Get your taxes done using TurboTax

(1) Establish a record or spreadsheet of what was sold and record a date of purchase as well as a purchase amount.  You may not be able to locate a receipt but this is the best record that could be put together at this time.

(2) Have ebay change the mailing address but it could already be too late.  Different states have taken different approaches to the IRS form 1099-K.  Hopefully, the state that was sent the form will not be contacting you but it is always possible.

Make sure that the paper records that you retain to back up your tax return can demonstrate that you had no connection with that state.  For instance, you may have a letter from an employer reporting that you move from state A to state B.  

The posting of IRS form 1099-K for personal item sales is a two-step process.  

• First, you post the IRS form 1099-K amount of box 1a.  
• Second, you post the IRS form 1099-B Proceeds  From Broker and Barter Exchange Transactions to report the sales proceeds and the cost of sales.

Make sure that the amount reported on the IRS form 1099-K box 1a equals the Proceeds reported for the multiple entries of IRS form 1099-B.

Capital loss for a personal item sale reports $0 capital gain on line 7 of the Federal 1040 tax return.

In TurboTax Online, to report Personal item sales, follow these directions.

• Down the left side of the screen, click Federal.
• Down the left side of the screen, click Wages & Income.
• Click the drop down arrow to the right of Other Common Income.
• 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.  Click Continue.
• At the screen Personal Item Sales, 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 the down arrow.
• To the right of Stocks, Cryptocurrency, Mutual Funds, Bonds, Other (1099-B), select Start/Revisit.
• At this screen, you will be asked to Review the Personal item sales (1099-K).  Click Review.
• At the screen Now, enter one sale…., answer questions about the personal item sale.  Click Continue.
• At the screen, Let us know if any of these situations apply to this sale, sales expenses may be recorded.
• Select Add another sale as needed.

The entry will be reported:

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

Capital loss for a personal item sale reports $0 capital gain on line 7 of the Federal 1040 tax return.