{"id":64669,"date":"2017-07-13T18:51:00","date_gmt":"2017-07-13T23:51:00","guid":{"rendered":"https:\/\/resource-center.hrblock.com\/?p=64669"},"modified":"2024-09-12T14:29:58","modified_gmt":"2024-09-12T19:29:58","slug":"cheap-chic-buyers-possibly-taxable-sellers","status":"publish","type":"post","link":"https:\/\/hrbcomlnp.hrblock.com\/tax-center\/filing\/adjustments-and-deductions\/cheap-chic-buyers-possibly-taxable-sellers\/","title":{"rendered":"Cheap is chic for buyers, possibly taxable for sellers"},"content":{"rendered":"\n

Whether it is through thrifting, upcycling or going to garage sales, getting the most for their money is important to today\u2019s consumers. Thrifting is just like it sounds: seeking out retail shopping experiences at thrift stores, flea markets and other businesses that sell used items. Upcycling<\/a> is using something in a creative way, e.g., making earrings out of buttons. But, the other side of the saving coin is that some people are making money \u2013 the sellers.<\/p>\n\n\n\n

\u201cThe sellers in thrifting and upcycling scenarios can find themselves running small businesses that can have new potential tax benefits, as well as responsibilities,\u201d said Alison Flores, principal tax research analyst at The Tax Institute at H&R Block. \u201cWhen this happens, income has been realized and the business income and expenses must be reported to the IRS even if the seller isn\u2019t intending to run a business.\u201d<\/p>\n\n\n\n

Infrequent sales \u2013 not a business, but still might owe taxes on sales<\/h2>\n\n\n\n

It is difficult to realize a profit when selling most household things that have outlived their usefulness for the owner. An example of a common sales transaction is selling a bike for $100 when the owner originally paid $500, which results in a $400 personal loss that is not tax deductible.<\/p>\n\n\n\n

The outcome is different when selling things that have been given a new life; if someone finds a bicycle in the trash \u2013 they paid nothing for it \u2013 and they clean it up, put air in the tires and sell it for $100, they have realized a gain.<\/p>\n\n\n\n

\u201cKeep in mind that as long as these are one-time sales, the selling is considered casual, but if the sales become frequent or substantial, several factors should be considered to determine if the activity is a business,\u201d Flores said.<\/p>\n\n\n\n

In addition to frequency and regularity of sales, these are among the factors taken into consideration for determining if the activity is a business:<\/p>\n\n\n\n