This is such a common situation and you're smart to ask before selling! One thing I didn't see mentioned yet is that if you're selling personal-use property (like art you inherited for your home rather than as an investment), any losses generally aren't deductible. But gains are still taxable, so it's kind of a "heads they win, tails you lose" situation with the IRS. Also, since you mentioned these are from your grandfather who passed last year, make sure you have the estate paperwork handy. Sometimes the executor or personal representative had the items appraised as part of settling the estate, and those appraisals can serve as your stepped-up basis documentation. It's worth checking with whoever handled the estate to see if any formal valuations were done. If you do end up needing to establish values and don't want to pay for formal appraisals on lower-value pieces, try looking up recent "sold" listings (not just asking prices) on eBay, auction sites, or art databases for similar works. The IRS accepts reasonable market research as support for your basis, especially for items under a few thousand dollars.

I've been through a similar situation with inherited artwork, and there are a few practical details that might help beyond what's already been covered. One thing I learned the hard way is to take high-quality photos of each piece before you sell them - not just for listing purposes, but for your tax records. If the IRS ever questions your basis or the condition of the items at time of inheritance, having detailed photos can be incredibly valuable documentation. Also, since you mentioned you're selling to cover expenses, consider whether you actually need to sell all the pieces at once. If the total gains push you into a higher tax bracket or trigger additional taxes (like the Net Investment Income Tax), it might be worth spreading sales across 2024 and 2025 to manage your overall tax impact. One last tip - if any of your pieces turn out to be more valuable than you initially thought when you start getting offers, don't be afraid to pause and get a proper appraisal. I almost sold a piece for $2,000 that turned out to be worth $8,000 after I had it properly evaluated. The appraisal cost was definitely worth it in that case!

I think everyone is overcomplicating this. If you're just selling a few items each month for a total of under $100 profit, the IRS honestly has bigger fish to fry. Millions of people have garage sales or sell used items without reporting every penny. As long as you're not making thousands or consistently growing this into a business, I wouldn't stress about it.

I appreciate everyone's detailed responses here! As someone who's been through this exact situation, I want to emphasize that even small amounts of income should be reported - it's not worth the risk of penalties later. The key distinction between hobby vs. business that Aliyah mentioned is crucial. Since you're actively buying items with the intent to resell for profit and doing this consistently each month, you're likely operating as a small business even without formal licensing. The IRS looks at your intent and activities, not just the dollar amounts. My recommendation would be to start treating this as a business now: keep detailed records of what you buy, sell, and any expenses (gas for thrift store trips, packaging materials, etc.). File Schedule C and take advantage of legitimate business deductions. Even at your current scale, proper record-keeping will save you headaches and potentially money on your taxes. Also, be aware that if you're selling through any online platforms, you might hit that $600 1099-K threshold sooner than you think when you factor in shipping costs that buyers pay you. Better to be prepared and compliant from the start!

Great question about EPD! You're actually thinking about this correctly - the $65 in distributions you received likely aren't immediately taxable because they're classified as a return of capital that reduces your tax basis in the partnership. Here's what's happening: EPD typically generates significant depreciation and depletion deductions that flow through to partners, which is why your K-1 shows negative income. The distributions exceed your allocated share of taxable income, so the excess reduces your basis rather than creating a current tax liability. The key things to track going forward: 1. Your original purchase price (basis) 2. Each year's distributions (these reduce basis) 3. Any income/loss allocations from the K-1 4. Your adjusted basis = original basis - cumulative distributions + cumulative income allocations You'll need this information when you eventually sell to calculate your capital gain/loss. Also keep in mind that any suspended passive losses from the partnership can typically be used to offset gains when you dispose of your entire interest in EPD. So yes, you're being appropriately optimistic - no immediate tax liability for 2023 from your EPD investment!

As someone who's dealt with EPD and other MLPs for several years, I wanted to add a few practical tips that might help you going forward: First, EPD typically sends out their K-1s quite late in tax season (often March), so plan accordingly if you're eager to file early. Second, consider setting up a simple tracking system now - I use a basic Excel sheet with tabs for each MLP I own, tracking original basis, annual distributions, and K-1 income/losses. One thing that caught me off guard initially was that even though you're not paying tax on the distributions now, you'll want to consider the tax implications when you do eventually sell. Since your basis keeps getting reduced by the distributions, you might end up with a larger capital gain than you initially expect. Also, if you're planning to buy more EPD shares, be aware that additional purchases will have their own basis tracking requirements. Each lot purchased will have its own cost basis that gets reduced by the proportional share of distributions. The good news is that EPD has been pretty consistent with their distribution policy, so the tax treatment should remain fairly predictable year over year. Just keep good records and you'll be fine!

Don't forget to check if you qualify for any tax treaty benefits! The high-tax kickout rules still apply, but sometimes tax treaties between the US and the foreign country have special provisions about how certain types of income are categorized or credited. For example, I have income from Canada and the US-Canada tax treaty has specific rules about pensions and social security that affected how I filled out my Form 1116. Might be worth looking into depending on which country your foreign income is coming from.

Just wanted to share my experience after dealing with a similar high-tax kickout situation last year. The key thing that helped me was creating a simple spreadsheet to track each source of foreign income separately before even touching Form 1116. I listed each type of income (interest, dividends, capital gains, etc.), the country it came from, the foreign tax paid, and calculated the effective foreign tax rate for each. This made it crystal clear which items needed to be "kicked out" to general category vs staying in passive. One thing I learned the hard way - make sure you're calculating the effective rate correctly. Don't just look at the statutory tax rate of the foreign country. You need to divide the actual foreign tax YOU paid by the actual foreign income YOU received. Sometimes withholding taxes, tax credits in the foreign country, or other adjustments can make your effective rate different from what you'd expect. Also, keep really good records of your calculations because if the IRS questions your categorization later, you'll want to be able to show exactly how you determined which income belonged in which category.

One thing to watch out for that I learned the hard way: if your child's interest income is above $1,150 (for 2023 tax year), it might be subject to the "kiddie tax" which applies your tax rate to their unearned income above that threshold. In my case, my daughter had a larger CD that matured last year with about $2,000 in interest, and I ended up having to pay tax at my higher rate on the amount over the threshold. Just something to keep in mind if your children's CDs are larger!

Just a quick tip from a former bank employee: make sure the SSNs on the 1099-INT forms match your children's Social Security cards exactly. Sometimes banks make errors, especially with children's accounts that might have been set up as custodial accounts. I've seen cases where the parent's SSN accidentally got associated with the child's account, which creates a real headache when tax forms are generated. Might be worth double-checking before you file!