topic I received a 1099K for personal property sold through PayPal. When I itemize the cost of personal property items, it calculates a loss in turbotax. in Deductions & credits

I received a 1099K for personal property sold through PayPal. When I itemize the cost of personal property items, it calculates a loss in turbotax.

shalls7 — Mon, 03 Jun 2019 17:35:02 GMT

I have no idea where to put the costs of personal items where it doesn't populate a loss. I am not really self employed but it pushed me here because of the 1099k. I keep getting comflicting answers on whether or not I need to file it at all.

TurboTax, completely erroneously, associates a 1099-K com...

TomYoung — Sun, 24 Jan 2021 19:33:28 GMT

TurboTax, completely erroneously, associates a 1099-K with "self employment" income. I expect that 1099-K's probably are most commonly associated with self employment income, but that's not universally the case.

As to your "conflicting answers" statement, well not everything called an "answer" is correct but, too, users most commonly don't post enough information with their questions and "guesses" have to be made.

So let's start with this: If I recall PayPal used to issue a 1099-K in instances where $20K or more were processed and/or in excess of 200 transactions were processed. If that's still the case, that's a LOT of money and a LOT of transactions, which I least suggests a profit-seeking motive. So what,exactly, was the nature of the "personal property" sold? How did you acquire this personal property. Why were you selling it? Where were you selling it? Where are you entering this information in TurboTax? It seems that if you're only entering "revenue" numbers - the information off the 1099-K - there's no way you can have a "loss" and entering costs associated with this revenue isn't going to fix that. You need to explain what's going on here.

Thank you for your help TomYoung. I can explain more deta...

shalls7 — Mon, 03 Jun 2019 17:35:04 GMT

Thank you for your help TomYoung. I can explain more details and hopefully that will help because I am getting tons of conflicting answers and I am so confused about what I need to do. Yes, my 1099K was for $20,400 for last year. I spend a lot of money on children's boutique clothing and clothing for myself. If you don't understand the expense associated with the clothing I buy then I completely understand why this total doesn't make sense. I buy these boutique clothing every release and my cost for these clothing are very high. I will then sell the items usually after a couple of weeks or before the next release because that is what I like to do. I usually sell for 1/2 of the cost or 3/4 of the cost if I am lucky. I then use those funds from selling the clothes to purchase more from the next release. I do not make a profit but it adds up quickly. I also sell my boutique clothing but again for less than I paid for them. The other total in this amount was for a MLM company I sold products for but that was only about $1,000 of the total as I only sold it for a couple of months. PayPal fees are included in the total and cashback bonuses from ebates and shipping fees are included in the total. It is my understanding that I am responsible for deducting those amounts from the 1099k total as well.

to reports gains/losses to the extent allowed go to type...

maglib — Mon, 03 Jun 2019 17:35:06 GMT

to reports gains/losses to the extent allowed go to type "Investment Income" without the quotes in the search box, select "Investment Income, gains & Losses" and choose to JUMP TO, It will ask if you sold any invesments, say yes, select NO to the 1099-B question, Choose "Personal Items". See added info based on your additonal comments to separate types of income to report.

Do note that losses on personal use items are not deductible.... but you still must report the 1099K and this is where you do if you were just selling personal items you owned.

All the best.

@shalls7 follow the reply above for the clothes, you can...

maglib — Mon, 03 Jun 2019 17:35:07 GMT

@shalls7 follow the reply above for the clothes, you can lump them into 2 buckets Long Term sales and short term sales (held for or less than 1 year) as needed and enter various as purchase dates, You can enter expenses during the interview. MLM you can report as Hobby income following these directions <a rel="nofollow" target="_blank" href="https://ttlc.intuit.com/replies/5675605">https://ttlc.intuit.com/replies/5675605</a> but then expenses are only deductible as itemized deductons or you have to enter them as self employment income following these directions <a rel="nofollow" target="_blank" href="https://ttlc.intuit.com/replies/4944762">https://ttlc.intuit.com/replies/4944762</a> .

I am so confused. I did not receive a 1099-K from PayPal...

shalls7 — Mon, 03 Jun 2019 17:35:08 GMT

I am so confused. I did not receive a 1099-K from PayPal this year even though it exceeded the requirements. How do I proceed?

Re: I received a 1099K for personal property sold through PayPal. When I itemize the cost of personal property items, it calculates a loss in turbotax.

