Depreciated Cost

eBay has built a successful business based on people selling used items, seeking to gain maximum dollar throughput in open auction around the world from buyers who are willing to shell out the cash. The IRS recognizes that certain items are subject to repeated wear and tear in order to conduct business, such as cars, computers, office equipment, heavy vehicles, tools. etc., and allows businesses to take depreciation over the usable life of the item as a legitimate tax deduction within guidelines.

Ironically, one seeks to reduce the listed value of used items to get the tax deduction—the exact opposite goal of eBay.

The depreciated cost is calculated as the purchase price minus the cumulative depreciation at the time. Depending on the asset class of the item being depreciated, the IRS may allow one to depreciate on their books for as much as 5-10 years.