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If I were to sell my DC items, do I somehow have to report or claim the income from the sale of these items? Like I have some extra highchairs, exersaucers, etc, so I want to put them on CL to sell.
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I don't know but i'll need to know this as well this next year. I hope someone knows! -
Selling Stuff
Believe it or not, the answer to this question is quite complicated. If you had fully deducted the item used for your business, then any money you make from the sale of the item is taxable income. So, if you bought a $40 toy, deducted $40 on your taxes, and sold it for $10, you must report $10 as income. If you bought a $400 used swing set and had depreciated it for 3 years, claiming $200 in depreciation over that time, and then sold it for $100, you would have a $100 loss ($400 - $200 = $200 - $100 = $100) that you could deduct as a business expense.
Yikes! What a headache.
In general providers don't bother reporting any income or loss when selling their stuff. Typically, they sell their stuff at garage sales or more recently on CraigsList. I have never seen the IRS go after providers on this, so I would suggest that you don't report any income or loss.
If you want to see the exact details of how to calculate a gain or loss and where to put it on your tax return, see my Family Child Care Tax Workbook and Organizer.Comment
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