Where to enter cost of goods to offset consignment store 1099-Misc Lines 3 'Other Income'

[Hurricane150]

So, cleaned out my closet, and got a 1099-Misc, but can't figure out where in TT to offset the income as reported in the 1099-Misc with my original purchase cost.

Does anyone know exactly the path to find this?  This is my first time with this, so I'm a little confused.

Thank you!

[Bsch4477]

You don’t offset your income from the sale of personal items. If you sold them for less than you paid the income is not taxed. After reporting your other income report other income again with a negative value with “personal items sold less than cost “.  

[KrisD15 · Accepted solution]

After you enter the 1099-MISC and answer

No, not like work

No, not intent to make money

Only received this one tax year

The income should show on your Schedule 1 line 8z

Next, go back to Income

Less Common Income

Miscellaneous Income, 1099-A, 1099-C     START or UPDATE

Scroll down to "Other reportable income"   START or UPDATE

Select "Yes" for "Any Other Taxable Income?"

Type a description such as "Personal items sold reported on 1099-MISC" 

Enter the same amount as the 1099-MISC as a negative number (put a - in front of the number)

(Note: DO NOT ENTER A LARGER NEGATIVE NUMBER THAN WHAT WAS REPORTED ON THE 1099-MISC You cannot take a loss on the sale of personal items)

Finish this interview

The amount on the 1099-MISC as well as a negating amount will both be reported on Schedule 1 line 8 to result in zero income. 

@Hurricane150  

[Hurricane150]

All,

Thank you so much on this - this seemed to handle the issue on my Federal, but I think this is getting included as income in my state (NJ) taxes, and I don't see the offset of the cost of goods (although maybe it's buried somewhere?).  If anyone knows if there is something additional I should do, that would be appreciated.

[MonikaK1]

You can view your entire return or just your 1040 form before you e-file to see how your taxes were calculated and to preview the forms that TurboTax has prepared from your entries:

1. Sign in to your TurboTax account
2. Open or continue your return
3. Select Tax Tools from the menu (if you don't see this, select the menu icon in the upper-left corner)
4. With the Tax Tools menu open, you can then:
   • Preview your entire return: Select Print Center and then Print, save or preview this year's return (you may be asked to register or pay first if you choose this option)
   • View only your 1040 form: Select Tools. Next, select View Tax Summary in the pop-up, then Preview my 1040 in the left menu

Tax Summaries of any State returns are also shown in the left menu.

You would need to pay for your product in order to see the entire state tax return.

If you confirm that your state tax return didn't include the negative figure you entered to back out the income on Form 1099-MISC on your Federal return, go through the New Jersey questionnaire again until you find the screen where you can enter adjustments to New Jersey income.

[Hurricane150]

Hi,

Thank you for replying - the issue is that if I enter a negative amount in my state return, it gets rejected when I try to file - as it can't be a negative amount.   I can't edit the positive amount already there as TT brings it in from the Federal and won't let me change it?

Thanks!

[Bsch4477]

What state are you in?  Most states start the tax calculation with the federal AGI which already includes that negative amount so you would not have to enter it in your state return. 

[Hurricane150]

I am in NJ - and I think it didn't bring it over from the Federal because it was negative (so I had a positive in one place, and a perfectly offsetting negative in another place, and NJ just took the positive).  I wanted to be sure I entered it, as it is a filed form, but I'm not actually claiming any 'income' off of this.  

Thank you!

[Bsch4477]

Try this. 
You can report the amount in Part 1, Line 8z, Other Income of Schedule 1, Addition Income and Adjustments to Income and also report the the non-taxable amount in Part 2, Line 24z, Other Adjustments of the same form. This process adds an amount to your income and then subtracts an amount from your income while at the same time accounting for the amount shown on the 1099-K on your tax return so that it matches the IRS records.

[DawnC]

Click through the screens in the NJ interview.   You will come to a screen titled Other Non-Wage income.   Your 1099-MISC should be listed there, and you can remove it on that screen or add the negative amount.   The net should show on your NJ return on Line 26.

[Hurricane150]

Would there be any issue in that my federal has already been submitted?  Ie, should I make a note of this for next year, but leave it as is for now?  It is not a hugely material number.

Thank you so much for responding on this.

[Hurricane150]

DawnC 

Thank you - this is where I had tried to enter the negative amount and it got kicked back.  If I try and remove the entry already there, it just puts it back in.  Is there something I have to hit to let TT know that I am deliberately making this change?

[Hurricane150]

Ah-hah!  I figured it out, I went into the form view and was able to remove it there.  

Thank you both so much - and I hope you all are able to take a break very soon, I'm sure this is the 'GO' weekend for you.