Can a PayPal 1099-K, for garage sale type items in MA, be reported (how and where to make the entry) without getting into the self-employment schedule C?

[MichaelDC · Accepted solution]

It is not taxable.  You can use the cost of the clothes as a deduction and you will have no net income to pay taxes on. If the IRS questions it, then show them your documentation. Print out or screenshot from Paypal something showing that what you sold was used personal items.

Do it this way, it will zero out and not be taxed: Enter it under Wages & Income, Your 2017 Income Summary, scroll down click on Start next to Miscellaneous Income, then choose Other reportable income, answer Yes to "Any Other Taxable Income?" Under Description put "Sales of Personal Property 1099-K" and enter the amount from the 1099-K in the next box, click continue, click on "add another income item", Under Description put "Cost of Personal Property 1099-K" and enter the same amount as a negative. On the Other Miscellaneous Income Summary make sure you see the 2 items, one positive and one negative and Total is $0.

from TurboTaxCathi

[robby_d1]

Turbo tax will not allow me to enter a Negative number. Any advise

[PattiF]

Here is a way to enter the sale of household goods that were sold at a loss:

• From the left menu, go to Federal and select the first tab, Wages & Income
• Add more income by scrolling down to the last option, Less Common Income, and Show more
• Scroll down to the last option, Miscellaneous Income, 1099-A, 1099-C and Start
• Choose the last option, Other reportable income and Start and Yes
• Enter the applicable description and amount and Continue
  • First, enter Form 1099-K as received. It is essential that the full amount be entered.
  • Next, enter an adjustment to reflect the cost of these items as an offsetting, negative amount. You do not need to enter a negative number. Just the cost of the goods that were sold.