Is income from Garage Sales taxable ?

[larryfrederickea]

Dealing with the IRS if furnishings sold with a Vacation Rental is garage sale income.  They're saying that the furnishings cannot be added to the basis of the property,  I want to deduct the income from the sale of the furnishings from the Gross Sales Price,  and the IRS said it would be considered income from a garage sale,  and would go under other income.  Any thoughts ?  Thanks

[clr600]

How were the furnishings acquired.

[qbteachmt]

"cannot be added to the basis of the property"

How was this property (the furnishings) being treated for the tax filings? It would have been separate from the Real Estate all along, of course. So, in this regard, the IRS is right.

[Just-Lisa-Now-]

were they depreciated separately from the dwelling while it was a rental?
were they sold separately from the dwelling?

[George4Tacks]

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[TaxGuyBill]

I'm not quite sure what your actual question is, but rental furnishings that are sold go on Form 4797.

If the  furnishings were used as a deduction (either because they are $200 or less or because they fell under the De Minimis election to deduct them), it would be Ordinary Income in Part 2.  If they were depreciated, they would be reported in Part 1 or 3, and you have depreciation recapture.