eBay 1099-K: Do You Pay Taxes on Selling Used Items Online?
When eBay, Poshmark and Mercari send a 1099-K, why selling your own used items at a loss is not taxable, how to report it correctly, and what changes when you resell for profit.
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Key takeaways
- eBay, Poshmark and Mercari send a 1099-K above $20,000 and 200 transactions; in some states from $600.
- Selling your own used things for less than you paid is not taxable, and the loss is not deductible.
- If you got a 1099-K for such sales, report them on Schedule 1 so they net to zero.
- Items sold at a gain are capital gains. Reselling for profit is a business with self-employment tax.
Clearing out the closet on eBay or Poshmark is not a business, and in most cases it is not taxable at all. But a 1099-K in the mail can make it look like you owe tax on everything you sold. Here is what the form really means and how to handle it.
Please note
General information about US federal rules as of October 2026, including the IRS's published Form 1099-K guidance; not tax advice.
When you get a 1099-K from eBay, Poshmark or Mercari
| Where you live | 1099-K threshold |
|---|---|
| Federal rule (most states) | More than $20,000 in sales and more than 200 transactions |
| Maryland, Massachusetts, Vermont, Virginia, District of Columbia | $600 |
| Illinois | $1,000 and at least 4 transactions |
The federal threshold was supposed to drop to $600, but the July 2025 tax law restored $20,000 and 200 transactions for 2025 and later. The form shows gross payments, including shipping buyers paid, before platform fees. Payment apps such as PayPal and Venmo follow the same thresholds for goods and services payments.
Three situations, three tax results
| Situation | Example | Tax result |
|---|---|---|
| Personal item sold at a loss | Couch bought for $1,200, sold for $300 | No tax; loss not deductible |
| Personal item sold at a gain | Watch bought for $800 in 2015, sold for $2,000 | $1,200 long-term capital gain (collectibles up to 28%) |
| Reselling for profit | Thrift finds bought for $6,000, sold for $21,000 | Business income on Schedule C with self-employment tax |
How to report personal items sold at a loss
If a 1099-K includes only personal items sold for less than you paid, the IRS asks you to show it on Schedule 1 so the numbers match:
- Part I, line 8z (other income): enter the 1099-K amount, described as "Form 1099-K Personal Item Sold at a Loss".
- Part II, line 24z (other adjustments): enter your cost, up to the same amount, with the same description.
The two entries cancel out, so your income does not rise. Keep proof of what you paid, such as old receipts, order confirmations or bank statements, in case the IRS asks.
Personal items sold at a gain
Sold something for more than you paid, such as a collectible, sneakers or a vintage item? The gain is a capital gain, reported on Form 8949 and Schedule D. Items held more than a year qualify for long-term rates, but collectibles such as art, coins, stamps and antiques are taxed at up to 28%. Losses on personal items cannot offset these gains.
Resellers: when it becomes a business
If you buy items to resell, sell regularly and aim for profit, you run a business. Report it on Schedule C:
- Cost of goods sold: what you paid for the items you sold.
- Platform fees: eBay final value fees, Poshmark's commission, promoted listings.
- Shipping and supplies: labels, boxes, poly mailers, tape.
- Mileage to thrift stores, estate sales and the post office (72.5¢ / 76¢ per mile in 2026).
- Equipment and storage: scale, printer, lighting, shelving, a storage unit.
Example
A reseller sells $21,000 of thrifted clothing on eBay. Items cost $6,000, fees are $2,800 and shipping costs $2,100. Net profit: $10,100. Self-employment tax: $1,427, plus income tax at the seller's bracket. See self-employment tax 2026 and our Etsy tax guide, whose seller deductions apply to eBay too.
Mixed sales on one 1099-K
If your form includes both personal items and business sales, split them: report business sales on Schedule C, personal items sold at a loss on Schedule 1 and personal items sold at a gain on Form 8949. If the form is plainly wrong, for example because it includes money from friends, ask the platform for a corrected form; the IRS explains how to handle errors in its 1099-K guidance.
Sales tax
eBay, Poshmark and Mercari collect and remit sales tax on orders as marketplace facilitators in the US states that charge it, so casual sellers normally have nothing to do here.
Frequently asked questions
Do I have to pay taxes on things I sell on eBay?
Not on personal items sold for less than you paid. Gains on personal items are capital gains, and reselling for profit is taxable business income.
Why did I get a 1099-K from eBay?
Your sales passed the federal threshold ($20,000 and 200 transactions) or your state's lower threshold. The form reports gross sales, not taxable income.
How do I report a 1099-K for personal items?
Enter the amount on Schedule 1, line 8z, and the same amount (up to your cost) on line 24z, both described as "Form 1099-K Personal Item Sold at a Loss".
Does Poshmark send a 1099-K?
Yes, under the same federal and state thresholds as eBay.
Do I pay self-employment tax on eBay sales?
Only if you sell as a business, for example as a reseller. Selling your own used belongings is not self-employment.
