In most cases, selling your own used household items for less than you paid is not taxable income. A couch you bought for $800 and sell for $150 isn't a profit, so there's usually nothing to report. Things change if you sell items for more than you paid or buy things to resell.
This is general information, not tax advice. If you sell a lot, or often, check with a tax professional.
United States: when garage sale money is taxable
The IRS looks at whether you made a gain, not at how much cash you took in. For a typical garage sale, three cases cover almost everything:
- Personal items sold for less than you paid: not taxable, and the loss can't be deducted
- An item sold for more than you paid (a collectible or antique, say): the gain is a taxable capital gain
- Items you bought to resell, or regular flipping: that is business income
Payment apps and Form 1099-K
Venmo, PayPal and Cash App can send you a Form 1099-K once you pass the federal threshold of $20,000 and 200 transactions in a year. Some states use lower limits.
Cash isn't reported by any app, but taxable gains still count however you were paid. If you use an app, mark transfers from friends and family as personal so they aren't mixed in with sales. Our guide to garage sale payments covers taking cash, Venmo and e-Transfer safely.
Canada
Under CRA rules, used household items like furniture, clothes and toys are "personal-use property". Losses on them can't be claimed.
For gains, the cost and the selling price are each treated as at least $1,000, so ordinary garage sale items almost never create a taxable gain. Regular buying and reselling is different: that is business income.
United Kingdom
Selling your own unwanted things is generally not trading, so a garage sale or car boot sale clear-out usually has no tax to pay. Most items sold for under £6,000 are free of Capital Gains Tax.
If you do trade, meaning you buy things to resell, the £1,000 trading allowance can apply. Selling at a car boot? Our car boot sales guide covers pitches, pricing and what to bring.
Simple records to keep
You don't need full accounts for a weekend clear-out, but a few records make any question easy to answer later:
- A rough list of big-ticket items and what you paid for them
- Payment app statements for the weekend of the sale
- Receipts for anything you sold at a profit
Ready to sell?
Most garage sales are simply a tax-free way to clear space. Set fair prices with the pricing guide, use the free change calculator to plan your cash float, then post your sale for free and see the rest of our garage sale tools.
You usually don't need a business license for an occasional sale, but some cities need a permit. Check garage sale permits for the rules where you live.
Frequently asked questions
Do I have to report garage sale income to the IRS?
Usually not, if you sold your own used items for less than you paid. If you sold something for more than you paid, the gain is taxable, and buying items to resell is business income.
Will Venmo or PayPal report my garage sale?
They can send a Form 1099-K once you pass the federal threshold of $20,000 and 200 transactions in a year, and some states use lower limits. A typical garage sale won't reach the federal threshold.
Is garage sale money taxable in Canada?
Rarely. Used household items are personal-use property, and the cost and selling price are each treated as at least $1,000, so ordinary items almost never create a taxable gain. Regular buying and reselling is business income.
Do I need a business license to have a garage sale?
Usually no for an occasional sale, but some cities need a permit. Check your city's rules before the sale.