Deductions & credits

Income received on Form 1099-K has been reported to the IRS at the same time you received your Form 1099-K. The income must still be declared. The IRS expects all income, regardless of payment method, to be included on your tax return.

However, this income can be offset by the expense to purchase the items up to the amount you earned. In other words, if you bought something for $100 and sold it for $10, the IRS would allow the expense for this item to be $10.  

Since you are not earning in a business capacity, and to offset the income with the allowable expense, there are two options. 

Option 1 (TurboTax Premier or higher):

1. Go to the search box and enter Investment Sales
2. Select Jump to Investment Sales
3. Select Other at the next screen, OK, what type of investments did you sell? and click Continue
4. At Tell us more about this sale, enter in the name, such as Form 1099-K eBay and the Payer's EIN and click Continue
5. At Now we'll walk you through entering your sale details, under the first dropdown menu, What type of investment did you sell? Select Personal Items
6. Answer How did you receive this investment with an option from the dropdown menu.
7. Enter the Description. If you are uncertain what date you purchased the goods, select Something other than a date so that TurboTax will enter Various
8. Next, enter your Sale Proceeds and an equal amount for the Total Amount Paid and click Continue
9. Select None of these apply at Let us know if any of these situations apply to this sale and Continue
10. Continue through the rest of the prompts 
11. Select Add another sale to add the next Form received 

Option 2 (all TurboTax levels):

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
   1. First, enter Form 1099-K as received. It is essential that the full amount be entered.
   2. 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.

Please see this help article for more information: What is Form 1099-K?

[Edited 01/30/2021 |5:57 AM PST]

@kartheeksrm