Enter your 1099-K and then enter a negative transaction for the expenses of the sale.
For reporting personal property sold and also including the offsetting cost, 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.
- For a description, include Form 1099-K and Personal Property Sales.
- Next, enter an adjustment to reflect the cost of these items as an offsetting, negative amount up to the amount of the income.
- For the cost description, include Cost of Personal Property
- 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.
You need to keep records of the cost of the item, the amount that you sold it for, and the costs of the sale. Keep those records with your other tax records in case you ever have to explain how you came up with the amounts that you deducted as negative entries.
