This can be handled in TurboTax by reporting Form 1099-K in Wages & Income under Miscellaneous Income, 1099-A, 1099-C. This is the location to also report the appropriate reductions.
To do this in TurboTax, follow these steps:
- From the left menu, go to Federal and select the first tab, Wages & Income
- Add more income by scrolling down to the last option, Less Common Income, and Show more
- Scroll down to the last option, Miscellaneous Income, 1099-A, 1099-C and Start
- Choose the last option, Other reportable income and Start and Yes
- Enter the applicable description and amount and Continue
- First, enter Form 1099-K as received. It is essential that the full amount be entered.
- Next, you can enter in each adjustment separately for your gambling winnings, eBay sales and each of your other adjustments as negative amounts. This will effectively reduce Form 1099-K and satisfy the IRS that Form 1099-K was reported as received.
- At Other Miscellaneous Income Summary, on the left side below the list, click + Add Another Income Item
