No. Only the gain on the sale of the DVDs will be taxable. So if your DVD collection cost more than you sold it for, you will not have any taxable gain.
Because you received a 1099-MISC, the IRS will also have received a copy. Therefore you will need to report this 1099-MISC on your 1040. However, you can also report a negative amount under miscellaneous income related to the cost of these DVD to offset this 1099-MISC income. Make sure that the negative basis amount being reported does NOT exceed the income reported on the 1099-MISC.
Here is how to enter both the 1099-MISC and the negative amount for the basis information as other
miscellaneous income
To enter the 1099-MISC as miscellaneous income in
TurboTax Online or Desktop, please follow these steps:
- Once you are in your tax
return, click on the “Federal Taxes” tab ("Personal" tab in
TurboTax Home & Business)
- Next click on “Wages &
Income” ("Personal Income" in TurboTax Home & Business)
- Next click on add more income
“I’ll choose what I work on” (jump to full list)
- Scroll down the screen until
to come to the section “1099-MISC and Other Common Income”
- Choose “Income from Form
1099-MISC” and select “start’
- Enter your 1099-MISC
information
- Click through the screen for work description (do not
associate this 1099-MISC with all work listed)
- Does
one of these uncommon situations apply? - None of these apply
- Did
the involve work that's like XXXX main job? - No
- How
often did (you) get income for ? Just leave as 2016 only (even if you
received a similar payment in a prior year, select 2016 only)
- Did
the involve an intent to earn money? No
Now your income will
be reported on line 21 on your 1040.
To enter the negative amount for the original cost of the DVD (but only up to the amount of income being reported on your 1099-MISC,
- Click
on the “Federal Taxes” tab ("Personal" tab in TurboTax Home &
Business)
- Next click on “Wages and
Income”
- Next click on "jump to
full list" or “I’ll choose what I work on”
- Scroll down the screen until
to come to the section “Less Common Income”
- Choose "show more",
then Miscellaneous Income
- Choose "Other
Reportable Income" and enter
this information here under other taxable income
- You can title it "basis cost related to 1099-MISC income".
