Deductions & credits

It seems to frustrate some.  Perhaps this explanation is helpful.

If you are reporting sales as Personal item sales, you will be reporting the entries on IRS Schedule D.

When you enter the sales information, you will want to click the button to report the loss on sale of a personal item.  Personal items sold for less than their basis (most likely, the original purchase price) report $0 capital gain on line 7 of the Federal 1040 tax return.

Personal items sold for more than their basis report the gain on line 7 of the Federal 1040 tax return.  See this example.

                       Selling           Cost

                       Price              Basis

T1                   $500              $1,000        Capital loss on personal item = $0 gain/loss

T2                   $400               $300          Capital gain on personal item = $100 gain

T3                   $100               $100          No capital gain or loss              = $0 gain/loss

                        $1,000           $1,400

To report Personal item sales, follow these directions.

• Down the left side of the screen, click Federal.
• Down the left side of the screen, click Wages & Income.
• Scroll down to Other Common Income click on the dropdown menu.
• Click to the right of Form 1099-K.
• At the screen Did you get a 1099-K?, select Yes.
• At the screen How would you like to upload your 1099-K? click Type it in myself. 
• At the screen Which type of income is your 1099-K for, select the button for Personal item sales.  Click Continue.
• At the screen Let's get the info from your 1099-K, enter the information.  
• Box 1a is $1,000 but items T1 and T3 total $600 and report $0 gain.    
• Click Continue.
• At the screen Personal Item Sales, you are told that further information will need to be entered.
• Because $600 of the selling price will not be reported, enter $600 under I sold some items at a loss or had no gain. 
• Learn More provides detailed information for the next steps.  Click Continue.
• At the screen Your 1099-K summary, notice that the income relates to ‘Personal Items’.  Click Done.
• At the screen Your income and expenses, scroll down to Investments and Savings (1099-B, 1099-K….).  Click Add / Edit to the right.
• At this screen, you will be asked to Review the Personal item sales (1099-K).  Select Review.
• At the screen Now, enter one sale…., answer questions about the personal item sale.  
• Because you are only reporting the gain transaction, report  $400 as Proceeds and $300 as Total amount paid.
• Click Continue.
• At the screen, Let us know if any of these situations apply to this sale, sales expenses may be recorded.

The entry will be reported:

• on Schedule D of the Federal 1040 tax return, and 
• on line 7 of the Federal 1040 tax return.

Capital loss for a personal item sale reports $0 capital gain on line 7 of the Federal 1040 tax return.

@LaurieB17