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Deductions & credits
Yes, you can follow my Option 2 for reporting Form 1099-K from PayPal particularly for used goods, such as you would sell in a garage sale.
However, if the items sold were original creations, then you must determine if it is either a hobby or a business.
- Hobbies report all income and are not allowed to deduct expenses. This is a change in the tax law and will be in effect from 2018-2025.
- Business activity is captured in the self-employed income & expenses. If there are losses more than 2 out of the last 5 years, the IRS may reclassify the business as a hobby and disallow the expenses.
‎February 7, 2021
10:30 AM