topic Re: 1099-k offsetting? in Get your taxes done using TurboTax

1099-k offsetting?

David971 — Tue, 09 Feb 2021 00:21:08 GMT

How do i offset the personal items items i sold on ebay as i am not a business.

I entered 1099-K as received in Other reportable income now i need to offset the cost where do i enter that?

I was going by this.

Option 2 in TurboTax Deluxe or higher: reporting it via Other Miscellaneous Income is acceptable to the IRS.

From the left menu, go to Federal and select the first tab, Wages & Income
Add more income by scrolling down to the last option, Less Common Income, and Show more
Scroll down to the last option, Miscellaneous Income, 1099-A, 1099-C and Start
Choose the last option, Other reportable income and Start and Yes
Enter the applicable description and amount and Continue
- First, enter Form 1099-K as received. It is essential that the full amount be entered.
  - For a description, include Form 1099-K and Personal Property Sales
- Next, enter an adjustment to reflect the cost of these items as an offsetting, negative amount up to the amount of the income.
  - For the cost description, include Form 1099-K and Cost of Personal Property
  - In other words, if the goods cost you $100 and Form 1099-K was for $10 in sales, the maximum cost allowable would be $10.

Re: 1099-k offsetting?

AmyC — Tue, 09 Feb 2021 02:44:13 GMT

That is well laid out and works. The point is to eliminate the income. We had a conversation and one of the managers had the idea of using Sch D as well. Another said she would be tempted to not report it. I am super conservative when it comes to the IRS. As long as you claim the income and then eliminate it, you are fine. The method you found above works and seems easy to follow. The part where it says to enter an adjustment- that is the key where you will enter a matching amount to zero out the income.

You already entered: 1099k, personal property sales and amount.

Next, enter 1099k, cost of personal property, negative same amount

Re: 1099-k offsetting?

David971 — Tue, 09 Feb 2021 11:26:24 GMT

I don't know where to enter this info at?

enter an adjustment to reflect the cost of these items as an offsetting, negative amount up to the amount of the income.

Re: 1099-k offsetting?

KathrynG3 — Tue, 09 Feb 2021 13:58:09 GMT

To clarify where to enter the negative amount:

Go back to Option 2, Step 5. Enter the applicable description and amount and Continue. (For example, the entries were Description Personal Property Sales and 100)
TurboTax now shows Other Miscellaneous Income Summary.
Select +Add Another Income Item on the lower left side.
At Other Taxable Income enter Cost of Personal Property for description and the negative amount and Continue. (To continue with the example, the amount would be -100.)
Now returned to Other Miscellaneous Income Summary, select Done.

@David971

Re: 1099-k offsetting?

David971 — Tue, 09 Feb 2021 23:49:37 GMT

I found where to enter it!

Re: 1099-k offsetting?

Critter-3 — Tue, 09 Feb 2021 23:55:32 GMT

Correct ... selling personal items for a loss is not deductible so all you can do is offset the income to zero it out.

Re: 1099-k offsetting?

David971 — Thu, 11 Feb 2021 01:33:56 GMT

I think the offset is the best option for me.

I tired to enter it as a hobby and i had to pay tax on the reported amount on the 1099-k even though it was a complete loss.

I also used schedule c like most suggest but then i was taxed at a higher rate but i could have deductions but after reading more into it this way would only work for a short time as you can not claim a complete loss every year as a business.

Re: 1099-k offsetting?

ijanderson29 — Wed, 13 Apr 2022 16:52:17 GMT

Does this still apply in 2022 to work?

Re: 1099-k offsetting?

Cynthiad66 — Wed, 13 Apr 2022 17:18:30 GMT

If you receive this form 1099-K for selling a used electronic item you no longer need on Ebay, you most probably sold this item for less than you paid for them. You have made a loss on personal items. This loss on personal items is not deductible and is not reported on your tax return.

If this is the case, you do not need to report this form 1099-K on your tax return. Just keep it in your tax records along with any proof that it was for the sale of the electronic item.

Please read this TurboTax Help topic for more information.

@ijanderson29

Re: 1099-k offsetting?

Cdlow23 — Wed, 06 Jul 2022 15:57:39 GMT

Wondering if my same situation would apply?

I bought concert tickets for 8 friends at $173 a piece (back before covid). I just sold 4 of them at $150 each and am now getting a 1099K from ticketmaster since the gross income is $600. I will have to fill out this 1099 come tax season but I also need to offset this as I’m actually taking a loss in the long run on these 4 tickets. Would I follow this same process?

Thanks so much in advance, this has been a real headache.

Re: 1099-k offsetting?

Mike9241 — Wed, 06 Jul 2022 16:47:03 GMT

there seems to be a difference of opinion on reporting - one opinion

https://ttlc.intuit.com/community/tax-credits-deductions/discussion/1099-k-for-personal-items-sold/00/2458180

another

https://ttlc.intuit.com/community/taxes/discussion/1099-k-amp-personal-items/00/78901 (the link in the thread does not work)

here's another that suggests reporting on form 8949

https://www.lawofficesofjasonknott.com/where-to-report-form-1099-k-on-your-tax-return/

all this shows is no one is absolutely sure how to report a 1099-K for the sale of personal items. the article by Knott does have some logic in that the IRS has no way of knowing that the proceeds were from the sale of personal items sold at a loss. I would use schedule 1 misc income and not 8949. not reporting it could result in an IRS notice adjusting your return. you would then have to dispute the change. addressing the issue upfront should avoid the notice.

others may hold to the opinion not to report it at all.

if you report on your return, the cost would be equal to the sales price since no loss is allowed on the sale of personal items

Re: 1099-k offsetting?

ltbailey0 — Tue, 07 Feb 2023 19:27:22 GMT

This works for federal but does not import accurately to my state return (NJ). Trying to put negative amounts on the 'Other Wage Adjustments' or 'Other Non-Wage Income' sections does not seem to work. Any suggestions for how to address? I'm thinking somehow deleting the income/ form from my state return would make the most sense since I maintain support for why it's erroneous income.

