EBAY Form 1099K and Turbotax is so confusing to complete - Please help me.

[Mikster2023]

Hello,

I have odds and ends at my home to make some extra money and sold them on ebay. The odds and ends in my home I have had for 20+ years and have no receipts. For the most part (about 90%) I have made a profit on the older stuff just knowing I did not pay what i sold the items for. I cannot prove what was the original cost.

I have chosen personal item sales. Then I am asked "Enter the total proceeds for items sold at a loss" with 2 options

a) I sold some items at a loss or had no gain.

b) All items were sold at a loss or had no gain

When I choose option A, I then am prompted with this entry - Enter the total proceeds for items sold at a loss or no gain. Of course, I do not have an exact dollar amount since it's been 20+ years. But in any event, let's say $500 was for a loss. I then run the "smart check" and I get the "check this entry" which says

"Form 1099-B worksheet: Amount from 1099-K has an amount from linked form(s) 1099-K, but the sales proceeds on this worksheet don't match the payment amount from Form 1099-K.  Add sale(s) on this worksheet with sale proceeds to match the amount reported on Form 1099-K"

I am then looking at Form 1099-B and see highlighted for Form 1099-K  reconciliation with a dollar amount which is $500 less than what the 1099-K (I did state that $500 was a loss). So I have no clue what I should be doing now with this form. Can someone help me - this is driving me nuts.

Thank you!

[JamesG1]

You should be able to view the 1099-B entries on Schedule D in Forms.  The proceeds received for the personal items on Schedule D will equal the total of the IRS form 1099-K's that have been entered.

You entered the IRS form 1099-K's and selected Personal item sale.

If so, the entry of the 1099-K has created a worksheet in which you need to enter the personal items, their costs, selling prices, dates and other information.

Each worksheet will generate entries that flow to the Schedule 8949 / Schedule D Capital Gains and Losses.

The total of the proceeds column should equal the total of the IRS form 1099-K or the software will give you an out of balance error message.

@Mikster2023 

[Mikster2023]

Thank you JamesG1 for your help. Just a  few questions if you would be kind enough to answer. So if I have 50 separate transactions that I sold, do I need to list each one individually or can I lump them into one? And am I entering this data on Schedule D (Form 1040) as a "long term capital gain or losses" (since these items are 20+ years old that I have had them) or am I entering these either individually or lumped as one on form 1099-B?

Does Schedule D carry the numbers to 1099-B or vice versa?

Thank you @JamesG1 

[JamesG1]

IRS form 1099-B flows to IRS form 8949.  IRS form 8949 flows to Schedule D Capital Gains and Losses.

The items may be lumped together but I would report two categories:

1. personal items sold for less than their basis, and 
2. personal items sold for more than their basis.

Personal items sold for less than their basis (most likely, the original purchase price) report $0 capital gain on line 7 of the Federal 1040 tax return.

Personal items sold for more than their basis report the gain on line 7 of the Federal 1040 tax return.  See this example.

                             Selling           Cost

                              Price             Basis

Couch                    $500              $2,000        Capital loss on personal item = $0 loss

Jewelry                  $400               $300           Capital gain on personal item = $100 gain

Chair                     $100               $100            No capital gain or loss

                               $1,000           $2,400

Any loss on the personal items are reported as $0 and the losses may not offset the gains on the personal items.

@Mikster2023 

[Mikster2023]

Hi JamesG1 again,

Thanks for your help. So I filed electronically for Federal and TurboTax had indicated that I needed to send in Form 8453 (U.S. Individual Income Tax Transmitted for an IRS e-file Return) and on that, Form 8949 was checked. So it appears that I need to send this in to the address that is listed below on that form. I assume I must include Form 8949. That shows the 1099-K dollar amounts (plus gains/loss) that I listed from eBay. Will I need to include copies of the 1099-K's as well as a breakdown of the merchandise that I sold printed on a sheet of paper? Because what I sold is rather random in type/category, I lumped the dollar amounts into one rather than break it down item by item as I would have to do that 150 times which is not practical. Can you advise what I would need to include with Form 8453? Or do I need "not to" send anything in and it's just a reflex or action that TurboTax makes? Thanks again - really appreciate all your help! Kind regards.

[JamesG1]

This is an IRS requirement.  The IRS will be looking for the form 8453 and the attachment(s).

Attach copies of any form 8949 received from Ebay and any summary calculations or spreadsheets that you used to arrive at the numbers reported to the IRS on the tax return.  Do not include copies of the 1099-K's.

@Mikster2023 

[Mikster2023]

Hi JamesG1!