Anonymous — Wed, 22 Jan 2020 20:54:24 GMT

so I sold many of my designer handbag and shoes for me and my sister in law this year and didn’t realize I went over 20k until i received a 1099k also because of amazon rebates test item was almost 5k. How should I go about claiming/deducting since none of these were for profit/business income since they are old item I did lose value in everything..... ?

Re: I am so confused. I did not receive a 1099-K from PayPal...

ThomasM125 — Fri, 07 Jan 2022 00:39:13 GMT

If you are undertaking this activity with a profit motive, then you can report the money you received as sales associated with a business. In this case, you would need to set up a business in the TurboTax "Self-Employed" product. You will be able to enter the cost of your items purchased as "cost of goods sold", so you will not be taxed on the full amount of money you received from the items you sold. If you sustain a loss, it will be deductible on your tax return.

If you do not have a profit motive, then you must report the income as "Other Income" in the "Income and Expenses" section, then "Less Common Income" then "Miscellaneous Income" and then "Hobby Income and Expenses."

Please keep in mind that if your report the activity as a business and deduct losses from it, you cannot do this for more than a few years or the IRS may reclassify the activity as a hobby and disallow the losses you claimed in prior years.

Re: I received a 1099K for personal property sold through PayPal. When I itemize the cost of personal property items, it calculates a loss in turbotax.

kartheeksrm — Sun, 24 Jan 2021 18:47:57 GMT

What did u end up doing in 2020 did you report this?

Re: I received a 1099K for personal property sold through PayPal. When I itemize the cost of pers...

JamesG1 — Sun, 24 Jan 2021 19:15:18 GMT

The loss that TurboTax calculates likely does not reduce your adjusted gross income (AGI).

Losses from the sale or exchange of property held for personal use is not deductible. See IRS publication 544 Sale and Other Dispositions of Assets or this TurboTax Best Answer.

Personal-use property.

Loss from the sale or exchange of property held for personal use is not deductible.

You can review the 1040 in TurboTax Online by following these directions.

Down the left side of the screen, click on Tax Tools.
Click on Tools.
Under Other helpful links, click on View Tax Summary.
Down the left side of the screen, click on State Tax Summary to see the actual tax return that you prepared.
Down the left side of the screen, click on Preview My 1040 to see the actual tax return that you prepared.
Down the left side of the screen, click Back to return.

You may view your full tax returns prior to filing after you have paid for the software.

Re: TurboTax, completely erroneously, associates a 1099-K com...

EuroThrasher — Sun, 24 Jan 2021 21:58:11 GMT

I received a 1099K due to the state of residency (MA) where any amount over $600.00 requires PP notification and development of a form. I did not by any means surpass $20k or transactions. I only had a dozen transactions....

I sold used parts/accessories I had for/from my car that had been sitting around for many years, like 10-15 yrs......They were sold to members in my car club.

Technically speaking, I already paid for these parts items once and THAT income was already reported and taxed upon in a prior 1040A years ago...Now I am just getting that money back again spent many years ago and most of it now at a loss.. How can this be "taxable income" for the IRS when a personally owned / used 10 yr old auto parts sell for less amount than originally purchased....

Re: TurboTax, completely erroneously, associates a 1099-K com...

robby_d1 — Sun, 24 Jan 2021 21:34:35 GMT

Same issue. I moved to Virginia midway this year and have received a 1099k for selling items ive owned for a while. How do i file for this?

Re: I received a 1099K for personal property sold through PayPal. When I itemize the cost of personal property items, it calculates a loss in turbotax.

drnag — Sun, 24 Jan 2021 23:22:26 GMT

How did you handle this last year, I have a lot of income from product test/sample cashback etc, besides some Ebay sales.

Re: TurboTax, completely erroneously, associates a 1099-K com...

JamesG1 — Sun, 24 Jan 2021 23:35:42 GMT

The sale of personal property is reported as a sale of a capital item. The IRS will tax you if there is a gain. The IRS will disallow a loss on the sale of personal property.

See IRS Publication 544 Sale and Other Dispositions of Assets or this TurboTax Best Answer.

Personal-use property.

Loss from the sale or exchange of property held for personal use is not deductible.

If you bought item A ten years ago for $100 and sold it in 2020 for $500, there is a taxable capital gain, reported on Schedule D.

