IRS asked you tax only based on the income from paypal/ebay. You did not
report them so IRS has no information on your cost.
If you can prove you sold only personal items and your cost is more than
your income then you may not necessarily to pay the full $1500 tax +
interest.
The Sale of Any Personal Asset
The category of “personal” capital assets is an all-encompassing category
and includes almost everything you own. It includes items like your car to
your television to your clothing to your vintage eight-track player.
When you sell an item, the selling price minus your basis in the item (
usually the amount you paid for the item) will equal your gain or loss.
Anytime you sell one of these items and the sale results in a gain, you will
be taxed on this item.
However, the IRS prohibits taxpayers from claiming any personal losses on
their tax return. So, if you sold your car and incurred a $3,000 loss,
unfortunately, you won’t be able to claim that loss on your taxes. This is
also the reason that you cannot claim a loss on your home, since your home
is also considered a personal capital asset.
