Antique Sales

[gman]

I have a new client that sells her items in an antique/gift shop. Most of the items she sells, she has had for many years--mostly items she said were from "cleaning out her house". Has good sales and rent records from the store she sells from. The question is what is her cost in the items. She estimates 10.00 per item. The sales sheet has daily sales broken down and most items sell for $3 to 20 dollars. Monthly sales average $800.00 per month. Any suggestion on calculating the cost for the items sold?

After paying her rent, commissions and her $10 per item cost. She would have a loss every month..

[thomtax]

I don't know about how to price, but even though she may show a loss each month, in this situation it should be kept in mind that she is raising cash to send from items that were just setting around her home. Sometimes a "paper" loss can, in reality, be a gain for the individual.

Good luck with this and would be interested as to how you end up handling it.

LT

[taxea]

If she keeps such good records perhaps she has the purchase records for the items she is selling.

[ChEAr$]

Wouldn't cost or fair market value be right? Assuming of course everything sold came from her house.

I have a similar client with a booth in an antique mall. She stocks her booth weekly and the malls administers the rest, collecting sales and sales taxes, remitting her the net sales less rent. However she buys stock from others, e.g. estate sales, garage sales, etc. so her records are good.

This reminds me of a once upon client who gave oodles of stuff to charities each December. What they did was buy stuff dirt cheap at garage sales and value it highly for charitable purposes. Until I got wind of their scheme, that is.

[taxea]

Wouldn't cost or fair market value be right? Assuming of course everything sold came from her house.

I have a similar client with a booth in an antique mall. She stocks her booth weekly and the malls administers the rest, collecting sales and sales taxes, remitting her the net sales less rent. However she buys stock from others, e.g. estate sales, garage sales, etc. so her records are good.

This reminds me of a once upon client who gave oodles of stuff to charities each December. What they did was buy stuff dirt cheap at garage sales and value it highly for charitable purposes. Until I got wind of their scheme, that is.

Cost would be right but she can't just take it out of thin air. What happens when Uncle asks for receipts of purchase?

[Burke]

This appears to be a situation where she is taking personal items to a consignment shop for sale. There is no loss allowed on the sale of personal property.

[taxea]

Burke aren't you reading something into this post that isn't stated? There is no mention of a consignment shop and if there is a profit doesn't she still need an accurate basis?

[gman]

booth

I believe she has a booth there and pays a montly rent. Some days she stays there and works the register. She does recieve a 1099 for the days she works.

[Burke]

Yup, missed the part about rent completely. Still sounds like she is perhaps renting a booth or stall, since no other expenses are mentioned, like utilities, insurance etc. A cash loss every month sounds very much like a hobby to me, how can it be an intent to make a profit? To determine basis, she would have to use the original purchase price (and or FMV at inheritance) and depreciate. Doesn't sound like very valuable stuff that would have appreciated.