The only documents that ebay provided was forms 1099-K which just shows the total dollar amount sold and a breakdown for each month. They did not provide any documentation for form 8949. I did print out form 8949 via turbotax and that just shows the total proceeds, my costs and the gain/loss in a dollar amount. Being that I should not include 1099-k as an attachment, then do I just send form 8949 as I just described? Do I need to provide a list of what I sold, how much it was sold for, etc..?

I'm sorry I keep bothering you but it's not clear to me what I should be sending the IRS.

Thanks again!

[MonikaK1]

As JamesG1 advised, you should include the Form 8949 from your tax return along with any summary calculations or spreadsheets you used to arrive at the totals that are reported on Form 8949. It's perfectly all right if what you have are handwritten lists, as long as they will tie in with the numbers on Form 8949.

Use Form 8453 to send any required paper forms or supporting documentation listed next to the checkboxes on Form 8453. Don't attach any form or document that isn't shown on Form 8453 next to the checkboxes. In your case, check the last box, for Form 8949 or a statement.

Statements should include the following items for each transaction:

• Description
• Date acquired,
• Date sold,
• Sales price,
• Cost basis,
• Gain or loss for each sale,
• Sale category based on how the sale was reported to you and the IRS

Please see this help article for more information.

[Brama]

I ran into this exact same issue. The question "Enter the total proceeds for items sold at a loss" seems to imply that if you enter a number here (which you HAVE to), it assumes you will not enter the itemized entries for which you incurred a loss in the itemization under investments later. If you enter a non-zero amount here, AND also itemize sales for which you incurred a loss, it will raise the 'Check this entry' error because it will deduct the proceeds from losses twice. 

And the worst thing is, once you are at the 'check this entry' stage, you are left with no option (assuming turbotax online) other than to delete the whole ebay entry, and re-enter EVERYTHING again. You cannot make corrections without doing this other than, I guess, removing the itemized entries for sales that incurred a loss.

At least this is my conclusion of how it works. This could do with some rework / clarification, it frustrated the ** out of me.

[LaurieB17]

TT does not have to make entering "Income from 1099-K" for EBay items sold so confusing. The question "Enter the total proceeds for items sold at a loss" suggests that you put down the amount you collected for items sold at a loss. However, if you do this you will end up with an error when you do your review because the numbers won't match. I found that the only way to get numbers to match is to enter $0.00 on that question. Later on you can report each item you sold and it will accept your gains and losses there.

Every year I dread doing the 1099K/Ebay section because there are always confusing/ambiguous questions and it is never the same.  TT needs to simplify this section!

[JamesG1]

It seems to frustrate some.  Perhaps this explanation is helpful.

If you are reporting sales as Personal item sales, you will be reporting the entries on IRS Schedule D.

When you enter the sales information, you will want to click the button to report the loss on sale of a personal item.  Personal items sold for less than their basis (most likely, the original purchase price) report $0 capital gain on line 7 of the Federal 1040 tax return.

Personal items sold for more than their basis report the gain on line 7 of the Federal 1040 tax return.  See this example.

                       Selling           Cost

                       Price              Basis

T1                   $500              $1,000        Capital loss on personal item = $0 gain/loss

T2                   $400               $300          Capital gain on personal item = $100 gain

T3                   $100               $100          No capital gain or loss              = $0 gain/loss

                        $1,000           $1,400

To report Personal item sales, follow these directions.

• Down the left side of the screen, click Federal.
• Down the left side of the screen, click Wages & Income.
• Scroll down to Other Common Income click on the dropdown menu.
• Click to the right of Form 1099-K.
• At the screen Did you get a 1099-K?, select Yes.
• At the screen How would you like to upload your 1099-K? click Type it in myself. 
• At the screen Which type of income is your 1099-K for, select the button for Personal item sales.  Click Continue.
• At the screen Let's get the info from your 1099-K, enter the information.  
• Box 1a is $1,000 but items T1 and T3 total $600 and report $0 gain.    
• Click Continue.
• At the screen Personal Item Sales, you are told that further information will need to be entered.
• Because $600 of the selling price will not be reported, enter $600 under I sold some items at a loss or had no gain. 
• Learn More provides detailed information for the next steps.  Click Continue.
• At the screen Your 1099-K summary, notice that the income relates to ‘Personal Items’.  Click Done.
• At the screen Your income and expenses, scroll down to Investments and Savings (1099-B, 1099-K….).  Click Add / Edit to the right.
• At this screen, you will be asked to Review the Personal item sales (1099-K).  Select Review.
• At the screen Now, enter one sale…., answer questions about the personal item sale.  
• Because you are only reporting the gain transaction, report  $400 as Proceeds and $300 as Total amount paid.
• Click Continue.
• At the screen, Let us know if any of these situations apply to this sale, sales expenses may be recorded.

