How Do I Split the Single 1099-K Between Business & Personal?

[CombatWombat]

I sell on ebay under a single account with my own SS. This last year I sold off a bunch of items I inherited in addition to my regular "business" sales.

My single 1099-K covers everything. I file my taxes under my SS using T-Tax Home & Business. I have it all tracked but if I put the personal stuff into the business side it completely screws up my inventory and sales numbers.

I have searched high and low and cannot find any answers about how to input the numbers into the 2 very separate sections of the tax return.

[Cynthiad66]

If you receive an Form 1099-K for income that is not taxable income, the IRS provides information on how to report this amount. You can report the amount in Part 1, Line 8z, Other Income of Schedule 1, Addition Income and Adjustments to Income and also report the the non-taxable amount in Part 2, Line 24z, Other Adjustments of the same form. This process adds an amount to your income and then subtracts an amount from your income while at the same time accounting for the amount shown on the 1099-K on your tax return so that it matches the IRS records.

Click HERE for addition reporting information.

[CombatWombat]

Still not finding clarity. Using Home & Business.

I have a single 1099-k from ebay. I have just an SS, no EIN. I sold personal items, I sold silver coins eligible for deductions as investments and I sold items in a retail business classification.

The instructions in TTax are as follows:

If you have income from multiple sources or businesses on one Form 1099-K, you’ll need to enter info from this form more than once.

How to enter income from your 1099-K:

1. Choose one business or type of work on your 1099-K
2. Enter all transactions related to that business or work
3. Continue to the Your 1099-K summary screen. The work or transactions you just entered will be listed there
4. Then select Add a 1099-K. You can enter another type of work. Keep doing this until you have entered all the income on your 1099-K

Am I supposed to input 3 separate entries with the proportional amount that totals up to the amount in box 1a?

[AliciaP1]

Yes, but it's actually 2 entries.  You are not required to enter the 1099-K details specifically.  You just need to ensure you have reported all the income that is reflected on the 1099-K.  

To report the personal item and coin sales you can follow these steps in TurboTax Home & Business:

1. Search for 1099-K and select the Jump to link at the top of the search results
2. When you get to the Choose which type of income your 1099-K is for screen select Personal item sales and Continue
3. For box 1a only enter the amount you received for your non-retail business sales
4. Click Done
5. Go back to the Wages & Income screen and click Edit for Investments and Savings (1099-B, 1099-INT, 1099-DIV, 1099-K, Crypto)
6. Click Review for the 1099-K you entered and here you can enter the expenses and details for the items you sold

To enter your retail business income you can follow these steps in TurboTax Home & Business:

1. Search for self employed income (use this exact phrase, don't add a hyphen) and select the Jump to link at the top of the search results
2. Answer Yes on the Did you have any self-employment income or expenses? screen
   • If you land on the Your 2022 self-employed work summary page, select Review next to the work you're adding income for
3. Answer the questions on the following screens until you arrive at Let's enter the income for your work
4. Scroll down to the Income section and click Add income for this work
5. Choose Other self-employed income and Continue

See What self-employed expenses can I deduct? to get all the business deductions you can take.

@CombatWombat 

[CombatWombat]

There is no "Edit for Investments and Savings" section.

It is "Investment Income" and has no provision for 1099-k

It has ONLY 1099-b.

[CombatWombat]

And, there is no self employed income section in personal. I am using Home & Business.

[DianeW777]

Let's review.  If I understand you have sales of inherited property, personal items (other than inherited) and business income.  All of the income will be reported on your tax return but not all of it will or should be entered under the 1099-K entry in your situation.

• Long term gains, defined as those held for longer than one year, generally have more advantageous tax characteristics than short-term gains, which are held for one year or less.

Business Income:

The business income must be entered under the Business section of your tax return.  Once you are on the Business section add the business portion of the income from your 1099-K in your self employment activity. 

TurboTax Desktop (H&B):

• Business Tab > Business Income and Expenses > I'll choose what I work on > Update beside Profit or Loss from Business > Edit beside your business > Update beside Business Income
• Select Update or Start beside General Business Income > enter the business amount only from your 1099-K.  Do NOT enter that amount in any other section.

Inherited Items: Enter under Investment Income and not 1099-K field

• Personal Tab > Personal Income > I'll choose what I work on > Stocks, Mutual Funds, Bonds, Other > Update or Start > Edit beside your sale or Add More Sales > You can choose one sale at a time or a summary of your sales of inherited items.  
• A gain or loss is allowed on the sale of these items because they were inherited.  Inherited property is always considered to be held long term so you can use 'Various' as the acquired date, then select a Holding Period of Long Term > Enter the date of sale or 12/31/2022 if you use one summary total of only the inherited sales portion of the 1099-K.  
• Otherwise enter the actual sale date for each sale.
• Your cost will be the value on the date of death of the person you inherited the items from.  If it is close to the sale date then your cost could be similar to the selling price.

Personal Items: This can be entered under the 1099-K field.  A loss is not allowed, but a gain is taxable (also see the note below).  If all of these items were sold at a loss then the only entry you need will be here.

• Personal Tab > Personal Income > I'll choose what I work on > Other Common Income > Income from Form 1099-K > Start or Update > Add a 1099-K or Edit
• Select Personal Item sales > Continue > Enter the information requested-only the personal sale portion should be entered in Box 1a > Continue > Select the appropriate statement and enter the proceeds again for the items sold at a loss or had no gain. If this is your only entry for the personal sales you are finished.
• If you do have any personal item sales at a gain in separate transactions then you will follow the steps for Inherited Items except you select short term or long term holding periods based on the time you actually owned the items.

NOTE: One personal item or a group of personal items sold in one transaction at a gain requires the gain to be taxed. 

One personal item or a group of personal items in one transaction sold at a loss, the loss is suspended and not allowed to reduce or offset other income, even the gain on personal items sold in a different transaction.

Please update if you have more questions and one of your tax experts can help.

@CombatWombat 

[CombatWombat]

While much of the advice I've received here is helpful the single most CRITICAL point was never mentioned.

I had to find it myself. I wish I could claim brilliance but it was actually desperation. Just start clicking stuff and hope it works.

The 1099-K MUST be listed for "self-employment income". But YOU missed the most important item. On the next screen you must check the box that says:

"This amount in box 1a in incorrect"

Only then will you get a drop down that allows you to enter the amount that is related to personal use.

Here is the problem for the layman. The amount on the 1099 is NOT incorrect. It is not ACCURATE for business related revenue but it is NOT incorrect. It would never have occurred to me to check that box. The software screen needs an expansion of instructions or a pop up help window to alert the user of the context of the box.

I did not know the correct specific question to ask to get the answer to the broader problem.

Without checking that box and entering the personal amount the program has NO OTHER WAY to direct the revenues away from the business calculations.

Go back to my original question. I have been screwing around with this for 10 days on and off because there is no way to know from the "surface" of the screen instructions to check a box that is 100% counterintuitive.

Understand that the next logical step for an incorrect 1099 is to request a revised from from the source. In this case that is a fruitless futile operation because we all know the 1099 is in fact 100% correct.

You need to take this up with your programmers and insert additional instructions and help items into the program.