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New Member
posted Jun 6, 2019 9:43:06 AM

Do I need to file for a 1099-K in Massachusetts for garage type sales on Ebay?

I'm still confused about the 1099-k I received. I reside in MA and received this because I sold over $600 of items on Ebay(paypal).  I did not make a profit as this was all items that I initially paid much more for (similar to garage sale).  Do I just keep a record and not file this or do I file it anyway showing a loss (or manipulate to a break even)?


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1 Best answer
New Member
Jun 6, 2019 9:43:08 AM

Normally, you would not report the sale of your personal items because you sold them for less than you paid for them. You could leave it off and if the IRS questions it, then show them your documentation.  Print out or screen shot something from Paypal showing what you sold was used personal items.

Since it was reported on a 1099-K, you can report it this way if you prefer. This way you offset the cost against the income and end up with $0 taxable income:

Enter it under Wages & Income: 

  1. On Your 2017 Income Summary, scroll down to Less Common Income,
  2. Click on Start next to Miscellaneous Income
  3. Then scroll down and choose Other reportable income
  4. Answer Yes to "Any Other Taxable Income?" 
  5. Under Description put "Sales of Personal Property 1099-K"
  6. Enter the amount from the 1099-K in the next box, click continue, 
  7. Click on "add another income item", 
  8. Under Description this time put "Cost of Personal Property 1099-K"
  9. Enter the same amount but as a negative
  10. On the Other Miscellaneous Income Summary make sure you see the 2 items, one positive and one negative and Total is $0.

The IRS will not allow you to deduct a loss on personal items that you sell

24 Replies
New Member
Jun 6, 2019 9:43:08 AM

Normally, you would not report the sale of your personal items because you sold them for less than you paid for them. You could leave it off and if the IRS questions it, then show them your documentation.  Print out or screen shot something from Paypal showing what you sold was used personal items.

Since it was reported on a 1099-K, you can report it this way if you prefer. This way you offset the cost against the income and end up with $0 taxable income:

Enter it under Wages & Income: 

  1. On Your 2017 Income Summary, scroll down to Less Common Income,
  2. Click on Start next to Miscellaneous Income
  3. Then scroll down and choose Other reportable income
  4. Answer Yes to "Any Other Taxable Income?" 
  5. Under Description put "Sales of Personal Property 1099-K"
  6. Enter the amount from the 1099-K in the next box, click continue, 
  7. Click on "add another income item", 
  8. Under Description this time put "Cost of Personal Property 1099-K"
  9. Enter the same amount but as a negative
  10. On the Other Miscellaneous Income Summary make sure you see the 2 items, one positive and one negative and Total is $0.

The IRS will not allow you to deduct a loss on personal items that you sell

New Member
Jun 6, 2019 9:43:10 AM

Thank you for the detailed answer. I added the information and as I would have expected there was no net change in my federal tax refund amount. The state return however seems to be showing a loss for “my business” and actually increased my return by several hundred. I assume that is wrong. Where do I look in the state return to fix this?

New Member
Jun 6, 2019 9:43:11 AM

Thank you for the detailed answer. I added the information and as I would have expected there was no net change in my federal tax refund amount. The state return however seems to be showing a loss for “my business” and actually increased my return by several hundred. I assume that is wrong. Where do I look in the state return to fix this?

New Member
Jun 6, 2019 9:43:13 AM

You can do it another way that won't affect your Massachusetts taxes. Enter it under Wages & Income, Your 2017 Income Summary, scroll down click on Start next to Miscellaneous Income, then choose Other reportable income, answer Yes to "Any Other Taxable Income?" Under Description put "Sales of Personal Property 1099-K" and enter the amount from the 1099-K in the next box, click continue, click on "add another income item", Under Description put "Cost of Personal Property 1099-K" and enter the same amount as a negative. On the Other Miscellaneous Income Summary make sure you see the 2 items, one positive and one negative and Total is $0.

New Member
Jun 6, 2019 9:43:15 AM

Thank you I will try that

New Member
Jun 6, 2019 9:43:17 AM

Actually I have one more question.  If I am putting my costs so that the total expenses equal the total income (zero net as opposed to the loss), would it be better to do that in Schedule C?  Does it matter which way? I want to minimize audit risk.  Thank you.