The entry will be reported:

• on Schedule D of the Federal 1040 tax return, and 
• on line 7 of the Federal 1040 tax return.

Capital loss for a personal item sale reports $0 capital gain on line 7 of the Federal 1040 tax return.

@LaurieB17 

[LaurieB17]

JamesG1 Thanks for your reply, but despite trying to follow your steps I still get error messages.  I would like to know what to put for the question "Enter the total proceeds for items sold at a loss or no gain" under the Personal Item Sales section when reporting 1099K info. 

I had 5 sales with a gain of only $100. If my sales total on the 1099K was $1,000 and my cost basis was $900 what would I put on the line? Any positive number I enter ends up giving me an error. The only thing that works is entering $0.00. 

I also entered all the correct info in the later section reporting individual sales and cost basis. I would like clarification on what TT is looking for and I wonder why it can't simply use the numbers in the section where they ask for cost basis.  I'd really appreciate any clarification you can give. Thanks

[JamesG1]

Is $900 the cost basis of the five items or the one item reported for sale with a gain?  That may be the point of confusion.

In this example, there are five items, the 1099-K totals $1,000 and there is $150 gain on item 2.  The cost basis of that item is $350.

                    Selling           Cost

                    Price             Basis

1                  $300              $350            Capital loss on personal item = $0 loss

2                  $500               $350           Capital gain on personal item = $150 gain

3                  $100               $100            No capital gain or loss

4                   $50                $50              No capital gain or loss

5                   $50                $50              No capital gain or loss

                    $1,000           $900

Box 1a Gross amount of payment card is $1,000.

At the screen Personal Item Sales, enter $500 for I sold some items at a loss or had no gain.

At the screen Now, enter one sale, enter $500 for Proceeds and $350 for Total amount paid.  These are the numbers for the one item sold at a gain, item 2.

@LaurieB17 

[jferri57]

Hello.

I am having the same problem with my EBay 1099-K form.

As far as I can see my amounts match but I continue to get the error message.

I am so far beyond frustrated!!!

There used to be a place where you could get live help. Is that still available (Without having to pay extra)  That is the only thing holding me up preventing me from filing.

[KrisD15]

Make sure the amount you enter on the 1099-K entry screen is the amount you are SUBTRACTING OFF the 1099-K, not the amount you are trying to match.

Here are detailed steps:

If you sell items online as a business, enter on Schedule C
If you sell personal items online similar to a garage sale enter following these steps:

In TurboTax enter the 1099-K under:
Income
Other Common Income
Income from Form 1099-K     START
On the “Did you get a 1099-K?” screen, select “Yes”
On the “Which type of income is your 1099-K for?” screen, select “Personal item sales”     CONTINUE
Enter the 1099-K as it was reported
CONTINUE
On the next “Personal Item Sales” screen, make the correct selection. 
Choose “I sold some items at a loss or had no gain” if you made a profit on any individual sale
Choose “All items were sold at a loss or had no gain” If ALL the items were sold and you did not realize a gain on any single item, (they sold for less than or only for as much as you paid to purchase the item in the first place) you would not need to enter any sales. Enter the amount of the 1099-K that represents the cash you got for selling items at cost or under. This will be subtracted from the income reported on the 1099-K. You will only need to account FOR WHAT REMAINS.
So, if the 1099-K reports $1,000 and the only item you sold at a profit was an item that sold for $50, you would enter 950.
$950.00 on that 1099-K does not need to be addressed. 
Also, remember that this is NOT saying you MADE $50, only that someone paid $50. The profit would be less because you need to subtract what you paid to buy it. 
CONTINUE
Finish the interview and select done on the “Your 1099-K summary” screen, 
YOU ARE NOT DONE if you made the first choice that only SOME items sold at a loss,
that would mean that at least one item sold at a gain, for a profit. 
Now you need to report the sale, go to 
Income
Investment Income
Stocks, Cryptocurrency, Mutual Funds, Bonds, Other    click UPDATE
The next screen should show “Personal items sales (1099-K)” 
Click REVIEW to open 
The next screen has an input screen for the Personal items you sold at a
profit/gain.
Enter one sale at a time.
Report when purchased, when sold, how much you paid to buy it and how much they paid to buy it from you

The next screen asks for selling fees, but those are USUALLY deducted before they pay you, so would not be included on Form 1099-K
If they were not deducted from the 1099-K, enter here

Once done, you should see the amount of proceeds you needed to address ($50) and the profit you made from that (those) sales. 

If you entered that you sold something for $50.00 and it cost you $30.00, you would have a $20.00 gain.

The profit is Capital Gain listed on your 1040 line 7
 

@jferri57