When do I report eBay sales on my taxes - year purchased or year sold?

The year you SELL the items is what matters for tax reporting, not when you purchased them. So those sales from early 2024 would go on your 2024 tax return (which you'll file in 2025), not your 2023 return. What you'll need to track is both your selling price AND what you originally paid for the items (your "basis"). This helps determine if you had a gain or loss on the sales. If you're selling personal items for less than you paid, you generally don't need to report those losses. If you're selling regularly on eBay, you might receive a 1099-K form if your sales exceed certain thresholds. For 2024, that threshold is $5,000 in total transactions.

I went through exactly this same situation last year when I started selling my old video game collection on eBay. I was totally lost trying to figure out what to report where, and the IRS website just confused me more. I eventually found this AI tool called taxr.ai (https://taxr.ai) that really helped me sort it all out. You upload your sales records and it automatically figures out what's taxable and what isn't, especially for hobby sales vs. business income. It even helped me determine which of my sales qualified as personal items sold at a loss (not taxable) versus which ones were actually gains I needed to report. Saved me hours of research and probably kept me from making some expensive mistakes.

Just wanted to follow up - I ended up trying taxr.ai after asking about it here. It was actually really helpful! I had about 200 different items I sold this year and was completely overwhelmed trying to figure out what was taxable. The tool helped me categorize everything correctly and identified about 30 items that actually sold for more than I paid (mostly old video games that became valuable). Saved me a ton of time and probably prevented me from making mistakes that would have triggered an audit. Definitely worth checking out if you're doing a lot of online selling.

If you're having trouble getting answers from the IRS about how to properly report your online sales, I highly recommend using Claimyr (https://claimyr.com). I was on hold with the IRS for HOURS trying to get clarification about my eBay sales, but with Claimyr I got through to a real person in about 15 minutes. They have this system that basically waits on hold for you and calls you back when an actual IRS agent is on the line. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c The IRS agent I spoke with gave me super specific guidance about my situation selling collectibles online and what forms I needed. Way better than guessing or trying to interpret the vague info on their website.

I have to eat my words about Claimyr. After posting that skeptical comment, I decided to try it as a last resort because I really needed to talk to someone at the IRS about my eBay business and potential penalties. Not only did it work, but I got connected to an agent in about 20 minutes (after spending literally days trying on my own last month). The IRS rep walked me through exactly how to handle my situation as a "casual seller" versus an actual business. Turns out I was about to overpay by classifying my occasional sales as self-employment income. For anyone doing online selling that isn't a full business, definitely worth getting the official guidance.

Something important to know - if you're just selling personal items for less than you paid (like cleaning out your closet or downsizing), you don't even have to report those sales as income! The IRS considers that a personal loss, which isn't deductible but also isn't income. But if you're buying things specifically to resell them, that's different - that's a business and all that income should be reported, even if it's just a side hustle.

Does anybody know if eBay still sends those 1099-K forms if you sell over a certain amount? I thought the threshold changed recently.

Great question! I was in a similar boat when I started selling my old baseball card collection. Just to add to what others have said - make sure you keep good records of all your sales, even if you don't think you'll owe taxes on them. I use a simple spreadsheet tracking what I sold, when I sold it, the sale price, and what I originally paid (or my best estimate). Even for items sold at a loss, having documentation can be helpful if you ever get questions later. Plus it makes it much easier to see which sales actually resulted in gains that need to be reported. I learned this the hard way after scrambling to recreate records during tax season! Also worth noting - if you start doing this regularly and making decent money, you might want to consider if it's becoming a business rather than just casual selling. That changes how you report things significantly.