New Member
Jun 6, 2019 9:43:18 AM

Reporting it as Miscellaneous Income (Line 21 of Form 1040) is clearly labeled for the IRS. They will see that it is sale of personal items.  Schedule C is actually more audited.

New Member
Jun 6, 2019 9:43:20 AM

@TurboTaxCathi I'm in a similar boat for my PayPal sales. However, I can only figure out how to input sales/costs for 1099-K Schedule C i.e. Self-Employment. How and where do I report it as Miscellaneous Income (Line 21 of Form 1040)?

New Member
Jun 6, 2019 9:43:22 AM

@TurboTaxCathi I can't find the Miscellaneous Income section either

New Member
Jun 6, 2019 9:43:23 AM

Just delete the 1099-K that you entered and start over using these steps below.  The description on line 21 will say 1099-K and the IRS can see that.  Enter it under Wages & Income:

On Your 2017 Income Summary, scroll down click on Start next to Miscellaneous Income,
Then scroll down and choose Other reportable income
Answer Yes to "Any Other Taxable Income?"
Under Description put "Sales of Personal Property 1099-K"
Enter the amount from the 1099-K in the next box, click continue,
Click on "add another income item",
Under Description this time put "Cost of Personal Property 1099-K"
Enter the same amount but as a negative.
On the Other Miscellaneous Income Summary make sure you see the 2 items, one positive and one negative and Total is $0.

New Member
Jun 6, 2019 9:43:25 AM

@TurboTaxCathi where do i find my income summary?

New Member
Jun 6, 2019 9:43:27 AM

Oh, you have to scroll WAY down on the  "Your 2017 Income Summary" page to find Miscellaneous Income.  It's almost at the bottom. Let me know if you find it.

New Member
Jun 6, 2019 9:43:28 AM

What version do you have?  and is itTurboTax Online or CD/Download?

New Member
Jun 6, 2019 9:43:30 AM

@TurboTaxCathi on what page though? I'm not even seeing that heading

New Member
Jun 6, 2019 9:43:32 AM
New Member
Jun 6, 2019 9:43:33 AM

@TurboTaxCathi  I have everything including my w2, investments, etc imported into turbo tax online. Just stuck on this 😕

New Member
Jun 6, 2019 9:43:35 AM

Click on Federal on the left of your screen, under the Wages & Income tab at the top, the screen that comes up should say Your Income, the first thing is Job (W-2) then self-employment income and expenses, Interest...  scroll down to Miscellaneous

New Member
Jun 6, 2019 9:43:37 AM

@TurboTaxCathi still not seeing it...all im seeing for 1099-k is 'Self Employment' and 'Other Common Income'

New Member
Jun 6, 2019 9:43:39 AM

@TurboTaxCathi nvm found it under the 'less common income' sub-heading and then 'miscellaneous income' and then 'other reportable income' thanks!

New Member
Jun 6, 2019 9:43:40 AM

Oh good!  Glad you found it there.

New Member
Jun 6, 2019 9:43:42 AM

This link is helpful to find out if you have to report it. It is directly from the MA gov website.    <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>

New Member
Jun 6, 2019 9:43:44 AM

@CathiM In addition to the resale of old items, are eBay sale of a small amount ($150) of unused UA lounge passes as a benefit of credit cards taxable income on the 1099K?  Even though I didn't directly pay for the passes, the sold price of the passes was much discounted relative to the public sale price.

New Member
Jun 6, 2019 9:43:45 AM

The reason the sale of personal items is not taxable is because you sell them for much less than you paid for them. So did you pay more for the UA lounge passes than you sold them for?  You cannot take a loss on the sale, but the cost does offset the income from the sale.  I am not sure what a UA lounge pass is though.

New Member
Jun 6, 2019 9:43:47 AM

@TurboTaxCathi Thanks for your prompt reply. I didn't pay for the UA lounge passes as it is a benefit of my credit card. So I am not sure whether the sale is taxable or not. But the sale was indeed occasional because the passes were expiring and I didn't have travel plans before the expiration date.