You may elect to remove the IRS form 1099-K entry.
Then you would report the IRS form 1099-B entries to report the personal sales.
The IRS may or may not request information about the IRS form 1099-K that was issued.
You would retain a full accounting of the income and costs of the personal sales should a tax authority have a question at a later time.
Personal items sold for less than their cost basis report $0 capital gain on line 7 of the Federal 1040 tax return.
Personal items sold for more than their cost basis report the gain on line 7 of the Federal 1040 tax return. See this example.
Selling Cost
Price Basis
Item 1 $500 $2,000 Capital loss on personal item = $0 loss
Item 2 $400 $300 Capital gain on personal item = $100 gain
Item 3 $100 $100 No capital gain or loss
$1,000 $2,400
In TurboTax Online, to report such a sale of personal items, follow these directions.
- Down the left side of the screen, click Federal.
- Down the left side of the screen, click Wages & Income.
- Click on the down arrow to the right of Investments and Savings.
- Click to the right of Stocks, Cryptocurrency, Mutual Funds, Bonds, Other.
- Click Add investments.
- At the screen Let's import your tax info, select enter a different way.
- At the screen OK, let's start with one investment type, select Other, Land, Second homes, Personal items.
See IRS Publication 525, page 36 under Sale of personal items.
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