How long this process will take may depend on your relationship to material objects as well as on how badly you need the money that could be earned by selling off items one by one. The sad truth of the matter is that our beloved possessions, once used, often look like junk to others.
Although online sales have become the first possibility that occurs to many people, there’s no need to jump online right away. Local consignment, used book, clothing, and vintage or antique stores can be the most lucrative places to sell your possessions, because they draw in an interested audience who might spot your item, like it, and make an impulse purchase. Or if you are downsizing, talk to an estate sale specialist.
Your next stops might be your local Craigslist (which lets you sell items one by one) and eBay (where you will need to register as a “seller”).
For specialized items, you might want to check out these online possibilities:
A garage sale should be the last thing you try. It can be reasonably profitable if your house is well-located, but can also be a huge waste of time; and you’ll already have plenty to do with selling your home and moving into a new one. If you itemize your tax deductions, don't forget that goods donated to a charitable organization can go on the list. For this, you will need to calculate their “fair market value” at the time of the donation.
]]>Many people occasionally sell items online through auction website like eBay or online classified ad services like Craigslist. These sales are the online equivalent of garage or yard sales. Usually, when you sell old personal use property (such as old clothing) online you incur a loss--that is, you get less than you paid for it. Losses on the sale of personal use property (such as clothing or personal use cars) are nondeductible personal losses. The IRS doesn't expect you to report these on your tax return. Nobody cares about them. An occasional seller who sells an item at a gain would have a taxable capital gain that is supposed to be reported to the IRS (see the discussion of collectors or investors below).
A hobby is an activity you engage in for a reason other than earning a profit--for example, you create art for enjoyment or collect matchbooks for fun. If you sell something created or acquired as a hobby online, the profit you earn is taxable income that is supposed to be reported on your tax return. Under prior law, hobbyists could claim as an itemized deduction their hobby-related expenses up to the amount of income the hobby earned during the year. However, the Tax Cuts and Jobs Act completely eliminates the itemized deduction for hobby expenses, along with many other miscellaneous itemized deductions, effective starting 2018 through 2025. This means that taxpayers will not be able to deduct any expenses they earn from hobbies during these years, but they still have to report and pay tax on any income they earn from a hobby. The deduction is scheduled to return in 2026. To learn more, see Nolo's article, Can You Deduct Your Expenses From a Hobby?
Unlike a hobbyist, an investor wants to earn a profit, but is not engaged in a full-fledged business. These people purchase property with a view to having it increase in value over time. For example, an investor coin collector purchases coins primarily to earn a profit by selling or trading them--not for enjoyment. When an investor sells an item at a gain, the amount is a taxable capital gain that must be reported on IRS Schedule D. Income tax must be paid on the profit at capital gains rates. Net capital gains from selling collectibles (such as coins or art) are taxed at a maximum 28% rate. If an investor sells a collectible at a loss, the loss is a capital loss that may be deducted from any capital gains realized during the year. If capital losses exceed capital gains for the year, a maximum of $3,000 of the loss may be deducted from other income with the remainder, if any, carried forward to future years.
If selling items online is your business, the same tax rules apply to you as for any other business. Online selling is a business if you regularly engage in it primarily to earn a profit. If you earn a profit in any three out of five years, your activity is presumed to be a business. You don't have to engage in online selling full-time for it to be a business, but you must work at it regularly.
When you have an online sales business, you may deduct all of your business expenses from your business income. You pay income tax on your profits at regular tax rates. If you incur a loss, you may deduct it from other income during the year. When you have a business, you must pay self-employment taxes (Social Security and Medicare taxes) as well as income taxes.
This article will discuss your rights with regard to the storage company and what you can do to forestall an auction and get your personal goods back.
The thought of losing one's possessions is heartbreaking and frightening. Many people use storage units to hold irreplaceable items, such as family heirlooms and original legal documents, in addition to clothing, furniture, and so on.
