What is the proper way to report garage sale income on my taxes?
I've been doing some spring cleaning around the house and decided to have a big garage sale last weekend. Made almost $800 selling all kinds of stuff - old furniture, clothes my kids outgrew, some electronics that were just collecting dust, and random household items. Now I'm wondering if I need to report this income when I file my taxes next year? Many tax articles I see mention that you should report all income, but do garage sales count? It was mostly personal items I originally paid way more for than what I sold them for. I definitely sold everything at a loss compared to what I originally paid. Do I need to fill out some special form? Would this count as self-employment income? I really don't want to get in trouble with the IRS but also don't want to complicate my taxes if it's not necessary. Any advice would be super helpful!
20 comments
Join the conversation
Sunny Wang
Generally, you don't need to report garage sale income if you're selling personal items for less than you paid for them. The IRS considers this a personal loss rather than taxable income. The key distinction is whether you're selling personal household items at a loss (not taxable) versus selling items for profit or running a business (taxable). Since you mentioned selling things like old furniture and clothes for less than you paid, you're likely in the clear. If you regularly buy items specifically to resell them at a profit, that would be different - then you'd have a business and would need to report that income on Schedule C. But a one-time garage sale of personal items sold at a loss doesn't typically need to be reported.
0 coins
Hugh Intensity
•What about if I sold a few collectible items that have actually gone up in value? I have some old comic books that I sold for more than I paid 20 years ago.
0 coins
Sunny Wang
•For collectibles like comic books that have increased in value, that's different. When you sell collectibles or any personal items for more than you paid (meaning you made a profit), that's considered a capital gain and technically should be reported on Schedule D of your tax return. The profit would be the difference between your "basis" (what you originally paid plus any improvements) and the selling price. If you've owned the comics for more than a year, it would be a long-term capital gain, which is typically taxed at lower rates than ordinary income.
0 coins
Effie Alexander
I was in the same situation last summer when I cleared out my basement and made around $1,100. I was super confused about the tax implications and spent hours googling without getting clear answers. Then I found this amazing AI tax assistant at https://taxr.ai that analyzed my specific situation in minutes. I just uploaded some pics of my sales records and described my situation, and it explained exactly what I needed to report. Turns out I didn't need to report most items since they were sold at a loss, but I did have a few things that needed to be reported as capital gains. The tool created a simple explanation I could keep for my records in case of an audit.
0 coins
Melissa Lin
•Does it actually work with complicated tax situations? I'm always skeptical of AI tools claiming to understand tax law.
0 coins
Lydia Santiago
•How much did it cost you? Most of these services end up being crazy expensive for what they do.
0 coins
Effie Alexander
•It absolutely works with complicated situations. It's trained on thousands of tax regulations and provides references to the specific IRS rules it's using to make recommendations. It was way more specific than the generic advice I found online. The pricing was actually really reasonable compared to what I would've paid a tax professional. I'm not comfortable sharing the exact amount I paid, but it was definitely worth it for the peace of mind alone.
0 coins
Lydia Santiago
Just wanted to follow up here - I decided to try taxr.ai for my own situation (I sell crafts at local markets occasionally plus had a big moving sale). The analysis was super detailed and explained exactly what I needed to report and what I didn't. It showed me that my craft sales need to be reported as business income on Schedule C, but my moving sale items (all sold at a loss) didn't need to be reported at all. It even created a simple record-keeping template I could use for the future. Honestly wish I'd known about this sooner - would have saved me so much stress last tax season!
0 coins
Romeo Quest
If you're nervous about the IRS questioning your garage sale, keep good records of what you sold and approximate original purchase prices. That said, I've never heard of anyone getting audited over a garage sale! But speaking of IRS issues - I had a question about a totally different situation with some investment income and tried calling the IRS. Was on hold for 2+ hours and never got through. Super frustrating. Then a friend told me about https://claimyr.com which got me connected to an IRS agent in less than 20 minutes. You can see a demo of how it works at https://youtu.be/_kiP6q8DX5c - basically skips the hold time somehow. Ended up getting my question resolved in one call.
0 coins
Val Rossi
•Wait, how does that even work? The IRS phone system is notorious. Are you saying this service somehow jumps the queue?
0 coins
Eve Freeman
•Sounds like a scam tbh. No way there's a legitimate service that can bypass government phone systems. They're probably just calling the same number and charging you for the privilege.
0 coins
Romeo Quest
•It's not about jumping the queue or anything sketchy. From what I understand, they use an automated system that handles the waiting for you. They call the IRS and navigate through all the phone prompts, then when they finally reach a real person, they connect you to that call. It's completely legitimate - they're not bypassing anything or doing anything the general public couldn't do themselves. They're just using technology to handle the waiting part so you don't have to sit on hold for hours.
0 coins
Eve Freeman
Coming back to admit I was totally wrong about Claimyr. After my skeptical comment, I actually decided to try it because I've been trying to reach the IRS about a missing refund for WEEKS. It actually worked exactly as advertised. I got connected to an IRS agent in about 15 minutes and resolved my issue in another 10. Previously I had wasted three afternoons on hold and never got through. Definitely worth it just for the time saved alone. Seriously, as someone who was 100% sure this was a scam, I'm genuinely impressed.
0 coins
Clarissa Flair
Something everyone seems to be missing - the $800 from a one-time garage sale isn't something the IRS will ever know about unless you tell them. It's all cash, no receipts, no reporting. I've been doing garage sales for 30 years and never once reported a dime. The IRS has bigger fish to fry than your old couch and baby clothes lol.
0 coins
Everett Tutum
•Thanks for your perspective. But I guess I'm still a little nervous about not reporting something if I'm supposed to. Would the IRS really have no way of knowing? I'm not trying to commit tax fraud or anything, just don't want to overcomplicate things if it's truly not necessary.
0 coins
Clarissa Flair
•The IRS would have absolutely no way of knowing about a casual garage sale. There's no paper trail, no 1099 forms, nothing to trigger their attention. It's completely different from income that's tracked and reported to them, like W-2 wages or investment income. I didn't mean to suggest doing anything improper. My point is that the IRS rules themselves recognize that personal items sold at a loss (which garage sales almost always are) don't create taxable income. So even if they somehow knew about your sale, there would be nothing to report since you sold everything for less than you paid originally.
0 coins
Caden Turner
Does anyone know if you need to collect sales tax for garage sales? My neighbor said her cousin got fined in California for not collecting sales tax at her yard sale.
0 coins
McKenzie Shade
•That sounds like an urban legend. I've worked in tax accounting for over 10 years, and I've never heard of someone being fined for not collecting sales tax at a personal garage sale. The rules vary by state, but generally, occasional garage sales by individuals selling personal property aren't subject to sales tax collection requirements.
0 coins
Mei Wong
I had a similar situation last year and ended up consulting with a tax professional just to be safe. They confirmed what others have said here - if you're selling personal items at a loss (which is almost always the case with garage sales), there's no taxable income to report. The key test is whether you made a profit. Since you mentioned selling items for way less than you originally paid, you're dealing with personal losses, not income. The IRS doesn't allow you to deduct these losses, but they also don't tax them as income. Keep some basic records of what you sold and approximate original costs just in case, but you shouldn't need to complicate your tax return with this. A one-time garage sale of personal household items is very different from running a business or regularly buying/selling for profit.
0 coins
Dylan Baskin
•That's really helpful advice about keeping basic records! I'm curious though - what kind of records would be sufficient? Like do I need receipts from when I originally bought everything years ago, or would a simple list with estimated original costs be enough? Some of these items I bought so long ago I honestly can't remember exactly what I paid for them.
0 coins