Selling Used Items Online: Taxable Gains, Non-Deductible Losses
Selling a used couch, a camera or old jewelry online is taxable only when you sell it for more than you paid. A profit is taxable income. A loss is not deductible. A Form 1099-K that arrives afterward shows the gross payments, which is a different number from your profit.
1. What counts as a personal item
The IRS defines a personal item as something you owned for personal use, with examples of a car, refrigerator, furniture, stereo, jewelry or silverware. Topic 409 adds that almost everything you own and use for personal or investment purposes is a capital asset. Selling one produces a capital gain or a capital loss.
Buying things in order to resell them is a different activity. For gig work, freelancing and selling goods as a hobby, the IRS says to report 1099-K payments on Schedule C. This page covers the ordinary case of clearing out things you already owned.
2. Gain or loss: the basic arithmetic
Per Topic 409, the gain or loss is the difference between your adjusted basis, generally what you paid, and the amount you realized from the sale. The 1099-K guidance also says fees, credits, refunds, shipping, cash equivalents and discounts are not taxable income and can be subtracted from the gross amount.
2.1. A worked example
Suppose you sold two items on a marketplace in 2026.
| Item | Paid | Sold for | Platform fee | Result |
|---|---|---|---|---|
| Camera lens | $300 | $450 | $45 | Gain of $105 ($450 - $45 - $300) |
| Sofa | $800 | $350 | $0 | Loss of $450 |
The marketplace may report $800 on a Form 1099-K (the sum of $450 and $350). Your taxable gain is $105, not $800.
The $450 loss on the sofa is not deductible. Topic 409 says losses from the sale of personal-use property, such as a home or car, are not tax deductible. You also cannot net that loss against the $105 gain to shrink it. The IRS guidance says that if you sold a mix of items at a loss and a gain, you report losses and gains separately.
3. How to report each case
Sold at a loss. The IRS gives you two options to avoid paying tax on money that was reported to it: report the payment at the top of Schedule 1 (Form 1040) so it zeroes out, or report the loss on Form 8949, which carries to Schedule D.
Sold at a gain. Figure the gain and report it on both Form 8949 and Schedule D.
If you receive no 1099-K, the gain is still taxable. The IRS says plainly that you must report income from payments for goods you sell, including personal items such as clothing or furniture sold at a gain, whether or not you get the form.
4. Short-term or long-term
The holding period decides the tax rate. Topic 409 says that if you held the item more than one year, the gain is long-term. At one year or less it is short-term, and a net short-term gain is taxed as ordinary income.
For tax year 2025, the rate on most net long-term capital gain is no higher than 15% for most individuals. A 0% rate applies if taxable income is at or below $48,350 for single filers or $96,700 for married filing jointly. The 15% rate runs up to $533,400 for single filers and $600,050 for joint filers, with 20% above that. Collectibles, such as coins or art, can be taxed at up to 28%. These are the rates for the 2025 return, which is the latest published as of October 2026.
5. The 1099-K threshold
Payment apps and online marketplaces must send a 1099-K when payments for goods or services total over $20,000 in more than 200 transactions, though they may send one with lower amounts. If customers pay you directly by credit, debit or gift card, the processor sends one no matter how little you received. Sending or not sending the form does not change the tax rule.
6. If the form is wrong
Money from friends and family as gifts or repayment of a personal expense should not be on a 1099-K and is not taxable. Mark such payments as non-business in the app when possible. If you get a form you should not have, ask the issuer for a corrected one showing zero, and file your return without waiting.
7. Records that make this easy
You need the purchase price to prove a loss or a small gain. Receipts, old order emails and card statements work. The IRS says good recordkeeping supports the income and deductible expenses you report.
8. Key takeaways
- Profit on a personal item sold online is taxable; a loss is not deductible.
- Gain equals what you realized, after fees and similar items, minus what you paid.
- A 1099-K reports gross payments and does not equal taxable profit.
- Report gains on Form 8949 and Schedule D; losses can be zeroed out on Schedule 1 or reported on Form 8949.
- Long-term (held over one year) gains have lower rates than short-term gains.