I added income from my 1099-K and when trying to file, I get an error via Form 1099-B, saying the sales proceeds don't match the payment amount on 1099-K. What do I do?

[blossomgleim]

I only have one 1099-K, via Paypal. I only added the Filer's name, TIN and gross amount reported in box 1a (as directed). It's now prompting me to check the 1099-B worksheet entry. Not sure what to change / where the error could be...

[JamesG1]

Are you reporting personal items sales?  If that is your intent, there is a two-step process.

First, the IRS form 1099-K is entered reporting the gross income received.

Second, and entry on IRS form 1099-B is made to report the same income received, the cost basis of the item sold, dates of purchase and sale and costs of sale.

The prompts to check the IRS form 1099-B are asking you to perform the second step.  The following may be helpful.

• At the screen Your income and expenses, scroll down to Investments and Savings (1099-B, 1099-K….).  Click the down arrow.
• To the right of Stocks, Cryptocurrency, Mutual Funds, Bonds, Other (1099-B), select Start/Revisit.
• At this screen, you will be asked to Review the Personal item sales (1099-K).  You may have to click the down arrow to the right, then click Edit.
• At the screen Review your 1099-B, click the pencil to the right.
• At the screen Now, enter one sale…., answer questions about the personal item sale.  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.

[blossomgleim]

Hello and thank you for your reply!  So, in this particular case, I sold record albums from my personal collection.  Some I've owned for 15+ years, some for much less...  Needless to say, I definitely don't know how much I originally paid for them.  Further, it would be an incredibly daunting task to list each album I sold over the past year -as there were many.  

All of this said, do you have any recommendations for me?  Can I just remove my 1099-K form from my filing?  I'm in TN which doesn't have an income tax anyway...  It's just extremely unrealistic to think that I can itemize all of the small dollar sales that I had over the past year, let alone compute how much gain/loss I incurred from each sale.  

Any help you may have would be greatly appreciated.  Thank you!

[JamesG1]

I would not remove the IRS form 1099-K and ignore the form.  The larger the dollar amount, the more likely the IRS will follow up and ask why that income was not reported.

If you are reporting sales as Personal item sales, you will be reporting the entries on IRS Schedule D.  Associate the 1099-K income with Schedule D and not the other Schedules.

Personal items sold for less than their cost 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

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

#2                   $400               $300          Capital gain on personal item = $100 gain

#3                   $100               $100          No capital gain or loss              = $0 gain/loss

                        $1,000           $1,400

I would make some kind of breakdown of your album sales.  If you sold 100 albums in 2024, how many fit into each of the categories listed above?  Then assign a selling price and a cost basis.  

Category #1 was sold for loss.  The loss is reported but does not offset a gain reported for category #2.

Category #2 was sold for a gain which is reported and taxed.

Category #3 was sold for $0 gain or loss.

To report Personal item sales in TurboTax Online, 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 Start 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.      Click Continue.
• At the screen Personal Item Sales, you are told that further information will need to be entered.  You may report some or all items were sold at a loss or had no gain.
• Refer to the prices above.  If $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.
• 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.  
• Refer to the prices above.  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.

[kenwatson1969]

I am getting this same error with the 1099-B and the 1099-K not matching. They match. I have rounded to the nearest dollar and I still get the error. I have not loss, it's all gain from eBay sales. I cannot submit my return until this error is resolved.

[JamesG1]

First, I would round all the transactions to the nearest dollar.

IRS Publication 17, page 14 states:

Rounding off dollars

You can round off cents to whole dollars on your return and schedules. If you do round to whole dollars, you must round all amounts.

Make sure to retain paperwork should a tax authority contact you at a later time.

If you were to group your personal sales, there would be as many as four categories:

• Personal item for loss reports $0 gain/loss,
• Personal item gain long-term basis,
• Personal item gain short-term basis, and
• Personal item, no gain or loss.

Here are examples.

                       Selling           Cost

                       Price              Basis

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

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

T3                   $0                   $0               ST Capital gain on personal item = $0 gain/loss

T4                   $100               $100          No capital gain or loss              = $0 gain/loss

                        $1,000           $1,400

In TurboTax Premium Only, report Personal item sales by following these directions.

• Down the left side of the screen, click Federal.
• Down the left side of the screen, click Wages & Income.
• Click on the down arrow to the right of Other Common Income.
• 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 T4 total $600 and report $0 gain.    
• Click Continue.
• At the screen Personal Item Sales, 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 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.

[colorado25]

I dealt with this exact same issue as a result of selling two guitars at a small loss via PayPal. I followed the instructions and I hope I got everything right. In order to follow them, I had to upgrade my TurboTax subscription. That seemed to be the only way to enter the info about the individual items on the 1099-K. I don't see the 1099-K income reflected anywhere in my return document, but I do see the losses I entered in the Schedule D section. The UI/UX for 1099-K is one of the more frustrating experiences I've had on a website in recent memory. If I have another 1099-K next year, I may just hire an accountant so I can be confident that things will be done correctly.