In this insightful ‘Dr. Friday Tax Tips – One Minute Moment’ episode, Dr. Friday, president of Dr. Friday’s Tax and Financial Firm, discusses the intricacies of IRS regulations regarding the sale of personal items. She highlights that selling personal items at a gain can trigger a 1099K form. The episode emphasizes the importance of two crucial forms: Form 8949 for the sale and disposition of capital assets and Schedule D. Dr. Friday stresses the necessity of retaining original purchase receipts, as failing to provide these during an audit could lead to assuming a zero-cost basis for the sold items. The episode is a must-listen for anyone navigating the complexities of personal item sales and their tax implications.
Transcript
G’day. I’m Dr. Friday president of Dr. Friday’s Tax and Financial Firm. To get more info go to www.drfriday.com. This is a one-minute moment.
The IRS says selling personal items at a gain can cause a 1099k for personal items sold. There is a form, actually two forms. You can form an 8949 for sale and other disposition of capital assets or the Schedule D when selling those. The hard part of all this is if you’re selling personal items you need to be saving the receipt of the original cost. If you don’t have it you don’t have a deduction. If you can’t prove how much money you paid for something that you’re selling 10-15 years later the cost factor is zero unless you can prove otherwise. That’s what the IRS is saying when they review audits.
You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.