shalls7
New Member

Do you have to enter a 1099K from PayPal if it is resale of clothing with no profit?

 

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Yes. Unless you account for Costs of sales via Schedule C, IRS can presume amount on 1099K is all taxable profit.

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shalls7
New Member

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Thank you. So I just need to fill out costs of products on a schedule C?  Do I put each individual item or total of all?

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You only have to enter the total cost of items sold. You can add in your shipping costs. If the 1099K amount equals your costs, net result is zero, and no taxes due.
shalls7
New Member

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I paid more for these children Boutique clothing than what I was able to sell them for on Facebook. So I will need to list the amount I paid plus fees plus shipping?  If I do this then I will deduct more than what I made through PayPal.  Is that correct?

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If you were Not in business to make a profit, you can not take a loss, so costs can't exceed money in.
You May be able to just not report the 1099K at all, but since you're asking from the Self-Employed edition, it's an included feature which will preclude IRS assuming you had unreported taxable income.
shalls7
New Member

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Thank you so much for all your help. I just wanted to make sure I did it correctly. As long as I made no profit, then I don't need to file it?  I can go back to regular turbotax version if I don't have to report this 1099K. I am not in business selling items. These transactions are only for selling my children's clothing to recoup funds that I had spent but not for a profit.

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Selling personal use items at a loss does not require reporting.

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Can someone please confirm, if I personal items at a loss, but live in MA and received a 1099K as my total was over $600, do I need to report the info on the 1099k?

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I am in the same situation. Reselling clothing and other home items with no intention of profit. I am not a business, just a mom trying to get by. I did get 1099K from Paypal. I found many receipts but not all as some of the sold items are very old. The receipts I found, plus ebay, paypal fees and always free shipping put me at a loss not gain. I have it all calculated on paper and saved these materials in the folder. I went through a lot of hassle collecting this evidence. One question as the person before me asked... If I am not a business, reselling my own pre-owned items for NO profit and I am at a loss, WHAT turbo tax product shall I use and do I actually need to report that 1099K? If I ever get audited, I will have proof of loss. Thank you.

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I am in the same boat. However some things we sold this year to get by were jewelry and coins purchased nearly 10 years ago and inherited. It's a nightmare. I've tried separating the transactions into household items and gold/coins which apparently are subject to some capital gains nonsense? Anyway, I had to go by what we think we paid for the items since I have no receipts and subtracted the cost sold from the cost paid, zeroing out where there was a loss (killing me.... sold an ipod at a $100 loss but have to claim a $5 gain on an action figure??!!!) and then deducted paypal, ebay and shipping fees. It's tedious but the only paper trail I can create. I still trying to figure out the gold as I sold it as scrap. It's awful. We're finally poor enough to qualify for the EIC and this happens...... but I need that refund money so a definite answer on this mess MA got us all in is appreciated.