I am restarting an old eBay business after 12 years away. I was a powerseller for many years, but never officially ended the business with the IRS - my dad got sick and in taking care of him, I sold less and less. Then my husband took a corporate job, and I just never got back to it.
I have a lot of old merchandise from this business. It's beads, so they were small and easy to cart around with me. To complicate matters, my mom used to sell beads too, and when she stopped running her business (also over 10 years ago), she sold me her remaining stock. Over the years, I've considered making jewelry and in organizing to do so, have re-sorted all these beads several different ways to where now everything is just all mixed together. Some of these beads were contemporary at the time and are likely worth less than 12 years ago. Others were vintage and are likely worth more. Many of the beads are handmade. I have absolutely no idea of total value.
Basically, what this comes down to is that I have a bunch of stuff to sell with no idea of what the basis is. I intend to sell the stuff I don't like on eBay - listing cheaply and if they are worth more, assuming people will bid against each other - and to make jewelry with the rest and sell it on Etsy. Problem is determining fair market value. For most of the items, the only way of finding out how much they are worth is to sell them and see what people will give me for them. IRS docs seem to say the basis is $0 unless you can document how much they are worth. But my document would have to be the receipt for what I sell them for. If I sell a lot of beads for $50, I'm very unsure whether my basis is $0 (which seems unfair, since they do have value and I did purchase them with the intent of selling them) since I can't prove the value prior to selling, or $50 because that's obviously the value since they just sold for that much (which also seems unfair ONLY if I am selling them for more than I bought them for, but I can't know that). I don't want to pay too much and am not trying to dodge the taxes. I just want to do it right.
Any ideas? Thanks in advance. :)
I have a lot of old merchandise from this business. It's beads, so they were small and easy to cart around with me. To complicate matters, my mom used to sell beads too, and when she stopped running her business (also over 10 years ago), she sold me her remaining stock. Over the years, I've considered making jewelry and in organizing to do so, have re-sorted all these beads several different ways to where now everything is just all mixed together. Some of these beads were contemporary at the time and are likely worth less than 12 years ago. Others were vintage and are likely worth more. Many of the beads are handmade. I have absolutely no idea of total value.
Basically, what this comes down to is that I have a bunch of stuff to sell with no idea of what the basis is. I intend to sell the stuff I don't like on eBay - listing cheaply and if they are worth more, assuming people will bid against each other - and to make jewelry with the rest and sell it on Etsy. Problem is determining fair market value. For most of the items, the only way of finding out how much they are worth is to sell them and see what people will give me for them. IRS docs seem to say the basis is $0 unless you can document how much they are worth. But my document would have to be the receipt for what I sell them for. If I sell a lot of beads for $50, I'm very unsure whether my basis is $0 (which seems unfair, since they do have value and I did purchase them with the intent of selling them) since I can't prove the value prior to selling, or $50 because that's obviously the value since they just sold for that much (which also seems unfair ONLY if I am selling them for more than I bought them for, but I can't know that). I don't want to pay too much and am not trying to dodge the taxes. I just want to do it right.
Any ideas? Thanks in advance. :)
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