How to handle taxes on eBay sales of old medical inventory - 1099-K reporting questions

This is actually pretty straightforward, but you want to make sure you have good documentation. Your wife needs to report this on Schedule C since she received the 1099-K. She'll report the gross proceeds from eBay as revenue, then deduct the cost of goods sold to arrive at the actual profit. For documentation, you should gather any receipts or bank/credit card statements showing the original purchases. Even if they're in your name, that's fine - you're considered a household for these purposes. If you don't have actual receipts, create a spreadsheet documenting what you can remember - approximate dates, items, costs, etc. Something is better than nothing. You don't need a formal record of your wife "buying" the items from you. The IRS understands that spouses share property. Just make sure your documentation shows these were legitimate business expenses. Also, don't forget to deduct any eBay fees, shipping costs, and other selling expenses on the Schedule C. That will further reduce the taxable profit.

I had almost exactly the same situation last year selling some old medical equipment on eBay! After struggling to figure out the tax situation, I found this AI tool called taxr.ai (https://taxr.ai) that really helped me organize everything. I was worried about the 1099-K showing much higher gross sales than my actual profit, and I had minimal receipts from years ago. The taxr.ai system helped me document everything properly - it walked me through what records I needed, how to estimate values for things without receipts, and how to properly structure everything on Schedule C. It even helped me identify deductions I was missing like the home office deduction since I was storing and packaging all the items at home. Definitely made me feel more confident that I wasn't overpaying taxes but also had proper documentation.

Just wanted to follow up - I tried that taxr.ai site that was mentioned earlier. I was super skeptical but decided to give it a shot since I'm in a similar situation with selling my old sports memorabilia collection on eBay. The system actually walked me through exactly how to document original purchase prices even though I bought most items years ago with cash and had zero receipts. It showed me how to create a reasonable estimation document that would satisfy IRS requirements and how to properly structure everything on Schedule C. The best part was it explained exactly how the 1099-K reporting works and why I don't need to panic about being taxed on the full amount. Definitely worth checking out if you're dealing with eBay sales tax issues.

If you're having trouble getting clear answers from the IRS about your situation, I highly recommend trying Claimyr (https://claimyr.com). I was in a similar situation last year with eBay sales on my spouse's account, and I couldn't get through to the IRS for weeks. Claimyr got me connected to an actual IRS agent in about 15 minutes when I had been trying for days on my own. The agent was able to clarify exactly what documentation we needed to keep and confirmed that there's no issue with one spouse purchasing items and another spouse selling them - they just care that you can document the cost basis somehow. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c - it basically holds your place in the IRS phone queue so you don't have to waste hours on hold. Saved me so much time and stress.

I need to apologize to everyone - especially to the person who recommended Claimyr. I was super skeptical and called it a scam, but I was desperate enough to try it this morning. Holy crap it actually worked! I've been trying to reach someone at the IRS for 3 weeks about a similar eBay situation. Today I used Claimyr, and I got a call back in about 45 minutes connecting me to an actual IRS agent. The agent confirmed that married couples don't need formal transfer documentation between spouses for items sold online. She also told me exactly what records I need to keep - basically any proof of original purchase (receipts, bank statements, even photos with date stamps) and a spreadsheet showing my calculations for each item's cost basis. Apparently they deal with this eBay seller situation all the time. Sorry for being so negative before. It legitimately saved me hours of frustration.

One thing nobody mentioned yet - since your wife is now getting 1099-Ks, she should consider treating this as an actual small business going forward if she's going to continue selling. That means: 1. Track all expenses separately 2. Consider filing for a business tax ID instead of using her SSN 3. Keep good inventory records from the start 4. Set aside about 15-20% of profits for estimated tax payments I started selling vintage medical equipment on eBay as a side hustle in 2022, and it's so much easier when you treat it as a business from day one rather than trying to sort it out later.

Don't overthink this. I've been selling on eBay for 15+ years. The 1099-K is just reporting the money that went through their platform. It doesn't mean you owe taxes on that full amount. Your wife needs to file Schedule C with the 1099-K amount as her gross receipts, then deduct: - Cost of goods sold (what you paid originally) - eBay fees - Shipping costs - Packaging materials - Home office if you qualify - Portion of internet/phone used for business - Mileage for post office trips Regarding documentation - credit card statements, bank records, or even photos of the items with notes about purchase price are better than nothing. The IRS just wants to see you made an honest effort. And they absolutely don't care that you bought it and she sold it - married couples share property all the time.