Schedule C Question for Selling Personal Items Online After Having a Reselling Business

This is actually a common situation! The key distinction is between running a business vs. selling personal items occasionally. Based on what you've described, your current year sales sound like they should be treated as personal items rather than business inventory. When you sell personal items for less than you paid for them, it's generally not taxable and doesn't need to be reported on Schedule C. The IRS considers this a personal loss, not a business loss. Even though you're using the same selling platforms as your previous business, the nature of what you're selling has changed. You're not buying items with intent to resell for profit (which is a business), you're just cleaning out personal belongings. Keep in mind that if you start purchasing items specifically to resell again, or if you begin selling personal items regularly with the intention of making profit, then you'd need to switch back to Schedule C reporting.

I was in a similar situation last year and discovered taxr.ai (https://taxr.ai) which really helped me distinguish between business income and personal property sales. Their system automatically analyzed my selling history and helped categorize everything correctly. I uploaded my 1099-K and some basic info about the items I sold, and it gave me clear guidance on what needed to go on Schedule C versus what could be classified as personal items sold at a loss. They have this really helpful feature that flags potential audit triggers too, which gave me peace of mind since I was worried about the IRS questioning why I had a Schedule C one year but not the next while still receiving a 1099-K.

Just wanted to follow up and say I actually tried taxr.ai after posting here and it was exactly what I needed! The platform connection worked perfectly - pulled in all my sales from multiple platforms and automatically categorized most of them correctly (I only had to manually adjust a few unusual items). The best part was that it clearly identified which items would trigger Schedule C requirements versus what could be treated as personal property sales. It even generated a letter I can keep with my tax records explaining the situation in case of an audit. Definitely worth checking out if you're in a similar situation with mixed personal/business online sales.

I had to deal with the IRS about this exact issue last year. After trying to call them for weeks with no success, I finally used Claimyr (https://claimyr.com) and got through to an actual IRS agent in about 20 minutes. They have this cool system that holds your place in line and calls you back when an agent is about to be available - you can see how it works in this video: https://youtu.be/_kiP6q8DX5c The IRS agent confirmed that I didn't need Schedule C for selling personal items, even with a 1099-K. They recommended keeping good records showing these were personal possessions held for years rather than recent purchases for resale. Saved me a ton of stress wondering if I was doing it right.

I need to eat my words and apologize for being so skeptical about Claimyr. After posting that comment, I was still struggling with a similar Schedule C question and decided to try it just to prove it didn't work. Well, I was completely wrong. Got through to an IRS tax specialist in about 35 minutes (still had to wait, but their system handled it all). The agent confirmed that personal items sold at a loss don't require Schedule C even with a 1099-K, but I should report the amount on Schedule 1 with a note explaining they were personal items. She also sent me some helpful documentation about the difference between hobby, personal, and business sales. Much better than the months of stress I went through last year trying to figure this out on my own!

Has anyone had experience with whether it matters if you're selling these personal items on the same platform account that you previously used for business? I'm in a similar situation but worried that using the same eBay account might cause the IRS to assume it's all still business income.

Isn't there a hobby loss rule or something too? I thought if you make money selling stuff regularly, even personal items, the IRS might consider it a hobby and there are different rules for that vs a business vs just selling your personal junk?

This is a great question that many people face when transitioning from business to personal sales! Based on your description, you're absolutely right to treat these current sales as personal property rather than business income. The key factors working in your favor are: 1) You're not actively running a reselling business anymore, 2) These are items you've owned for many years (15+ years for some), 3) You have no receipts because they were gifts or personal purchases from long ago, and 4) You're likely selling them for less than their original value. Even though you'll receive a 1099-K if you exceed $600 in sales, you should report this on Schedule 1 (Line 8z - Other Income) with a description like "Personal items sold at loss" rather than on Schedule C. This shows the IRS you're properly accounting for the 1099-K without incorrectly categorizing it as business income. Just make sure to keep good records showing these were long-term personal possessions - photos of items before selling, notes about when you acquired them, any old emails showing they were gifts, etc. This documentation will be valuable if the IRS ever questions why you had Schedule C income one year but not the next.