KathrynG3
Expert Alumni

Get your taxes done using TurboTax

You do not need to start a Schedule C as if this was self-employed income without a trade or business. But, you cannot report a loss, either. The maximum you can deduct from the proceeds is the amount of the proceeds. 

 

In TurboTax Deluxe or higher: reporting it via Other Miscellaneous Income is acceptable to the IRS.

  1. From the left menu, go to Federal and select the first tab, Wages & Income
  2. Add more income by scrolling down to the last option, Less Common Income, and Show more
  3. Scroll down to the last option, Miscellaneous Income, 1099-A, 1099-C and Start
  4. Choose the last option, Other reportable income and Start and Yes
  5. 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, enter an adjustment to reflect the cost of these items as an offsetting, as a negative amount up to the amount of the income. In other words, if the goods cost you $100 and Form 1099-K was for $10 in sales, the maximum cost allowable would be $10.