Personal Finance

Do I Need To Pay Tax When Selling Used Items?

  • Last Updated:
  • Jun 8th, 2022 2:55 am
Newbie
Jun 5, 2022
3 posts

Do I Need To Pay Tax When Selling Used Items?

I'm selling anime figures or statues that I have collected more than 7 year, to pay my living.

Last year, I sold half of my collection; I did over 60 transactions via PayPal and $22k in gross sales receipts( 18k$ items value and 4k shipping). Because I don't make any profit from my sales, do I need to pay or file tax ?
Last year my income is just 7k$ and I was unemployed. I received 1,3k$ in tax refund.

My friend told me that sold goods are taxable as income, so my total income last year will be 22k + 7k =29k, is it correct? And how?

Any information is much appreciated. Thanks
7 replies
Deal Expert
User avatar
Jan 9, 2011
19723 posts
28591 upvotes
Vancouver
No this is not income and you do not report it as income.
But If you are selling the collectible items for more than you paid for them (i.e. turned a profit), you may need to report them as capital gains and pay that tax. Here's a guide to your capital gains tax obligations when selling art and collectibles: https://www.cibc.com/content/dam/person ... les-en.pdf
Deal Fanatic
Jan 31, 2007
6365 posts
6726 upvotes
Center of Canada
NathanTr wrote: I'm selling anime figures or statues that I have collected more than 7 year, to pay my living.

Last year, I sold half of my collection; I did over 60 transactions via PayPal and $22k in gross sales receipts( 18k$ items value and 4k shipping). Because I don't make any profit from my sales, do I need to pay or file tax ?
Last year my income is just 7k$ and I was unemployed. I received 1,3k$ in tax refund.

My friend told me that sold goods are taxable as income, so my total income last year will be 22k + 7k =29k, is it correct? And how?

Any information is much appreciated. Thanks
No, you exchange your item for money, you did not make profit. So no.
Even if you male big profit out if it and need to dile tax, it is not base on total price. It is only the profit part.
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Bright side of RFD: Often find good deal
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Jr. Member
Nov 26, 2021
126 posts
167 upvotes
You only pay income tax if you made a profit on the sales (Capital gains)

For eg- Bought anime figure for $50 and sold for $90. ($40 profit)

If you had a Loss, theres nothing to be Taxed.

you are not taxed on Gross Sales... Only on net profit.. and as added benefit, you only pay tax on 50% of the net profit...





NathanTr wrote: I'm selling anime figures or statues that I have collected more than 7 year, to pay my living.

Last year, I sold half of my collection; I did over 60 transactions via PayPal and $22k in gross sales receipts( 18k$ items value and 4k shipping). Because I don't make any profit from my sales, do I need to pay or file tax ?
Last year my income is just 7k$ and I was unemployed. I received 1,3k$ in tax refund.

My friend told me that sold goods are taxable as income, so my total income last year will be 22k + 7k =29k, is it correct? And how?

Any information is much appreciated. Thanks
Deal Expert
Oct 27, 2003
18444 posts
9756 upvotes
Greater Toronto Area
You don't need to pay tax unless you sold the items at a profit.

That said, if CRA looks at your bank activity, selling 22k of goods in a short period of time is going to look like business income to them. You will need to provide proof that it isn't, if asked.

If you want to avoid CRA scrutiny, cash transactions are better, although if you put a large amount of cash in your bank account in a short time, the above situation will apply.

Use your imagination.
Deal Fanatic
Sep 23, 2007
5654 posts
2168 upvotes
In theory no you don't pay tax because you did not make a profit. In reality, if CRA sees your bank statements for some reason (such as audit for another reason), and see the cash inflows, they may ask for details. At that point you tell your story. Then they will likely ask for supporting documentations such as costs. The cash inflows they can choose to treat as taxable income. Then whether you can prove your costs = the selling prices is another story. For example, you might have trouble finding old receipts or email records of your purchases to prove you didn't make a profit.
Deal Guru
User avatar
Jun 1, 2006
12700 posts
15951 upvotes
You only pay income tax if you made a profit on the sales (Capital gains)
Only if you sell one item.

Most people who sell on eBay sell more than one item and if the items sell for a losses you can offset the losses against any gains. When it comes to collectibles most people lose money. In your case since you did not make any gains don't bother to file it on your income tax return.
Have a nice day!


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