1099-K - proceeds for personal item sales

[margin_walker]

I think I have mostly figured out how to report personal items I sold through an online marketplace, but am unsure about a few things. My 1099-K says the gross amount from my transactions in 2022 was $5830. When I get to the box that says "Enter the total proceeds for items sold at a loss or no gain", is that number supposed to include the seller fees and tax remitted by the online marketplace?

And how about when listing each sale of personal items? Is the proceeds box supposed to include the remitted taxes + seller fees? Or am I supposed to account for the taxes and fees in the option box that says "I paid sales expenses that aren't included in the sale proceeds reported on the form"?

[ErnieS0]

Yes. You can deduct expenses of sale if they were included in the Form 1099-K gross amount.

I don't see "I paid sales expenses that aren't included in the sale proceeds reported on the form"

Are you entering your Form 1099-K in this section?

1. Type 1099-k in Search (magnifying glass) in the upper right
2. Tap Jump to 1099-k
3. On “Did you get a 1099-K?" say YES
4. On “Choose which type of income your 1099-K is for," select Personal item sales
5. On “Let’s get the info from your 1099-K," fill in boxes, then Continue
6. On “Personal Items Sales,” select I sold some items at a loss or had no gain

[margin_walker]

The prompt that says "I paid sales expenses that aren't included the sale proceeds reported on the form" comes up each time after entering in information for each specific sale under the Investments and Savings section, subsection: Stocks, Cryptocurrency, Mutual Funds, Bonds, Other. 

Say for example I sold a guitar pedal for $174.60 on an online selling site. That $174.60 includes the $160 base price I listed the item for, plus $14.60 in taxes paid by the buyer and remitted by the online selling site. My net proceeds from that sale is $147.04 after the seller fees and remitted taxes. For reporting the sale of this item am I supposed to put the $147.04 and then when it prompts with the option input "sales expenses that aren't included in the sale proceeds reported on this form" do I put in the seller fees and taxes so that amount plus the $147.04 adds up to the $174.60 sale?

[margin_walker]

Also, for the box "Enter the total proceeds for items sold at a loss or no gain", I added up all net proceeds (not including seller fees or taxes remitted by the online marketplace site) for items sold at a loss or no gain, which came out to $2476.75. Is the net proceeds the correct thing to put in that box?

And in regards to the option box "I paid sales expenses that aren't included in the sale proceeds reported on the form", is the form that it is referring to the 1099-k or the list of each individual sale of personal items? 

[Vanessa A]

It depends on if the $14.60 was included on your form or not. If you did not receive the $14.60 for the taxes and it was not included in your 1099K, you would not do anything with the $14.60.  The online seller that collected the sales tax would be responsible for handling that amount. If it is included in the amount listed on your form, then yes, you would add that as a selling expense as well.

Generally, the sellers fees are included in your 1099K report, but the taxes shouldn't be.  So, your amount should be $160 that you enter .  Then you would enter as selling expenses the $12.96 in fees which would leave you with the $147.04 as income.  If the taxes have been reported on your 1099K as income to you, then you would $174.60 then deduct $27.56 as selling expenses. 

 Your cost basis of the guitar would be deducted in the cost basis box so if you only paid $47 for the guitar you would have net income of $100.04

Yes, when asking about the form, it is all referring to the 1099K you are entering the information from. 

When it is asking for total proceeds, that would be the total for all proceeds, not net proceeds. 

[margin_walker]

Yes it looks like the seller fees are included in the 1099-k and the taxes are not. Thank you for the clarification!

[margin_walker]

Ok so I've entered in each personal item sale - the date purchased, date sold, proceeds (not including seller fees), and cost basis - plus at the end of entering each sale I put the amount of seller fees and other cost expenses when prompted with the "I paid sales expenses that aren't included in the sale proceeds reported on the form" check box for each item sale.
Now I am in the Review section after finishing the State Taxes section, and it took me to a page that says "Check This Entry". 

It is a form 8949, titled 1099-B Worksheet, and the box of the "Form 1099-K reconciliation" table is checked:

"If checked, a copy of Form 1099-K with the payer and payment amount shown below has been

linked to this worksheet. Total sales proceeds reported on the Capital Asset Sales Worksheet(s)

must match the amount shown below."

Followed by "Payment(s) amount from linked Form 1099-K: $740.00". That $740.00 amount is in an editable box. What is this $740 amount referring to? Shouldn't that number be $5830, the gross proceeds listed in box 1a of my 1099-k? 

I tried changing the $740 amount to $5830 and it kept saying this section needs review and won't let me file my return. Very confusing!

[JamesG1]

You may have added an entry to your IRS form 8949 / Schedule D to put it out of balance.  Review the entries listed on IRS form 8949 / Schedule D to make sure that the income reported does not exceed the income reported on the IRS form 1099-K.

I entered an IRS form 1099-K and reported it as a personal item sale.  Then I entered the IRS form 8949 / Schedule D Capital Gain and Loss entry.  The 1099-K income equaled the IRS form 8949 / Schedule D and the entry was in balance.

Then I clicked Add another sale and entered another personal item sale for $1 income and $1 expense.  I ran Review and received the same message that you received.

So the 1099-K / IRS form 8949 / Schedule D became out of balance by the $1.

I deleted the $1 entry that I added by clicking the delete trashcan to the right of the entry at  the screen Review your xxx sales.  

I ran Review and the error was gone.

@margin_walker 

[margin_walker]

Well I ended up trying again last night before I went to bed and replaced the $740 amount with the $5830 number and it worked and let me file the return. I had double checked all my sales entries and they were all correct so I’m not sure what triggered the review