Paypal, 1099-k on old "household items" in Illinois, how do I offset it?

[Beamar1]

So I received a 1099-k from paypal for old Car Parts. My hobby is racing. When I upgrade a part, I sell the old one, always for less than I paid for it. 

Illinois has a low threshold for the 1099-k.

Illinois: $1,000 USD in gross payment volume from sales of goods or services in a single calendar year with at least 3 payment processed.

turbotax doesn't allow you to directly enter the 1099-k, so I have to enter it as other income. How do I offset it? 

[KathrynG3]

There are two options to offset your income. Option 2 beginning at step #5 is the offset needed after entering Form 1099-K as other income. I have included all the steps for both options for your reference. 

Since your Form 1099-K is for personal items sold, similar to having a garage sale, and you were not in a trade or business, the IRS will allow you to also deduct the related expenses for the sale up to the amount of the sale.

For reporting Form 1009-K for personal items sold not associated with a trade or business, you have two options:

• Option 1 in TurboTax Premier or higher: reporting Form 1099-K as investment income
  1. Go to the search box and enter Investment Sales
  2. Select Jump to Investment Sales
  3. Select Other at the next screen, OK, what type of investments did you sell? and click Continue
  4. At Tell us more about this sale, enter in the name, such as Form 1099-K Personal Property Sales and the Payer's EIN and click Continue
  5. At Now we'll walk you through entering your sale details, under the first dropdown menu, What type of investment did you sell? Select Personal Items
  6. Answer How did you receive this investment with an option from the dropdown menu.
  7. Enter the Description. If you are uncertain what date you purchased the goods, select Something other than a date so that TurboTax will enter Various
  8. Next, enter your Sale Proceeds and an equal amount for the Total Amount Paid and click Continue. The description for the cost should include Cost of Personal Property
  9. Select None of these apply at Let us know if any of these situations apply to this sale and Continue
  10. Continue through the rest of the prompts 
  11. Select Add another sale to add the next Form received 
       
• Option 2 in TurboTax Deluxe or higher: reporting it via Other Miscellaneous Income is acceptable to the IRS.
  1. From the left menu, go to Federal and select the first tab, Wages & Income
  2. Add more income by scrolling down to the last option, Less Common Income, and Show more
  3. Scroll down to the last option, Miscellaneous Income, 1099-A, 1099-C and Start
  4. Choose the last option, Other reportable income and Start and Yes
  5. 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.

[emilar59]

how do i do that as a dependent on my daughters return?

[MaryM428]

You will not enter the 1099-K on your daughter's return.  You will file your own return.  You can do that for no cost at Free File.

Follow these directions to enter the 1099-K and all of your expenses.  



@emilar59

[emilar59]

I have already entered it as other income as referenced above. I am listed as a dependent on my daughters taxes as I am on SSDI, So I should file my own but check the box that i am on my daughters as a dependent.