Originally Posted by nephinfan
This is probably a dumb question, but I don't care. I've been following this thread as it gets updated & my question is this:
How are cards NOT considered personal property? What's the difference between selling online vs. selling at a garage sale?
(I've already paid taxes on them when I bought them.)
tangible property is not taxable.
You paid sales tax, which is a completely different tax than income taxes.
Theoretically, personal use property will be considered a capital asset. The kicker is you are not allowed to deduct a capital loss from personal use property. You need to report a gain as a capital gain - however because of two key factors there usually isn't tax associated with the transaction of gains on personal use property.
1) Capital gains are given preferential tax treatments. So if you are a 15% or less marginal rate taxpayer you have no tax associated with capital gains.
2) Personal use property nearly never is sold for more than you paid for it. How often can you sell clothes you've worn for two years, a car you've driven for 4 years, a table your kids have colored on for 18 years, etc. for more than you paid? Next to never. But in the rare case where you sell personal use property for more than you paid for it - then yes you would have to report a gain associated with the sale. It happens so little and is so far a few between that in the industry is almost common knowledge that personal use property is not taxable. But I guess there could be the rare case where you skidded up undies and wife beaters are worth more when you sell it than when you bought it