HOW DO YOU DETERMINE THE COST OF SOLD IOTEMS

There can be several different methods for determining the cost basis of an item and it would depend on how you received the item. 

• For an item that you originally purchased, your cost basis is what you originally paid for it.  Hopefully, you have a receipt for this purchase.
• If the item was given to you then the basis is what the person who gave it to you paid for it. This basis would need to come from the individual who gave you the item.
• If the item is inherited, then the basis is the fair market value of the item on the date it was inherited.  You would need to make a good faith effort to ascertain what this fair market value is.