You’re good at cleaning out the house and making a buck doing it. You are the Yard Sale Queen or King. While you may see cash where others see beloved possessions, you know that sometimes there are some real treasures hidden away in Aunt Dottie’s attic. That can mean some true cash…ever seen “Antiques Roadshow”? People bring in old things from their homes and find out they’re worth thousands of dollars.
Treasures are Taxable
When it comes to selling your treasures for a profit, it isn’t as simple as you always thought. For example, did you know that you’re supposed to report capital gains and pay income tax to the IRS when you file your return? Yup, the IRS wants its share of the spoils, even when you sell your Aunt Dottie’s prize collection of rooster-themed salt and pepper shakers..if you turned a profit, that is.
Your Old Junk Isn’t
But when you sell your old things at a garage sale to make a few bucks, that is not considered capital gains because you are selling it for less than what you paid. Yes, you’re making some money but if you consider your garage sale items like investments, you’re losing hand over fist!
It’s only when something appreciates in value that you are making money and the IRS gets involved. IRS publication 544 explains this in detail, so you know the difference between un-taxable garage sale money you make, and taxable collector’s item sale on which you made a mint.
Other Tidbits You’ll Find in Pub 544
Basically this publication covers any money you receive that’s not from a job or an investment. When you sell real estate (your home) or securities, or trade for them, or exchange property for stock, or sell a business, renew a franchise or other sales of assets, Publication 544 spells it all out for you. Cutting some timber on your land? The IRS wants their share of the profit. Selling your childhood stamp collection? You can’t profit without sharing with the IRS, unfortunately. All this and more, in 42 pages of Pub 544.