Hello! I'm a Full Time University Student on Youth Allowance and a casual worker. In the past financial year, I earned around $10,000AUD from either income stream. Around December 2023, I decided to sell personal clothing items online via Depop to help fund the purchase of an iPad for my studies. Over the year, I made $1,700 (after fees/shipping costs but not accounting for the initial cost of each item) and spent around that same amount on the new device. Throughout the year, I did not report this as income with Centrelink for my Youth Allowance payment and am unsure whether to include it in my Tax Return. Is this considered taxable income? Is reselling personal clothing items online considered a business? I'd appreciate the help before I submit my return, thank-you :)
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The sale of personal items would be a CGT event. If no personal item cost you more than $10,000 then the sale is CGT exempt. Nothing to be reported on your tax return.
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Hello,
Certainly! Let’s break it down:
Taxable Income from Selling Personal Items Online:
Whether the income from selling personal items online is taxable depends on the specific circumstances.
If you made a profit (i.e., the total amount you received from sales exceeded your costs), that profit may be considered taxable income.
However, if you sold items at a loss (i.e., your costs exceeded the total amount received), you generally don’t need to pay taxes on that loss.
Keep in mind that the loss in this case is not deductible.
Business vs. Hobby:
The distinction between a hobby and a business matters for tax purposes.
If you sold items as a hobby (occasional sales), the income may not be considered business income.
However, if you regularly engage in selling items online with the intention of making a profit, it could be considered a business activity.
Reporting requirements differ for hobbies and businesses.
Reporting and Tax Return:
Since you made a significant amount from selling personal clothing items online, it’s essential to report it.
Consult with a tax professional or use tax software to accurately report your income and any associated expenses.
You may need to include the $1,700 in your Tax Return, but remember to deduct any relevant costs (e.g., shipping fees, Depop fees) to calculate your actual profit.
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Best Regards
esther598
After crunching the numbers in a spreadsheet, it appears I've sold most (if not all) personal clothing items at a loss from what I initially paid for each item. With this in mind, I'm assuming it is not considered taxable business income and I do not need to include as income on my income tax return. However, if anyone is knowledgable, feel free to confirm this. Thanks :)
The sale of personal items would be a CGT event. If no personal item cost you more than $10,000 then the sale is CGT exempt. Nothing to be reported on your tax return.
@Taxduck Thank-you for clarifying! :)
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