I've been doing online reselling for 5 years, around $35k/year, and have always used cash method with no issues. Just track your inventory purchases separately and only count them as expenses when they sell. Use a simple inventory spreadsheet. For tax purposes, the cash method is SO much easier when it comes to filing Schedule C. Most tax software is set up assuming small businesses use cash accounting anyway.

For your situation with $20k annual sales, I'd definitely recommend sticking with cash accounting - it's much simpler for small resellers and you're well under the $27M threshold that would require accrual method. The key thing to understand is that even with cash accounting, you'll need to handle inventory costs differently. When you buy items to resell, you can't deduct those costs immediately like other business expenses. Instead, you track them as inventory and only deduct the cost when each item actually sells (this is called "cost of goods sold"). So if you buy a vintage jacket for $15 in March but don't sell it until August, that $15 gets deducted in August when you make the sale, not in March when you bought it. Your other expenses like eBay fees, shipping supplies, gas for thrift store trips, etc. can be deducted when you pay them under cash method. Keep a simple inventory log with purchase date, item description, cost, and sale date/price. This will make tax time much easier and ensure you're handling the inventory rules correctly while still benefiting from the simplicity of cash accounting for everything else.

Y'all are overthinking this. Buy land in Alaska through their remote recreational cabin program. No property taxes on these parcels, and they're relatively affordable. Plus beautiful wilderness all around you!

I've been researching similar options and wanted to add a few considerations that might help. One approach I've found is looking into conservation easements - if you donate development rights on your land to a qualified organization, you can often get significant property tax reductions (sometimes 50-80% depending on the state) while still maintaining ownership and the right to live there. Another option worth exploring is homesteading exemptions, which many states offer but don't widely advertise. Texas, for example, has a homestead exemption that can reduce your taxable property value by up to $25,000 for school taxes, and some counties offer additional exemptions for veterans, seniors, or disabled individuals. Also, regarding the Alaska suggestion - while those remote parcels sound appealing, make sure you understand the access requirements. Many of these properties are only accessible by plane or boat, which can make year-round living extremely expensive and potentially dangerous during emergencies. The "no property tax" benefit might be offset by the costs of maintaining access and emergency preparedness. One more thought: if you're willing to consider a mobile lifestyle, some states like South Dakota, Texas, and Florida are popular with full-time RVers because they offer legal residency without requiring you to own property, and you can establish domicile there while traveling. This eliminates property tax entirely while maintaining US residency.

I'm having exact same problem!!! Last month I sold my grandmother's old china set for $700 that was probably worth thousands when new but I don't have a receipt from the 1970s lol. Also sold some designer clothes I impulse bought and never wore but took a big loss on them. How do u even figure the cost basis on inherited items like that china? Its so confusing and I'm scared PayPal will send a 1099K even though I'm nowhere near the threshold and then the IRS will think I'm running a business or something which I'm definitely not!!!

@Jordan Walker, I completely understand your stress about this! I went through something very similar last year and want to share what I learned that might help ease your worries. First, the good news: you're thinking about this correctly. The IRS distinguishes between personal items sold at a loss versus actual business income, and you won't owe taxes on selling your personal belongings for less than you paid. Here's what I did when I was in your exact situation: 1. Created a simple spreadsheet with columns for: Item Description, Approximate Purchase Date, Estimated Original Cost, Sale Price, and Notes 2. For items without receipts, I researched similar items online to estimate what I originally paid 3. Added notes like "personal designer bag purchased approximately 2019, selling due to financial need" The key insight that helped me: the IRS isn't trying to trap people selling personal items at yard sale prices. They're looking for patterns that suggest unreported business activity. Your situation - selling varied personal items at obvious losses - is clearly not a business. Regarding the thresholds, yes it's confusing! PayPal has been more aggressive with 1099-K reporting, but remember: receiving the form doesn't create a tax obligation. You'll just need to show these were non-taxable personal sales when you file. Don't let this keep you from selling items you need to sell! Just document what you can reasonably document, and you'll be fine.

Has anyone mentioned that the stepped-up basis rules changed for some trusts with the 2017 tax law? I thought there were some modifications that took effect for deaths after 2018 that might impact this situation.

I went through a very similar situation with my parents' irrevocable trust last year. The key thing that helped me was getting a qualified appraisal of the property as of both death dates - your father's death in 2003 and your mother's death in 2025. Since you're in Pennsylvania (not a community property state), the general rule is that each spouse's 50% interest gets a step-up when they die. So half the basis stepped up to $160,000 (50% of $320,000) when your father died in 2003, and the other half should step up to $355,000 (50% of $710,000) when your mother died in 2025. However, there are exceptions depending on how the trust was structured. Some irrevocable trusts include provisions that can result in different treatment. The exact language in your trust document is crucial here. I'd strongly recommend getting a second opinion from a CPA who specializes in estate and trust taxation, not just general tax prep. The difference between the attorney's interpretation and a full step-up could be tens of thousands of dollars in capital gains taxes, so it's worth the cost of professional review. Also, make sure you have proper documentation of the property values at both death dates for your tax filings. The IRS will want to see professional appraisals, especially for a property that's appreciated this much over time.

Your all good fam. That minus sign means payday is coming 🎉

I had the exact same confusion when I first looked at my transcript! The IRS uses accounting terminology where credits (money you get) show as negative and debits (money you owe) show as positive. It's counterintuitive but once you know the system it makes sense. Your -$4,322 is definitely your refund amount - congrats on getting money back! 🙌