As I was out and about this morning, I noticed on the corner at one of our busiest intersections a cluster of signs. Surrounding a yard sign advertising the summer rec center programs were at least seven homemade signs announcing garage/ rummage/ yard sales. (I would have loved to get a pic but I would have had to get out in the middle of the intersection to do it. I don’t think so!) Our local newspaper listed 87 classified ads announcing the sales. The local AM radio station has a shorter list but they announce the sales on air early on Saturday mornings. Around here, rummage sales are a big part of weekends (generally Fridays and Saturdays) especially during early summer.
So what about the money you make at a rummage sale, is it taxable? It actually depends on individual sales. According to the IRS discussing online sales through eBay and the like:
If your online sales are the Internet equivalent of an occasional garage or yard sale, you generally do not have to report the sales if you did not receive more than you originally paid for the item you sold. In a garage sale, you generally sell household items you purchased over the years and used personally. If you paid more for the items than you sell them for, the sales are not reportable. Losses on personal use property are not deductible, either.
So that blouse you paid $25 dollars for but sell for $3 isn’t reportable because you sold it for a loss. Let’s face it; garage sales are for cleaning out unwanted items and picking up a few bucks doing it. If you have collectables that have increased in value, selling them from a table in your front years won’t bring the best price (and may be taxable.)
So, you probably won’t be subject to income taxes, but what about sales tax? I can’t speak for all states, but Kansas isn’t worried unless you are in the garage sale business. If you have one or two sales in a year, you don’t have to worry about collecting sales tax. But if your garage sale seems to be a weekly event, then KDOR might classify you as a retail seller and want some money.
What are you doing with the unsold items? If you’re boxing them up for your next sale, fine. But if you are boxing and bagging them up to take to your local charity thrift shop, taking a little time now might save you some tax money next spring. Get some paper and as you bag up the remains write down what it is, the price you were selling it for and the condition it’s in. When you drop off the bags/boxes at Goodwill, Salvation Army or your favorite thrift store get a dated receipt. Staple the receipt to the list and put away until tax time. You have a charitable deduction that might save you some tax money.
Garage/ rummage/ yard sales are a way to clear out unused items, make a little money and maybe save a little on your taxes.