Here's how you can report your sales and account for the cost basis depending on whether they are personal sales or self-employment sales:
Assumptions:
- If you are selling items as a hobby, report them as personal sales.
- If you are running a business, report them as self-employment sales.
Personal Sales: Here's how to do it, using TurboTax Online Premium:
- Open your return in TurboTax.
- Search in magnifying glass at top right for "1099-K" and select the "Jump to" link.
- Follow the onscreen instructions to enter your 1099-K.
Important Point:
Each gain or loss from a personal item sale needs to be reported separately. If you lost money on a personal item, it can't cancel out any money you made on another personal item.
Self-Employment Sales: Here's how to do it, using TurboTax Online Premium:
- Open or continue your return.
- Go to Schedule C.
- Answer the questions about your business and its expenses until you get to the Here’s your info screen.
- If you’re returning to Schedule C, select Review or Edit next to your work and then answer the questions about your business.
- Select Add income for this work.
- On the Let's enter the income for your work screen, select Form 1099-K and Continue.
- Enter your 1099-K info.
- Enter your expenses, including the cost basis of items sold. For example, for the Nike coat, enter $70 as income and $50 as an expense.
- For losses, enter the sale of the Nike shoes as $50 income and $100 expense.
TurboTax will calculate your net profit or loss from your self-employment activities
Clarifications Needed:
- If you have multiple sales, ensure each sale is entered individually with its respective cost basis and proceeds.
Supporting Links:
