1099K and Form 8949

[samiam-99]

I entered information from 1099K into tax document the same as I would enter information for a 1099Int.  The 1099K is for sales of personal property on eBay that are collectables.  I am also required to fill out Form 8949 for each sale.  How are the amounts on 1099K and Form 8949 reconcealed so as not to be doubling the income reporting when it is the same income?

Can I include a statement on Form 1040, Schedule 1, Line 8z, z18, Other, such as

"1099K Reconciled to Form 8949"

Or

Can I include a statement on Line 24Z, Other Adjustments, such as

"1099K Income Reported on Form 8949"

[JamesG1]

If you are reporting IRS form 1099-K for personal item sales, you may review your income tax return.  The income amount reported on box 1a of the IRS form 1099-K is reported only once as Proceeds on Schedule D.

In TurboTax Online, you may print or view your tax return prior to filing after you have paid for the software.

• View the entries down the left side of the screen at Tax Tools.
• Select Print Center.
• Select Print, save or preview this year's return.

I have seen that others choose to post such statements to Schedule 1.  You may post such statements.

However, there is no guarantee that the IRS will be seeing or reacting to those statements.

[samiam-99]

I spoke with IRS Tax Law Department today.  They just read the regulation exactly as it is written and do not give any guidance.

The best I can understand is that I should have not entered the 1099K into the program the way I entered any of the other 1099's.  

I deleted the 1099K entry completely and just reported all of the income on Form's 8949 with an entry for each individual item as "1099K Collectable Toys-1164".  The last four numbers are a numerical transaction Sales Record number assigned by eBay for each individual sale.

My total amount works out to the 1099K total.

I will have to wait to see if I will be audited.

[DianeW777]

It depends. Be sure to keep all of your records and review the information below before you file. The indication based on your entry would indicate this is investment sales. Be sure you selected collectibles because there are different rules for maximum capital gains specifically for this.

• Personal use property sold at a loss: personal use property loss will not be allowed, but the income will not be taxed. The sales price and cost basis should be the same.
• Personal use property sold at a gain: This is reported exactly the way you did and the gain is taxable.

If this becomes more regular and constant here is information for your use.

Below is a review of Business versus Hobby income:  This IRS link will help you: Business or Hobby?

Key elements:

1. A hobby requires you to report the income you received and under the current tax law, Tax Cuts and Jobs Act (TCJA), no expenses are allowed to be used to reduce the money collected even if you itemize deductions.
2. A business allows you to deduct the costs necessary to obtain the income.  The law explains that 'you must be engaged in the activity to produce a profit'.  The test under IRS tax law is that you must show a profit three out of every five consecutive years to be considered a business.

@samiam-99 

[samiam-99]

I have been selling on eBay for four years. 

The past three years without the 1099K being issued to me, I reported the income on Form 8949.  I use code C for Collectables and on the few that lost income, I use the code L to reflect that the loss is only attributed to the individual sale that had the loss.  I know Collectables are subject up to a 28% tax, however, the tax is based on overall income.  For myself, I stay at the 12% tax rate after adding all the 1099K sales.

These are just toys that I collected from 1978 to 2002.  I started selling them 4 years ago.  Who knew they would be worth much more money in the future?  I enjoyed them for years and now it is time to get rid of them.

I understand what you mean by being a Business.  If IRS directs me to file as a Business, then I will do so.  Most of my expenses are fully documented with eBay Reports.  The only additional expense I have is cost of item, shipping materials and shipping cost.  If I were to file as a Business, then I think there are a few more allowable deductions that would show I lost money each year.  

I am selling Capital Assets held for over 20 years, mostly for a Capital Gain, so I will see how long IRS allows me to sell my Capital Assets without filing as a Business.