If you bought item B ten years ago for $100 and sold it in 2020 for $50, there is a taxable loss and no taxable event.

Re: TurboTax, completely erroneously, associates a 1099-K com...

drnag — Sun, 24 Jan 2021 23:50:54 GMT

Thanks @JamesG1 The 1099-k from paypal also includes money that is not income from profit, e.g. money for free product trials (e.g. Rebatekey) for items you pay for but you get the money back via Paypal, or other online survey money (otherwise below 1099-MISC thresholds). How can one 'deduct' these from the total 1099-K number as they are not income, and in fact dont have anything to do with the' business'.

Re: TurboTax, completely erroneously, associates a 1099-K com...

KathrynG3 — Mon, 25 Jan 2021 16:09:20 GMT

Discounts or cash back rewards are not taxable. To exclude them when they are included on Form 1099-K, follow these steps:

Go to Form 1099-K in your tax return. To return to this area of your return in TurboTax Online, follow these steps:
1. From the left menu, click on Federal
2. Under the Income & Expenses tab, scroll down to Self-employment income & expenses and click Edit/Add
3. Click Edit next to the net income
4. Under Income, scroll down to click the button on the left Add income for this line of work
5. Under Common Income, select the radio button for Other self-employed income, includes 1099-K, cash, and checks, scroll down and select Continue
6. At Tell us about the other self-employed income for your Education work, where you previously entered Form 1099-K, add another line with the applicable description of a subtraction. For example, Less Free Product Trials, or Less Cash Back Rewards.
7. Enter the amount as a negative number by starting the entry with "-" and click Continue.

@drnag

Re: TurboTax, completely erroneously, associates a 1099-K com...

drnag — Mon, 25 Jan 2021 16:20:36 GMT

@KathrynG3 This is extremely helpful! I also have some income on the 1099-K that should have been 1099-MISC except it was below $600 so the payer did not issue a 1099-MISC. Should I just let it be on the 1099-K so the tax gets paid, or enter as a negative number here and positive income elsewhere despite no 1099-MISC

Re: TurboTax, completely erroneously, associates a 1099-K com...

KathrynG3 — Mon, 25 Jan 2021 18:38:02 GMT

Yes, the income that could have eventually been reported to you on Form 1099-MISC can stay on Form 1099-K for tax reporting purposes. It is a best practice to keep good records to trace all the income sources to prove what is being reported.

In the event of a partial reporting on the forms, which potentially exists with Form 1099-MISC, Form 1099-K, etc., the best practice is to always report it on the tax return exactly as it was received initially.

Then, make the adjustments as necessary to get to the accurate total.

For example, if a business made $10,000 total, receiving Form 1099-K from PayPal for $7,500 which included $7,100 from one main source and $400 from someone else also on PayPal, but still business related, then in TurboTax, report $10,000 by entering Form 1099-K for $7,500, and add a line for Other business income of $2,500. Keep business notes which would track all the sources of income including each of these components.

I'm glad this is helpful!

@drnag

Re: I received a 1099K for personal property sold through PayPal. When I itemize the cost of personal property items, it calculates a loss in turbotax.

Szehner — Tue, 26 Jan 2021 05:35:55 GMT

If it's not income because it is personal use items sold at a loss, what form is the 1099k inputted on in the tax return? I moved to a state with a $600 reporting threshold and I am now receiving the 1099k. I realize you can't "deduct" the loss, I just dont want to pay tax on yard sale items that the IRS deems not taxable and I don't want to omit the 1099 and trigger an audit.

Re: I received a 1099K for personal property sold through PayPal. When I itemize the cost of pers...

JamesG1 — Tue, 26 Jan 2021 16:12:35 GMT

The income is most likely flowed to self-employment income or capital gain/loss on Schedule D. To find where the income was reported on your 1040 Federal tax return, follow these directions.

Down the left side of the screen, click on Tax Tools.
Click on Tools.
Under Other helpful links, click on View Tax Summary.
Down the left side of the screen, click on Preview My 1040 to see the actual tax return that you prepared.
Down the left side of the screen, click Back to return.

Self-employment income will be reported on Schedule 1 Additional Income and Adjustments to Income on line 3. The form total flows to the Federal 1040 on line 8.

Schedule D entries can be found on the Federal 1040 on line 7.

You may also print or view your full tax returns prior to filing after you have paid for the software.