Turbotax 2022 premier file 1099K from PayPal

[Sission]

I received a 1099K from PayPal. I sold some personal items on PayPal last year, which is around 4K.  I am confused about how to report them and hope I can get some help here.

I purchased Turbotax 2022 premier desktop version. I found that in the 1099-MISC and Other Common Income, I can report my 1099K. However, it seems like I have to manually add a corresponding negative amount in Investment Income as 1099-B (which I did not receive). And in the Form 1040, this income becomes a short-term Capital Gains and Losses in Schedule D.

However, based on IRS instructions - https://www.irs.gov/businesses/understanding-your-form-1099-k

Such "Personal items sold at a loss" should be reported in:

• Part I – Line 8z – Other Income – Form 1099-K Personal Item Sold at a Loss $700
• Part II – Line 24z – Other Adjustments - Form 1099-K Personal Item Sold at a Loss $700

So, is it fine to report 1099K as an investment income? I know there are some differences between the desktop version and the online version. I have also tried to report the 1099K amount under Less Common Income - Miscellaneous Income, 1099-A, 1099-C. In exported PDF,  it is also not shown in 8z and 24z but in 

Schedule 1: Additional Income and Adjustments to Income

Anyone know how to do it right?

[DianeW777]

Yes, if you had a cost for the items you sold, you would report that in the 'Investment Sales' section.  Do not select Form 1099-B as the type of entry. Instead select 'Other' sales. The information here assumes you are not in the business of buying and selling or doing it for a hobby.  

NOTE: One personal item or a group of personal items sold in one transaction at a gain requires the gain to be taxed. 

One personal item or a group of personal items in one transaction sold at a loss, the loss is suspended and not allowed to reduce or offset other income, even the gain on personal items sold in a different transaction.

• Search (upper right) > type schedule d > use the Jump to... link select 'Review' on Personal items sale (Form 1099-K) > follow the prompts to complete the cost entry
• See the image below.

@Sission

[Edited: 01/20/2023 | 1:39p PST]

[Sission]

Thanks! However, as I mentioned before, I used the desktop version. There is no such option. See below:

If I choose "Income from Form 1099-K" in this section, the "Smark Check" will report an error and ask me to input information to generate a 1099-B in section "Investment Income"

[DianeW777 · Accepted solution]

In that situation and assuming you meet the rules for the sale of personal items, I would enter the proceeds and the cost in the investment section of TurboTax Desktop version.  In other words I would eliminate the 1099-K entry by deleting it.  Keep the document, as well as information about your sale, in your file should you need it later.

Make sure you enter each specific transaction separately to account for the correct gain or loss.

• Search (upper right) > type schedule d > use the Jump to... link select 'Add more sales' > Select 'No' you did not get a 1099-B
• See the image below.