USA Buying locally with cash

[Baconbreak]

Hello,

I have a question about buying items locally from people on craigslist and reselling them to other dealers and getting paid by check. Most people on craigslist only accept cash as a form of payment and are skeptical in providing a bill of sale due to all of the scams going around with personal information.

I will take these items to dealers and they will pay me in the form of a check or bank wire transfer. How can I prove to the IRS what I paid for each item? Do you have any advice on how I should do this?

Much appreciated.

 

[AGH the CPA]

write up your own receipt and have the people sign it when you give them cash.

ie.

Date
August 4, 2017

Sold
1 writing desk $100

Signed



-----------------------------------------
person selling it signs here

Keep it simple and people will be more willing to do it.

I would then also attach a copy of the craigslist ad or whatever notice you used to find out about the item.

 

[Baconbreak]

write up your own receipt and have the people sign it when you give them cash.

ie.

Date
August 4, 2017

Sold
1 writing desk $100

Signed



-----------------------------------------
person selling it signs here

Keep it simple and people will be more willing to do it.

I would then also attach a copy of the craigslist ad or whatever notice you used to find out about the item.

Hi,

I can type out a simple bill of sale but will I need the sellers ID to make this receipt valid? Should my info be on the receipt or not required for taxes?

Thanks!

 

[AGH the CPA]

If you are buying from Craigslist, 9 time out of 10, the seller is NOT going to have a "sellers' id. (unless you mean their drivers license?) I wouldnt give some random person a copy of my drivers license either. I think you're fine if you have a copy of the listing, the contact details for the person and a receipt. The other stuff would be nice but not necessary. YOUR info doesnt need to be on there but you can certain;y put your details in the SOLD TO area.

 

[Baconbreak]

If you are buying from Craigslist, 9 time out of 10, the seller is NOT going to have a "sellers' id. (unless you mean their drivers license?) I wouldnt give some random person a copy of my drivers license either. I think you're fine if you have a copy of the listing, the contact details for the person and a receipt. The other stuff would be nice but not necessary. YOUR info doesnt need to be on there but you can certain;y put your details in the SOLD TO area.

Thanks for getting back to me. My last question would be what I should put on the receipt, does the seller need to sign it for it to be valid? Or can I just put the item info/serial #, price paid, date/time, place of sale, sellers info? What if they don't wanna give me their name?

 

[AGH the CPA]

seller does not need to sign it to be valid.

Why wouldnt they give you their name? I would worry I was buying stolen property if they are not willing to just give you their name??