No, to address your reply to Mindy, "So even though 10 of the 30 items were sold at a "gain", I'm still ok to just select "all items sold at a loss" and move on?"
No, you can't.
Businesses can counter gain with loss.
Investors can counter gain with loss.
People selling personal items cannot counter gain with loss.
People must claim gain on sales of personal items, but loss of personal items cannot be claimed, and they also cannot be used to offset gains of any kind.
If I have a garage sale and sell stuff that cost me $1,000.00 for $500.00, but one thing I bought for $2.00 became a collector's item and someone paid me $300 dollar for it, I would need to claim $280 capital gain.
That's just the law.
If you are in the business of buying and selling, you can group the loss and subtract from gain. You would file Schedule C. You would pay Self-Employment tax. You might need to prove to the IRS that you have a business with the intend to earn a profit.
Additionally, if you invest, you can offset gain with loss because you are trying to earn a profit.
When people sell personal items, they are usually just getting rid of stuff. They might make a buck, but they don't usually make a profit. If, by chance, they do make a profit on something they sell, they report the profit as income.
Remember that profit is not the same as proceeds.
Your first post says "The 1099-k was for 6,700 BUT i actually lost 300 for the year. My COGS was 6,300." and that does not seem right. If you buy stuff for 6,300 and sell for 6,700, you would have at least a 400 gain.
I see that was changed to "So, even though my $6,700 1099-K total was a LOSS of 300.00, because i had a Gain on a few of them I have to pay tax on that? Please note: My COGS was 7k."
Because these were personal sales, you need to figure EACH SALE ONE AT A TIME.
If, let's say, you receive a 1099-K for 6,700, but 6,000 was for stuff you sold at a loss or you broke even, that would mean you received 700 in PROCEEDS for something you sold for a profit. (BUT 700 IS NOT PROFIT)
Let's say this was ONE thing that cost you 500, but sold at a profit for 700.
You would only have 200 reported as capital gain income.
HERE IS AN EVEN LONGER EXAMPLE-
This example is for a 2024 1099-K you receive in 2025.
Let’s use an example with “easy to follow” numbers.
You love clown dolls and purchase one everywhere you go.
You always pay $5.00 per doll.
After your doll collection reaches 100 dolls, you lose interest and decide to sell them.
You list some of the dolls online and sell 25 of them for $6.00 each. $1.00 is deducted for fees, so you are sent $5.00 for each sale $125.00 total. For the 25 dolls sold, you break even, no gain, no loss.
You list and sell 73 more dolls for $3.00 each. They each have a $1.00 selling fee, so you get $146.00 total. For these 73 dolls, you sold at a loss.
You have two dolls left that you think are special, one looks like Elvis and the other is an alien. You’ve had Elvis for years, the alien you just purchased in July of 2024.
You list the Elvis doll as an auction and people go nuts. Finally, the winner pays $1,000.00. Again, $1.00 is deducted. You are sent $999.00.
You also list the alien doll at auction, and it sells for $100.00. They take the $1.00 selling fee and send you $99.00
You buy a pizza to share with your friend and your friend sends you $10 for their half. There is no fee.
Your Uncle sends you $35 on your birthday. There is no fee charged.
You are not in the retail business, you do not make a living selling items online. You don’t buy things and sell them to make a profit. This was like having a garage sale.
Your 2024 Form 1099-K reports $1,414.00 (125 + 146 + 999 + 99 + 10 + 35 = 1414)
In TurboTax enter the 1099-K under:
Income
Other Common Income
Income from Form 1099-K START
On the “Did you get a 1099-K?” screen, select “Yes”
On the “Which type of income is your 1099-K for?” screen, select “Personal item sales” CONTINUE
Enter the 1099-K as it was reported and select the box for “This amount in box 1a is too high or includes some personal transactions” in order to enter the birthday gift and pizza money.
Enter $45.00 for the pizza and birthday transactions.
CONTINUE
On the next “Personal Item Sales” screen, make the correct selection.
In our example we choose “I sold some items at a loss or had no gain” because we made a profit on the Elvis and alien dolls.
Note: If all the items you sold were sold at a loss or just broke-even, you would select the other option, “All items were sold at a loss or had no gain” If ALL the items were sold and you did not realize a gain on any single item, you would not need to enter the sales.
Because we made the selection that “only some items had no gain”, we need to enter the amount representing the items that sold for no gain, no profit. We enter 271.00. How did I get that number? We broke even on the first 25 we sold and made $125.00, we had a loss on 73 dolls but still made $146.00, so we add those numbers together and get $271.00. We are saying that $271.00 doesn’t even count, since there was no profit in that amount.
CONTINUE
Finish the interview and select done on the “Your 1099-K summary” screen,
BUT YOU ARE NOT DONE
At this point we have told the program that we received $1414.00 on a 1099-K, that $45.00 were personal transactions and $271.00 was for selling personal items that did not result in a profit. That leaves $1,098.00 to account for.
$1,098.00 represents what was received for selling two dolls, but that was not all profit.
Now we need to tell the program how much profit we made.
Go back to:
Income
Investment Income
Stocks, Cryptocurrency, Mutual Funds, Bonds, Other click UPDATE
The next screen should show “Personal items sales (1099-K)”
Click REVIEW to open
The next screen has an input screen for the Personal items you sold at a profit/gain.
The two dolls we sold for a profit will be entered here, one sale at a time.
First we enter the Elvis doll.
It was purchased November 15, 2021, sold August 1, 2024.
Enter $999.000 for Proceeds ($1,000.00 – $1.00 fee)
Enter $5.00 for Total amount paid
Note: We select “None of these apply” for the “Let us know if any of these situations apply to this sale” screen. That is because the fee was taken out before the funds were sent. The 1099-K already accounted for the $1.00 selling fee that was charged per sale. The amount in box 1a was already reduced for the selling fees and only reflects what was actually sent. IF the fee was paid a different way and not reconciled on the 1099-K, you would enter the selling fee on this screen. The selling fee is per sale, so you cannot claim the selling fees on all the items, only for this one particular sale.
Next we enter the Alien doll.
As you can see on the “Review your sales” screen, we accounted for the $1,098.00 as we said we needed to do.
The gain is $1,088.00 since we received $1,098.00 for selling dolls that cost us $10.00.
$994.00 is long-term capital gain because we owned Elvis for more than a year before we sold it.
$94.00 is short-term capital gain because we owned the alien doll for less than a year before we sold it.
Capital gain is listed on your 1040 line 7.
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