topic 1099-k Issues in Business & farm

1099-k Issues

agaudio23 — Mon, 08 Mar 2021 19:24:23 GMT

Hi I have a 1099-k i received from eBay and one that I received from PayPal. I however a small business. these are thing s i simply sold at a great loss to get quick cash to pay bills. so how can i declare this income and the associated losses on these sales on my return. I have turbo tax premier which i got specifically to declare capital gains and losses to do this but i can t figure it out. please any help would be appreciated.

Re: 1099-k Issues

RayW7 — Mon, 08 Mar 2021 20:00:27 GMT

Capital gains, and losses are all entered in the same place:

Open or continue your return in TurboTax if it isn't already open.
Search for capital gains and then select the Jump to link in the search results.
Answer Yes to the question Did you sell any investments?
- If you land on the Here's the investment sales we have so far screen, select Add More Sales.
Following the instructions and we'll calculate the gain or loss from the sale.

Your total capital gains for the year minus your total capital losses result in a net gain or a net loss.

You can deduct a net loss of up to $3,000 ($1,500 if married filing separately). Any capital loss you couldn't deduct this year can be carried forward and deducted on future tax returns as a capital loss carryover.

Note: Make sure the IRS would view this as a business not a hobby.

Here are the IRS rules for making that determination: https://www.irs.gov/uac/business-or-hobby-answer-has-implications-for-deductions

Re: 1099-k Issues

agaudio23 — Mon, 08 Mar 2021 20:45:13 GMT

Hi,

I apologize. This is what the IRS would refer to as a hobby. I tried to clarify that in my last post. I am looking for a aw ay to enter the sales minus the cost of each of these items sold. so that I can deduct for the losses incurred if that is possiible.

I can figure out how to do this in turbo tax.

Re: 1099-k Issues

ColeenD3 — Tue, 09 Mar 2021 15:27:29 GMT

There are three ways to report this income.

1) You are in the business of resale. Enter it on Schedule C to show income and expenses. Do you have a business? ( I however a small business.)

2) You have capital assets that you sold. You would enter your cost basis and sales price. I don't know if this applies to you.

A capital asset is property that is expected to generate value over a long period of time. Capital assets form the productive base of an organization. Examples of capital assets are buildings, computer equipment, machinery, and vehicles. In asset-intensive industries, companies tend to invest a large part of their funds in capital assets. A capital asset has the following characteristics:

It has an expected useful life of more than one year
Its acquisition cost exceeds a company-designated minimum amount, known as the capitalization limit
It is not expected to be sold as a normal part of business operations, as would be the case for inventory
It tends not to be easily convertible into cash

3) You have other/hobby/miscellaneous income. (these are thing s i simply sold at a great loss to get quick cash to pay bills.)