Here's a tax tip from Tom Copeland:
If you buy items at a garage sale, you need to keep an adequate record to deduct it as a business expense.
There are several things you can do:
If you are hosting your own garage sale, you probably will not have any tax consequences. If you sell items at a loss that you only used personally, you don't have to report the income received. If you sell items at a loss that you used in your business, you could report the business loss as a tax deduction, or not report anything at all. It's unlikely that you'll sell any item at a profit, but if you do, you must report it as income on Schedule D.
Alison adds: I'm not so sure that you are unlikely to sell an item at a profit. It could all be profit if you sell something you have previously deducted or depreciated as a business expense. Gain from the sale of a business asset is reported on Form 4797.
For further information, refer to Tom Copeland's Family Child Care Tax Workbook and Organizer.
Last updated: 27 November 2013
Posted on 0000-00-00 00:00:00