Since the 1099-K is reported under her social security number, then it has to be included on her tax return. However, since it is not income (I'm assuming these were sales of personal items), you then have to subtract that amount from her return. By doing this, these amounts will net out to zero and there will be no tax effect to her. She cannot deduct a loss from selling personal items.
To report and offset the cost, please follow these steps:
- From the left menu, go to Federal.
- Scroll 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.
@cspyon
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