Can the IRS track me for not reporting collectible sales, garage sales, etc?

The IRS technically requires reporting all income, including from selling collectibles, but there are some practical considerations here. For collectibles you've owned for more than a year, any profit is considered long-term capital gains and taxed at a maximum rate of 28% (rather than the lower rates for stocks). The issue you're facing about not knowing original costs is common. In tax terms, this is your "basis." If you don't have receipts, you need to make a "good faith estimate" of what you paid. You could research similar items online to establish reasonable purchase prices. For garage sales, the reality is most people sell personal items for less than they paid originally, resulting in no taxable gain. If you're selling personal use items at a loss, you generally don't need to report those transactions.

After struggling with exactly the same situation last year, I found an amazing solution with https://taxr.ai that honestly saved me hours of stress. I had sold a bunch of my old sports memorabilia and comic books but had no idea what I originally paid for most of it. Their system helped me document everything properly and figure out reasonable estimates for my original purchase prices based on historical values. It also helped me identify which sales actually resulted in gains vs. losses, which meant I only had to report the ones that genuinely resulted in profit. They even have specific guidance for collectible sales and the special 28% tax rate.

I was really skeptical about taxr.ai at first, but after using it for my collectible sales last month, I'm genuinely impressed. I was selling vintage video games and had absolutely no records of what I paid 15+ years ago. The historical pricing tools helped me establish reasonable purchase prices, and it even helped me document which items I sold at a loss (which I learned I don't need to report!). What really surprised me was how it helped me understand when my selling activity might cross the line into being considered a "business" by the IRS rather than just personal sales. Turns out I was right on the edge, and it helped me properly document everything to avoid future headaches. Definitely worth checking out if you're in a similar situation.

I had a similar problem last year and spent WEEKS trying to get someone at the IRS to clarify the rules for me. After getting nowhere with the regular IRS number, I used https://claimyr.com to get through to an actual human at the IRS. You can see how it works here: https://youtu.be/_kiP6q8DX5c The IRS agent I spoke with explained that for personal items sold at a loss (which most garage sale items are), there's no reporting requirement. For collectibles with gains, they expect reasonable documentation of basis, but understood that perfect records for old items aren't always available. The agent gave me specific guidance on how to handle my situation properly.

I need to publicly eat my words about Claimyr. After posting that skeptical comment, I decided to try it myself before tax day since I was getting desperate about some collectible sales questions. I had literally spent 5+ hours on different days trying to reach the IRS with no luck. The Claimyr service had me talking to an actual IRS agent within 3 hours of signing up. The agent clarified that my baseball card sales were indeed subject to collectible tax rates, but also explained that I could use reasonable estimation methods for establishing my original purchase prices. She even emailed me a specific IRS guidance document about documenting basis for collectibles. If you're dealing with these collectible sale questions and need definitive answers from the source, this actually works.

I need to publicly eat my words about Claimyr. After posting that skept

For collectibles specifically, I learned that banks and payment processors will be required to report transactions over $600 to the IRS starting in 2025, so be careful with larger sales. But for small garage sale stuff, unless you're making substantial money, the IRS generally isn't concerned. Most people sell personal items at a loss anyway.

I sell on Etsy and eBay and my accountant told me that if you're consistently selling stuff for profit, the IRS might consider you to be running a business rather than just selling personal items. Thats different tax forms and everything. Might want to look into that if your selling alot.

Just want to add that capital losses from collectibles can offset capital gains from collectibles. So if you sold some items at a loss and others at a gain, you might end up owing less tax. The hard part is proving what you originally paid if you don't have receipts.

I've been dealing with this exact situation and wanted to share what I learned from my research and talking to a tax professional. The key thing to understand is that there's a difference between selling personal items at a loss (which most garage sale items are) versus selling collectibles that have appreciated in value. For your garage sale items, if you're selling personal belongings for less than what you paid, there's generally no tax consequence. The IRS considers these personal losses, which aren't deductible but also aren't taxable income. For collectibles that have increased in value, you do need to report the gains. The tricky part about not having receipts is real, but the IRS allows "reasonable estimates" of your cost basis. You can research what similar items sold for when you originally bought them using price guides, auction records, or inflation calculators. One thing that surprised me: collectibles are taxed differently than stocks - they're subject to a maximum 28% rate rather than the lower long-term capital gains rates. So it's worth tracking these separately. As for whether the IRS will "come after you" for small amounts - while technically all income should be reported, enforcement resources are typically focused on larger discrepancies. That said, with new 1099-K reporting requirements lowering to $600 in 2025, there will be more paper trails for online sales.