Re: 1099-k offsetting?

ltbailey0 — Tue, 07 Feb 2023 19:27:59 GMT

Do you know how to get this to cascade down to state tax returns (NJ)?

Re: 1099-k offsetting?

RobertB4444 — Tue, 07 Feb 2023 20:47:39 GMT

This method still works and should carry over on to your state return with the net amount showing up there.

You can re-enter the negative amount into your New Jersey return if necessary to get the taxable amount to where it should be. But if it was entered correctly on the federal return then it should be carrying to the New Jersey return as well.

I suggest you re-check your original entries.

@ltbailey0

Re: 1099-k offsetting?

Lbailey0 — Tue, 07 Feb 2023 21:18:58 GMT

Thanks for the quick reply! I've rechecked the entries on the federal and confirmed the income has offset. TurboTax is not pulling the offsetting entry to the NJ state return. Further, when I plug in the negative/ offsetting amounts on the NJ return it is not taking effect as evidenced by the 1099k amount still showing on the income summary page.

There was an issue the last 2 years with TurboTax not allowing negative numbers which resulted in me having to print my state return and I'm skeptical that the issue has been fixed. Can you escalate?

Re: 1099-k offsetting?

JamesG1 — Tue, 07 Feb 2023 22:17:56 GMT

What is the nature of the 1099-K income that you are reporting?

When the original 1099-K is entered into the TurboTax software, you are presented with eight options.

For instance, the option Personal Item Sales leads to reporting the income on Schedule 8849 / Schedule D which should flow properly to the NJ tax return.

Please clarify.

@Lbailey0

Re: 1099-k offsetting?

ltbailey0 — Tue, 07 Feb 2023 22:40:04 GMT

Thanks for the continued help. The one that's giving me trouble is from PayPal and the nature of the transactions are actually for online gambling since I used PayPal to fund and withdraw. To the extent I have anything taxable from a gambling perspective, I'm covering that with W2-Gs so this is erroneous income. Based on this, I selected the last option Other --> Other.

I can confirm that for the 1099-K I received from eBay which relates to the sale of personal goods my offset seems to have carried through to the state return. I selected the 'Personal item sales' option for this form and put in the offset in line with the first post in this series.

Re: 1099-k offsetting?

AbrahamT — Thu, 09 Feb 2023 02:12:02 GMT

Here's what you do

For the K-1 income reporting, Personal income, then Less Common Income, then Prizes, Awards and Gambling Winnings, then update until you reach this screen

For the W2 G reporting, you'll take it one screen back like this;

And then finally, to back out the duplicate income Go into Less Common Income, Misc Income, Lets work on Misc income,, Did you receive Other Wages-answer Yes till you get to the screen Any Other Income, hit yes, then source of Other Income, Other, then in description enter duplicate income and put a negative for the duplicate income amount like this

P.S. The 60,000 is for illustration purposes only. Put the negative duplicate income amount as in your situation.

Best

Re: 1099-k offsetting?

marti3td — Tue, 28 Mar 2023 21:51:30 GMT

Did you ever get a response on how to offset online gambling transactions from PayPal through a 1099-K?

Re: 1099-k offsetting?

DaveF1006 — Tue, 28 Mar 2023 22:36:57 GMT

Yes, there is a way but you will need to enter your 1099K a different way. Before I mention how to do it, there are a few ground rules.

You may only enter gambling expenses up to the amount of gambling winnings.
Gambling winnings are itemized deductions. Depending on your filing status, your standard deductions are as follows.

Single taxpayers: $12,950
Married taxpayers filing a joint return: $25,900
Heads of household: $19,400

if you have itemized deductions that exceed the standard deduction amount listed, you may itemized. itemized deductions are for things like ome mortgage, state taxes paid, medical expenses the exceed 7.5% of your adjusted gross income, charitable contributions. If you don't have any of these and if your gambling losses do not exceed the amounts i have listed, chances are you won't be able to itemize and claim your losses. If you can however, here is how to enter your 1099K gambling income and claim your losses.

Go to Federal Taxes tab ( Personal Tab in Self-Employed)
Click Wages & Income
Select I'll choose what I work on
Then go to Less Common Income
Click Gambling winnings
When it asks if you receive the W2G say no
When it says let's Check for Winnings not on a W2G the nyou have two choices to make. Select either gambling or lottery winnings or prizes and awards. The losses are only deductible if you choose gambling.
Now you will enter the gambling winnings not reported on a W2G.
the next screen will ask if you have gambling losses in 2022. here you will enter losses that are equal or less than your gambling winnings.
If you entered your 1099 K elsewhere, you will need to remove it from that section and report it here., This is the only section where you can claim your gambling losses.
Again, if you don't have enough itemized deductions for the year, leave your 1099K where it is because you won't be able to claim the losses.

@marti3td