Where do I write off Obsolete Inventory which I have either trashed or donated ? Thank you.

[M-MTax]

@ABALLIETT BTW why don't you plug these numbers into TTX and see what you get? I'll bet you'll be surprised to see you owe nothing.

[ABALLIETT]

Thanks for you patience, Hal_Al 

What I'm asking this time is how do I handle non sale 'payments' that are on my 1099k but that I did not 'profit' from 

For example, I do lots of environmental non-profit work I do a podcast and have substantial publishing changes (libsync) that a non profit is obliged to pay for since I work for free but they expect me to be the go between for my acct with the service provider. So they send me a few $300 checks a year and I pass that money to libsync in a separate payment transaction

Those $300 payments show up as 'income' on the 1099k, although they aren't even my money. 

How do I remove them from the official 1099k total? (I think you showed how to do that and I was just asking if you still believe that method is accurate and dependable) 

Thanks

[Hal_Al]

From the other thread ( https://ttlc.intuit.com/community/taxes/discussion/re-1099-k-from-paypal-and-i-don-t-have-a-business...

Q. Is there a way to do enter a 1099-K without claiming it as  income?

A. Yes. You have to use a workaround in TurboTax.

Notice that there is no specified place, in TurboTax (TT) for a 1009K.  That's because you are supposed to know what the income is for.

In TurboTax (TT), enter at:
- Federal Taxes tab (Personal in  Home & Business)

 - Wages & Income

Scroll down to:

-Less Common Income

      -Misc Income, 1099-A, 1099-C

       - On the next screen, choose – Other reportable income  

       - On the next screen, click yes

       - On the next screen, you'll get blanks to enter the amount and a description. It will go on line 8 of Schedule 1 as "Other Income".  Suggestion for description: Amount reported on 1099-K 

When that's done, do it again (a 2nd entry).  This time make it a negative entry; put a minus sign (-) in front of the amount. Suggestion for description: 1099-K offset: Taxable portion reported elsewhere on forms

[Hal_Al]

Q. How do I remove them from the official 1099k total? Is that method is accurate and dependable? 

A.  Yes, that is essentially the method, most people, here in the forum, recommend using when you get a 1099 (of any sort) that you believe to be inaccurate and you can not get the issuer to correct it.  But, it's only a workaround.  It's neither an IRS or TurboTax approved method.

Notice that there is no specified place, in TurboTax (TT) for a 1009K.  That's because you are supposed to know what the income is for.

 You have now identified several types of income being reported on your 1099-K.   Some of it  should be reported (gains on the sale of personal property and/or collectibles).  The IRS gets a copy of that 1099-K.  $30,000 may be enough to get their attention.  Reporting it this way may or may not head of an IRS inquiry, but it most likely better than just leaving it off.

[ABALLIETT]

Thanks once again. 

I've been rolling through the PayPal 1099k and see that I have about $600 in informal sales of vegetables from my backyard.  I can more than offset this income with documentable expenses 

Is this a 'other income' issue? And is there a place in the 1040 to enter the expenses or do I do these adjustments on a sheet of paper that I hold onto for 'the audit' I guess this isn't the way I'd want to go. 

I assume it's ok to split up the 1099k gross figure into various topics (ie schedule D, other income, not actually income ) as long as the separate entries add up to the 1099 gross (?) 

Definitely do not want to pay taxes on the vegetable income since I lost plenty of money in the garden as it is 😉 

Thanks for your consideration

[Hal_Al]

Q. Is this an 'other income' issue? 

A. Yes. Again, you decide whether it is a hobby or self employment and report it accordingly.  If self employment, you deduct all ordinary and necessary expenses.   If hobby income, your deduct only COGS.

Q. And is there a place in the 1040 to enter the expenses or do I do these adjustments on a sheet of paper that I hold onto for 'the audit'.

A. There is no IRS  form to show COGS, other than Schedule C, for self employment income.  So, yes,  you do those adjustments on a sheet of paper that you hold onto for 'the audit'.

Q. I assume it's ok to split up the 1099k gross figure into various topics (ie schedule D, other income, not actually income ).

A. Yes.

Q. Do these separate  entries have to add up to the 1099 gross ? 

A.  No.  It would be nice if they did,  but there's no where to show COGS.  So, you will only be reporting  net income, and your total entries will not match the 1099-K.   If you decide to use the "workaround" described above, that may help stave off an IRS inquiry.

[ABALLIETT]

Thanks for this, Hal_Al

[ABALLIETT]

MartinMarks - I see what you mean about long term capital gains and favorable rates. Thank you so much for pointing this out to me! (Yes, my gross income is WAY below $80k) 

I'm not clear where to enter the 1099-k info, however. in my turbotax application I assume its the choice in sale of investments that's listed right under "collectibles' Its something like "personal investments'  That made sense the first time I arrived there but as I reviewed it it seemed to be more stocks and bonds oriented than 'things I found in my basement' related. 

Where should I be putting that 1099-K total of personal items sold?

Thank you so much (and thanks to everyone who has supported me in trying to understand how to handle my situation)

[ABALLIETT]

Can someone help me with this? 

[ToddL99]

Enter the 1099-K under "Other Reportable Income", and then enter the "cost" of the items sold under "Other Reportable Income" - as a negative number. 

To report the income:   

• Type "other reportable income" in the search window (or in the Search Topic window for desktop versions)  

• Click on "jump to other reportable income  (or "other reportable income" in the Search Topic results)  

• Answer "No" to "Did you receive any other wages?"  

• Select "Other reportable income" from the Miscellaneous income list  

• Select Add another Income item  on the Other Miscellaneous Income Summary screen  

• Enter a Description (1099-K Personal Sales) and the amount reported,  then click on Continue  

The amount will be reported on line 8 of Schedule 1 (Form 1040).  

To enter the adjustment:    

• Type "other reportable income" in the search window (or in the Search Topic window for desktop versions)  

• Click on "jump to other reportable income  (or "other reportable income" in the Search Topic results)  

• Answer "No" to "Did you receive any other wages?"  

• Select "Other reportable income" from the Miscellaneous income list  

• Select Add another Income item  on the Other Miscellaneous Income Summary screen  

• Enter a Description (Cost of 1099-K Personal Sales) and the amount as a negative number,  then click on Continue  

A corresponding negative amount will be entered, and line 8 of Schedule 1,  will be zero.  

[Hal_Al]

The cost of each personal  item cannot be more than the amount it sold for.  That is you can not claim a loss from this activity.

[ABALLIETT]

Hope someone has the time to help me on this one. I started out entering my 1099k as LONG TERM CAPITAL GAINS. It showed up on a schedule D in my 1040 stuff. 

Now I'm going to handle that 1099k income as 'other income' as advised but I haven't found anyway to delete the figures that are showing up on the Schedule D (which is very important since the figures are NOT accurate. ) 

I've 'deleted' the Schedule D and I get 'this will destroy all data' type info that makes me think its really working but, now, it's still showing up on page 1 of my 1040 as Schedule D 'income'

How can I delete my erroneous 'long term capital gains'? I'd hate to start the form all over again. (especially at this point ;-(

Thanks

[ABALLIETT]

OK. I found out about deleting 1099-B and Form 8949 before deleting Schedule D. Unfortunately, alt ought Schedule D is gone from page 1 of 1040 my Taxes Due amount didn't change, which is weird because by deleting Schedule D I literally deleted 20,000 from my income.

I have restarted Turbotax but the Tax Due fields remain the same. 

I'll probably start a 2nd 2020 1040 for my sanity.