The person who issued the 1099-K is in business and must report their transaction. Now that you have it, you have options:
- Ignore it, wait for an IRS letter and respond with your letter saying you sold stuff around your house during COVID. No harm, no foul.
- You can file it and pay taxes on the income
- You can decide to get creative in filing the income and subtracting the basis; but it won't fly as well. You will probably still get a letter and have explaining to do.
See Instructions for Form 1099-K, Payment Card and Third Party Network Transactions
A payment settlement entity (PSE) must file Form 1099-K, Payment Card and Third Party Network Transactions, for payments made in settlement of reportable payment transactions for each calendar year.
@tmundy
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