Updated August 3, 2026. Quick answer: selling your own used possessions for less than you paid is not taxable income, and the loss is not deductible either. Clearing out a house is not a business. But if a form arrives, report it and offset it rather than ignoring it.
The rule
IRS.gov, Form 1099-K FAQs: General Information: ‘All income, no matter the amount, is taxable unless the tax law says it isn’t – even if you don’t get a Form 1099-K.’ IRS.gov, Form 1099-K FAQs: What to do if you receive a Form 1099-K (Q6, ‘I sold a personal item and the gross payment amount is reported on Form 1099-K. How do I determine my taxable income?’): ‘The gain on the sale of a personal item is taxable’ [reported on Form 8949 and Schedule D], and ‘The loss on the sale of a personal item is not deductible’ [reported via offsetting entries: proceeds on Schedule 1, Part I, Line 8z ‘Other Income,’ and cost on Schedule 1, Part II, Line 24z ‘Other Adjustments,’ up to but not more…
— IRS.gov, Form 1099-K FAQs: General Information; IRS.gov, Form 1099-K FAQs: What to do if you receive a Form 1099-K
Two separate statements there, and both matter. A gain on a personal item is taxable — if you sell something for more than you paid, that profit counts. A loss on a personal item is not deductible — you cannot use the shortfall against other income.
For almost everything in a normal house, the second case applies. Furniture, appliances, clothing, tools and electronics are worth less than you paid. Selling them produces no taxable income.
When it is a gain
- Collectables and antiques that appreciated.
- Jewellery, art, or a musical instrument bought long ago and now worth more.
- Anything you bought specifically to resell. That is not clearing out a house; it is a business, and it is taxed as one.
The distinction is what you were doing, not how much money moved. Selling your own accumulated possessions is not a business however many items there are.
If a 1099-K arrives for personal items
It can happen — a platform may issue one, or your records may not match what the platform reported. The reporting threshold changed in 2025, so forms are less common than the last few years of guidance suggested. But if one arrives:
- Do not ignore it. The IRS received a copy. Silence looks like unreported income.
- Report the proceeds as other income, then offset the cost as an adjustment — capped at the proceeds amount, because the loss is not deductible.
- The two cancel and nothing is taxed. The entries exist so the return matches the form the IRS holds.
- Keep whatever evidence of cost you have. Original receipts are ideal and rarely available; a reasonable, documented estimate is what most people actually have.
The practical point for anyone downsizing
Emptying a family home generates a lot of small sales and can look alarming in a platform’s annual total. Volume is not the test. If you are selling things you owned and used, for less than they cost, there is no income there however large the total looks — and the paperwork, if any arrives, nets to zero.
Related: the reporting threshold and what changed.
General information drawn from the United States Code and the Code of Federal Regulations, not legal or benefits advice. Social Security rules and figures change; every figure here carries the period it applies to. Your own earnings record and the correspondence you have received govern your case, and SSA is the only source for either. We sell nothing and we are not affiliated with the Social Security Administration.