1099-K Reconciliation Error/Review

[lombeezy]

Hey everyone I'm still stuck at this "review"

I entered all my previous sales and still receive this error on the 1099-B worksheet that the number is not matching.

-I rounded down my 1099-K 1a down to the nearest dollar ($11,001)

-I rounded also the "Personal Item Sales" - "I Sold some items at a loss or had no gain." ($796.00)

The number at the 1099-K Reconciliation box matches my total proceeds minus my loss $10,205.00.

So my question is why am I still getting this review?

[KrisD15]

Proceeds need to match proceeds. 

You need to make that number match total proceeds only. The loss was already subtracted when you entered 796 on the first screen. 

On the snip below, you should show a total of 10,205 in Proceeds (in the blue box)  if your 1099-K was 11,001 and 796 doesn't count. 

Proceeds are NOT the same as profit. 

You sold for 10,205, but what did they cost you to purchase before you sold them? 

In the example below, we needed to account for 1,098 proceeds. 

[lombeezy]

Ok so this number 10,875.06 is suppose to match the 10,205.00?

[JamesG1]

Correct, the proceeds are to equal $10,205.  You will enter purchase date, sales date and original cost, all the elements that the IRS form 1099-B needs to report.

[bwent3]

It's not intuitive but, to make it pass the review, for the transactions that had no gain (meaning a loss or sold at face value), I had to enter the proceeds as being $0. I assume this is because the number they're trying to match is after the gross value of the proceeds for items sold for no gain is subtracted from the total proceeds amount on the 1099-K form. I would have expected each transaction to be entered with its actual proceeds amount and the program would have ensured the proceeds of those sold for no gain equaled the gross amount entered.

[KrisD15]

Each transaction/sale that resulted in a gain DOES need to be entered. 

Transaction that result in a loss are not reported for personal items, that's why they are subtracted off the 1099-K first. 

Only enter the amount of proceeds that were NOT at a gain, then list the sales for the remaining amount.

Example, 1099-K reports $700. You sold and received $500 for things you sold at a loss. You enter 500 in that first section.

Now you need to show what you received $200 for selling. 

You switch to the other section, enter the sales. 

Example, you sold one thing for $200, you list 200 proceeds, this thing cost you $120 when you bought it, so you made $80 taxable income. 

If you entered Zero, how are you reporting the gain? 

[bwent3]

I entered $0 for the sales that did not have a gain and the actual proceeds for those that did have a gain. That's what's not intuitive about the process. It sounds like you're not supposed to enter the sales that didn't have a gain. Why wouldn't you enter ALL transactions, those with a gain and those without? When you do that right now, the application is able to determine that there's a $0 gain for the sales at a loss, but it's unable to correctly match the transaction proceeds with the proceeds reported on the 1099K.

[KrisD15]

The reason is this-

A business (or Trader) can report losses, and gains, for sales of products or stock.

An individual selling their things are not allowed to claim loss on sale of personal items, but they do claim, (and pay tax) on items they sell at a gain. 

The difference is personal versus business. It the way the IRS/Congress wrote up the tax laws.

A person buys and then later sells their cars at a loss, but that is not a loss they can claim on their taxes. 

If a person buys a car and it becomes a classic, so they end up selling it at a gain, that gain is taxable income.

According to the IRS:

Personal items sold at a loss
A loss on the sale of a personal item can't be deducted from your taxes. But you can zero out the reported gross income so you don't pay taxes on it.
If you sold personal items at a loss, you have 2 options to report the loss:
Report on Schedule 1 (Form 1040)
You can report and then zero out the Form 1099-K gross payment amount on Schedule 1 (Form 1040), Additional Income and Adjustments to Income PDF.
Example: You receive a Form 1099-K that includes the sale of your car online for $21,000, which is less than you paid for it.
On Schedule 1 (Form 1040):
• Enter the Form 1099-K gross payment amount (Box 1a) on Part I – Line 8z – Other Income: "Form 1099-K Personal Item Sold at a Loss, $21,000"
• Offset the Form 1099-K gross payment amount (Box 1a) on Part II – Line 24z – Other Adjustments: "Form 1099-K Personal Item Sold at a Loss $21,000"
These 2 entries result in a $0 net effect on your adjusted gross income (AGI).
 

[spfanok]

I'm having the same issue here. So just to fully confirm -- you enter the 1099-K  with the total amount listed (lets say $10,000), then when it asks what amount of proceeds were sold at a loss you enter the requisite amount (let's say $8,000). That leaves you with an amount of proceeds that were sold at a gain ($2,000). And once it prompts you to enter your transactions one by one, you ONLY enter the individual sales sold at a gain that amount to the total ($2,000 from my example). And items sold at a loss should NOT be entered individually? Hoping to confirm before I delete all the transactions I input, as that took forever.

[DianeW777]

Yes, you are correct in theory. My advice would be to create two separate entries either by creating two 1099-Ks. One would be for your sales that resulted in gains, the other would be the sales that resulted in losses.

1. Gains: Enter the full amount of the sales for these items, then enter the cost basis
2. Losses: Enter the full amount of the sales for these items, then enter the same amount as the cost basis resulting in zero loss

Or an entry for sales of personal property that resulted in gain in the investment section using the steps below. 

To enter your sale in TurboTax, follow these steps. Click this link for more information. Where do I enter Investment Sales?

1. Open or continue your return.
2. Navigate to the investment sales section:
   • TurboTax Online/Mobile: Go to investment sales. If using this application, make sure it is open
   • TurboTax Desktop: Search for investment sales and then select the Jump to link. 
     • Or Personal Tab > Continue > I'll choose what I work on > Scroll to Investment Income > Select Stocks, Cryptocurrency, Mutual Funds, Bonds, Other
3. Answer Yes to the question Did you sell any of these investments in 2024? (or Okay! to Time to kickoff your investments!).
   • If you land on  the Investment sales summary or Your investments and savings screen, select Add More Sales or Add investments.

@spfanok