can't afford to hire a CPA, but I don't want to get into trouble for not reporting income

Answer 1

You will put it straight on the 1040. If you use the 1040 long form it will be put on line 21 under Other income and write Hobby income since you are not engaged in a business to make a profit. Remember you are allowed to deduct expenses for selling the stuff on eBay, but you cannot claim a loss for hobby income.

Read Tax topic 426 for more on hobby income.

Answer 2

Schedule C or C-EZ if you actually made a profit. But if you are selling stuff that you lost money on, i.e. a lamp you paid $100 and sold for $15 on ebay, then you don't need to report it.

Capital gains would only apply for something like a classic car that appreciated in value over years, and was then sold on ebay.

Answer 3

It is only "income" if you sold the items for more than you paid for them.

If you are just clearing out your house and selling things for less than you originally paid, you do not need to report it.