Confusion about 1099-K filing with eBay/at a loss?

[ghostteaaa]

So I received a 1099-K from eBay after selling some personal items like clothes and old shoes and books at a loss & I’m wondering how to file it? I didn’t realize how MA laws changed this year and that I would be sent one automatically if I sold over $600 dollars complicating how I normally file things. I don’t know how I should file it as I’ve taken a loss in things and I’ve been selling things just to get them out of my apartment : / 

[MaryK1 · Accepted solution]

If you sold items on ebay, but not as a business or with the intention of making money, you would not have to report the income on your tax return- unless you sold the items for more than you purchased them for.  Even though you do not have to report the income, keep a copy of the 1099-K with a list of the items you sold and how much, with your tax records. 

From the Massachusetts Department of Revenue: If you receive either a federal Form 1099-K or a Massachusetts Form M-1099-K that shows amounts paid to you, you must report taxable amounts on Schedule X, as other income, or if such amounts are derived from a trade or business, on Schedule C. See TIR 17-XX. (emphasis added)

[ghostteaaa]

Thank you for your help! My only other questions are would I need records of how much I originally purchased what items I sold for as well as what I sold everything for? I purchased many of the items quite some time ago hence my apartment/closet purge. Should be easy looking up current value of many of the things I sold to show I took a loss. Also I don’t want it to seem like I’m evading taxes so would it just be better to file something so I don’t get penalized or something? I don’t want it to seem like I’m avoiding paying taxes/is there a way to make it clear I took a loss if I don’t file it? I just want to do what’s right whatever the best way is filing it or not. I hope these aren’t silly questions. I’ve never had this issue come up before when I’ve filed previous. Thank you again for all of your help! I really appreciate it.

[MaryK1]

No, unfortunately, there is no way to show the loss or indicate it on the tax return- which would be so much simpler- even if they made you sign a statement "I received a 1099-K but I attest that I did not have income or sell items as a business."
For very small amounts there will be a lot of people who do not have to file which is why I suggest preparing a summary now. (And you could do printouts or save on your computer the ebay listings, especially if you have pictures of condition when they were sold.)  While it is extremely unlikely anyone would get audited just for this, it is always a possibility.

[ghostteaaa]

Thank you again for your help! I really appreciate it.

[MaryK1]

You are welcome, we have been seeing quite a few questions on this- I wish that Mass would have provided more info for the taxpayers, they seemed to focus more on the issuers.

[yuezhu]

I live in Massachusetts and have the same situation. I got a 1099-k from PayPal the other day as a result of selling my personal used goods on eBay. The total number of transactions is far less than 200 and amount of paid is around $4k. I searched "schedule c" in TurboTax, and answered a couple of questions. The 1099-k ends up with an item"Self-employment income and expenses" in my turbotax, and I need to pay several hundreds for federal, and around a hundred for state. Are these expected for $4,000 as the total paid amount?

[meromalley1]

I also live in Mass and would also love about $600 since turbotax makes you add it in federal and not just in state. we should not have to declare it as income federally because it is way below threshold of $20,000.

[ricknbfd]

Also, live in Mass   and have searched the internet for answers on how to input 1099 k only in Mass  as I am far below  federal  requirements   Turbo tax doesn't   explain where to enter it   has anyone have any luck  seems like Mass is making thing complicated for a lot of people

[heidelberg_1]

On the MA IRS page, it says the 1099K is “an informational document”; you don’t have to report it as income if a) you sold personal items at a loss; or b) if it’s reimbursement (you were paying a friend back): <a rel="nofollow" target="_blank" href="https://www.mass.gov/service-details/frequently-asked-questions-about-1099-k-notices-from-third-part...>

[yuezhu]

So there is no need to report to federal if the number of transactions is less than 200 AND amount of paid is less than 20,000. For MA, it also looks like reporting 1099-k from Paypal due to selling personal used items on eBay is not needed as long as no money was earned when selling them.

[MaryK1]

That is correct, Massachusetts is the only state that requires 1099-K for $600 (which is a very low amount and has caused many people to receive the 1099-K).  The most important thing is to keep the records of exactly what was sold, its' condition when sold, etc.

[heidelberg_1]

In 2017, the rules changed for reporting income through a “third party network” in MA; now anything over $600 has to be reported to MA IRS (but not to Federal IRS; it’s only reportable to the Feds if it’s over $20,000 AND 200 transactions).

However, not all of this income is necessarily taxable. The MA IRS webpage says that “Form 1099-K is an informational document. You should use the information reported in conjunction with your other records to determine whether it’s taxable income and to determine your correct tax.” 

They also give examples. People who receive income from Uber or Lyft should report it; people who make a profit should report it; people who sold items at a personal loss should NOT report it; people who are receiving reimbursement for an expense should NOT report it.

See the MA IRS website for more info: https://www.mass.gov/service-details/frequently-asked-questions-about-1099-k-notices-from-third-part...

[datadon]

Sold my old dolls, bike,stereo, damaged refrigerator and furnace parts. I received a 1099k for $6000. I am not a business. I'm 75 stuck in the house and downsizing. What to do

[Megatheorium]

How can you document acquisition cost for a possible future audit if everything you sold that was reported on a 1099-K by a third party payment was received as a gift when you were a child? This is not a hypothetical. I sold about $800 of vintage toys, books, comic books, and medals that I received as gifts when I was a child and — because I live in Mass. — I received a 1099-K.