If, however, you haven’t paid your rent in the storage facility for a number of months, it is not uncommon for the facility to threaten to sell (or discard) your possessions, often via an auction. This is ordinarily legal, so long as the storage facility gives notice of your default (nonpayment) and follows other procedures laid out in its written contract with you.
You'll want to research your state's law for limitations on what a storage company can actually do. The law might, for example, mandate that the storage facility notify you via a particular method (such as mail or email) or provide public notice of the upcoming auction. It is also likely to require a number of weeks' waiting period between your default and any public auction, so as to give you time to pay off your debt and get your stuff back.
Now is also the time to review the fine print of your contract, starting with its definition of when you're in default. Expect to see something set between five and 30 days after payment was due. At the point of default, the contract might explain that you will be denied access to your storage unit altogether.
Although unlikely, there's a chance your contract violates the terms of your state's law, so contact a lawyer if you're seeing clauses that seem too egregious to be legal.
Storage facility auctions usually occur either on the site of the storage facility or in an off-site location. Public notice of the auction is given, and third-party consumers can attend and purchase your items. Indeed, many consumers pay special attention to announcements of these types of sales, since they can buy goods at relatively low prices.
The specific procedure for how your company would conduct this type of sale will depend largely on state law and the fine print of your rental agreement. Most likely, the agreement specifies exactly what the storage facility can do and when. You will likely get a letter notifying you of the company's intentions well before the actual sale. A 30-day notice provision would be typical.
If you receive such a letter, remember that selling all of your possessions is not the company’s first choice; it would much rather receive payment for the storage unit. Selling your possessions requires work (though they often sell the whole contents of a storage unit at once, rather than going piece by piece). It is far easier for it to simply collect rent from tenants, which is precisely why it is sending you the frightening letter in the first place. It wants you to pay.
Thus, if at all possible, you should quickly respond to the letter with full payment. If you are unable to pay the full amount due, don’t despair. There’s a decent chance that the storage company would accept a partial payment, or a payment plan, in lieu of full payment.
For example, imagine that you owe $300. See if you can get a manager on the phone, and make an offer to pay $100 immediately, followed by payments of $50 over the next four months. The immediate payment gives the company confidence that you are not a deadbeat, while the longer-term payment plan gives you a chance to get your finances in order. This sort of approach will generally prevent the storage company from putting any of your personal items on sale.
]]>Before running to the company, make sure that you yourself did not attract the rats, for example by storing food or sweets in your unit. Most likely, your rental agreement has a term that would prohibit you from keeping any such items in the facility.
Next, you should immediately contact your storage facility company. The company might not be aware of the rodent problem, and it should quickly call an exterminator to mitigate the infestation and damage.
The fine print of your rental agreement might indicate that the facility is not liable for any damage to your property beyond the company’s control; for example, damage done by a fire or an earthquake. But you'd have a strong argument that an infestation of rodents is within its control, and that the facility was negligent by failing to set rodent traps or conduct routine inspections.
Or, the facility might indicate that you could or should have bought storage insurance to cover your possessions. You could likely point out, though, that rats and vermin are commonly excluded from such insurance coverage.
Ultimately, any decent business would offer to evaluate any damage to your belongings. If there is actual physical damage, it should pay. If it doesn't, you would be within your rights to write a letter (or have an attorney write a letter) asking for compensation. Remember, storage facilities are in competition for business, and fear bad word of mouth.
Rent abatement for the month when you saw the rodents would be a reasonable amount of compensation. Therefore, it is in the company’s best interest to address the situation and attempt to make you whole, especially if it could do this with just a few hundred dollars.
If you own a home, you might take a look at your homeowners' policy to see whether it covers property kept in a storage unit. Homeowner's policies commonly provide some coverage for off-site personal possessions. However, the compensation it would provide is likely to be a small fraction of the items' value. And again, policy exclusions for rodents and such might cancel out any hope of getting reimbursement.
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