1099-K - How to enter gains

[ian312]

How do I enter this situation in Turbo Tax?

Let's say I got a 1099-K for $10,000 in Gross Proceeds. I sold 250 items on ebay. 220 of those items were sold at a loss and the Gross Proceeds for those 220 items was $9,000. For the other 30 items, I sold each at a small profit and the Gross Proceeds associated with those 30 items was $1,000.

I entered my 1099-K on Turbo Tax and selected that some of the items were sold for no gain or a loss and entered $9,000 as the proceeds associated with no gains/loss.

At this point, when I go to work on my specific entries on the 1099-K in the investment section, do I need to enter 250 separate items or do I need to account for only the 30 items of gain or do I need to account for the 30 items of gain and then create 1 single items representing the loss on the other 220 items? The instructions in Turbo Tax are not clear. 

Please advise

[PatriciaV]

No, you don't need to add a line for each of the 30 items that were sold for a gain. You can enter the related totals for these items as the proceeds and the amount paid (cost).

To summarize:

The 1099-K entry for personal items reports the amount on the 1099-K, then adjusts that number to the actual remaining gain. The transaction you edit under Investments reports how much of the remaining proceeds is income from gains.

[ian312]

My question is whether I have to enter each transaction separately. Do I need to enter 250 items? 30 items? Etc

[DianeW777]

No. Separate loss transactions and gain transactions.  Keep your 1099-K in your tax files and do not enter it. Use the instructions below to enter your sales. Two summary sales as shown:

1. If any of the items sold at a loss is for personal use items such as from your home, a loss cannot offset other income. For these items you would have the same cost and selling price.
2. For any personal use items sold at a gain, this is required to be reported and any gain taxable. It will be added to your other taxable income.

To enter your sale in TurboTax, follow these steps. Click this link for more information. Where do I enter Investment Sales?

1. Open or continue your return.
2. Navigate to the investment sales section:
   • TurboTax Online/Mobile: Go to investment sales. If using this application, make sure it is open
   • TurboTax Desktop: Search for investment sales and then select the Jump to link. 
     • Or Personal Tab > Continue > I'll choose what I work on > Scroll to Investment Income > Select Stocks, Cryptocurrency, Mutual Funds, Bonds, Other
3. Answer Yes to the question Did you sell any of these investments in 2024? (or Okay! to Time to kickoff your investments!).
   • If you land on  the Investment sales summary or Your investments and savings screen, select Add More Sales or Add investments.

@ian312 

[ian312]

Hi - I am not following the explanation. I am very familiar with the tax law rules for the 1099-K. However, my question is more about how to reflect the correct application of the tax law in Turbo Tax.

Do I need to record all 250 sales on the appropriate schedule? If so, I would have to enter in 250 combinations of proceeds, descriptions, cost basis etc. Is this what I need to do or do I only focus on entering the 30 gains because TurboTax will create a line item for me on the return of the 220 loss transactions or are you saying I enter in 2 total transactions ,1 represents aggregate gains, 1 aggregate losses? I am fully aware I cannot deduct the losses from my gains for personal income and that I will pay income tax only on the gain items. 

Turbo Tax UI and Instructions are fairly poor on 1099-K and need to be significantly improved especially if congress moves forward with keeping the $600 threshold after this transitional $2500 year.

[DianeW777]

Focus on entering as you noted below. It's clear that there needs to be some changes on the reporting rules for 1099-Ks and maybe we will see that in the future. The key is for you to keep track of your transactions they way you have already started doing based on your details.

• Enter in 2 total transactions ,1 represents aggregate gains, 1 aggregate losses
• You will pay tax only on the gain transactions

@ian312 

[ian312]

I am still struggling with this. I received an ebay 1099-K for selling 250 items. Each item has a different purchase date and sale date. Are your saying I should just pick a date as the purchase date and pick a random date as the sale date and enter into my total cost of the loss items and total proceeds on the loss items and then do this a second time for the gain items in aggregate? That does not seem like the right thing to do but the turbo tax user interface and instructions are horrible on how to handle this situation.

Now, enter one sale for eBay Commerce Inc.

If you received a 1099 form for this other investment sale, you should enter that information here. If you did not receive a 1099 form, enter the info as required.

What type of investment did you sell? Learn more

— Select —Employee stock purchase plan (ESPP)Nonqualified stock options (NQSO)Incentive stock options (ISO)Restricted stock units (RSU)Restricted stock awards (RS)Stock (non-employee)CryptocurrencyMutual fund, index fund, or ETFBondOptionsSecond homeLand (personal use)Land (other investment purpose)CollectiblePersonal itemsOther

How did you receive this investment? Learn more

— Select —I purchased itI inherited itI received it in a divorce settlementI received it as a giftSomething else

Description Learn more

Example: 20 shares of XYZ company

When did you receive this investment?

On one date Learn more

Something other than a date Learn more

Date sold or disposed Learn more

Proceeds Learn more

Total amount paid Learn more

[JamesG1 · Accepted solution]

Perhaps this will be helpful.

You are reporting IRS form 1099-K and reporting personal sales.  

Box 1a is $10,000.  Box 1a is broken down as $1,000 for 30 items sold at a profit and as $9,000 for 220 items sold at a loss.

You may enter the 30 items individually and the total of the Proceeds entered would equal $1,000.  Or you may enter one entry using short-term basis and a second entry using long-term basis.  The total of the Proceeds entered would equal $1,000.  In either case, the detail of the 30 items sold should be retained on a spreadsheet should a tax authority have a question about the transactions at a later time.

In TurboTax Premium Online, report Personal item sales by following these steps.

• Down the left side of the screen, click Federal.
• Down the left side of the screen, click Wages & Income.
• Scroll down to Other Common Income click on the dropdown menu.
• Click to the right of Form 1099-K.
• At the screen Did you get a 1099-K?, select Yes.
• At the screen How would you like to upload your 1099-K? click Type it in myself. 
• At the screen Which type of income is your 1099-K for, select the button for Personal item sales.  Click Continue.
• At the screen Let's get the info from your 1099-K, enter the information.  
• In Box 1a enter $10,000.    
• Click Continue.
• At the screen Personal Item Sales, you are told that further information will need to be entered.
• Because $9,000 of the selling price will not be reported, enter $9,000 under I sold some items at a loss or had no gain. 
• Click Continue.
• At the screen Your 1099-K summary, notice that the income relates to ‘Personal Items’.  Click Done.
• At the screen Your income and expenses, scroll down to Investments and Savings (1099-B, 1099-K….).  Click Add / Edit to the right.
• At this screen, you will be asked to Review the Personal item sales (1099-K).  Select Review.
• At the screen Now, enter one sale…., answer questions about the personal item sale.
• Enter Personal items.
• Enter I purchased it.
• Enter Description of the first of the 30 items.
• Enter the dates of purchase and sale.
• Enter Proceeds.  If you enter each of the 30 items, the total of the 30 items will be $1,000
• Enter Total amount paid, enter your cost basis.  
• Click Continue.
• At the screen, Let us know if any of these situations apply to this sale, sales expenses may be recorded.
• Click Continue.
• Click Add another sale to add additional sales entries.

The entry will be reported:

• on Schedule D of the Federal 1040 tax return, and 
• on line 7 of the Federal 1040 tax return.

The amount reported to you on Form 1099-K that was included in error or for personal items sold at a loss is reported at the top of Schedule 1 Additional Income and Adjustments to Income.

[ian312]

Very helpful explanation. Thank you!