topic I also live in Mass and would also love about $600 since... in Retirement tax questions

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

ghostteaaa — Fri, 07 Jun 2019 23:13:11 GMT

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 : /

If you sold items on ebay, but not as a business or with...

MaryK1 — Fri, 07 Jun 2019 23:13:13 GMT

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)

Thank you for your help! My only other questions are woul...

ghostteaaa — Fri, 07 Jun 2019 23:13:15 GMT

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.

No, unfortunately, there is no way to show the loss or in...

MaryK1 — Fri, 07 Jun 2019 23:13:16 GMT

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.

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

ghostteaaa — Fri, 07 Jun 2019 23:13:21 GMT

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

You are welcome, we have been seeing quite a few question...

MaryK1 — Fri, 07 Jun 2019 23:13:23 GMT

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.

I live in Massachusetts and have the same situation. I go...

yuezhu — Fri, 07 Jun 2019 23:13:23 GMT

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?

I also live in Mass and would also love about $600 since...

meromalley1 — Fri, 07 Jun 2019 23:13:25 GMT

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.

Also, live in Mass and have searched the internet for a...

ricknbfd — Fri, 07 Jun 2019 23:13:26 GMT

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

On the MA IRS page, it says the 1099K is “an informationa...

heidelberg_1 — Fri, 07 Jun 2019 23:13:28 GMT

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-party-sellers">https://www.mass.gov/service-details/frequently-asked-questions-about-1099-k-notices-from-third-party-sellers</a>

So there is no need to report to federal if the number of...

yuezhu — Fri, 07 Jun 2019 23:13:29 GMT

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.

That is correct, Massachusetts is the only state that req...

MaryK1 — Fri, 07 Jun 2019 23:13:31 GMT

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.

In 2017, the rules changed for reporting income through a...

heidelberg_1 — Fri, 07 Jun 2019 23:13:34 GMT

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...

Re: No, unfortunately, there is no way to show the loss or in...

datadon — Sat, 23 Jan 2021 19:55:01 GMT

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

Re: No, unfortunately, there is no way to show the loss or in...

Megatheorium — Sun, 24 Jan 2021 12:26:22 GMT

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.

Re: No, unfortunately, there is no way to show the loss or in...

PattiF — Sun, 24 Jan 2021 19:24:38 GMT

Yes, Massachusetts and a few other states have lowered the threshold for reporting income from PayPal on a 1099-K. The Massachusetts State Tax website says that if the income on the form did not meet the federal threshold of $20,000, then the 1099-K only needs to be reported to Massachusetts and not included with the IRS return. There is a separate link to MassTaxConnect as shown in the link in the paragraph Submission of Forms 1099-K to DOR using combined Federal/State Filing Program. Massachusetts 1099-K Submission

The FAQ section of the same web page has a section "Since I received a Form 1099-K, does that mean I owe tax?" FAQ 1099-k Massachusetts Number 2 addresses selling personal items at a loss while downsizing.

The cost basis of something that was received as a gift would be the cost that the person who gave the gift paid for the item. Determining cost of sold items The original cost of books, toys and comic books could be researched on the internet to come up with a reasonable figure.

Form 1099K reported to IRS if it is under 20k and 200 transactions

cobra02301 — Sun, 31 Jan 2021 16:58:57 GMT

I received a Form 1099K from Paypal, Inc in relation to sales I made on eBay in 2020. My sales were only $2,900 and my total transactions were 137. I live in Massachusetts. Will this info be reported to the IRS and do I have to report it on my 1040 this year or do I have just have to report it to Massachusetts? Can I deduct shipping expenses, state tax paid and fees if I do have to report it? Thanks for your time.

Re: Form 1099K reported to IRS if it is under 20k and 200 transactions

KathrynG3 — Sun, 31 Jan 2021 17:18:09 GMT

Yes, this information is reported ot the IRS. Yes, you do have to report it on your 2020 Form 1040 and it would be included in the Massachusetts return, as well. If you want to deduct shipping expenses, state tax paid and fees, then that would need to be reported on Schedule C and subject to self-employment.

Alternatively, if this was not self-employed income, but more like income from a garage sale, then you could offset your earnings with the costs of the items. The maximum you can deduct from the proceeds is the amount of the proceeds.

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

@cobra02301

Re: Form 1099K reported to IRS if it is under 20k and 200 transactions

cobra02301 — Wed, 03 Feb 2021 13:38:22 GMT

Thank you for the response. I understand the federal return now. Where do I report that income as a garage sale with the offsetting cost of the items on my Massachusetts State Return. Thanks again.

Re: Form 1099K reported to IRS if it is under 20k and 200 transactions

PattiF — Wed, 03 Feb 2021 17:55:02 GMT