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sam29000
Returning Member

1099k from eBay and prepping for 2022 taxes

I'd probably be considered a casual (not business) seller on eBay and I've started preparing for my 2022 taxes (especially now with the 1099k) because I want to make sure I have all of the documentation needed for Schedule D. When it comes to calculating the cost basis for items I sell, I want to make sure I'm getting everything correct because I don't want to trip an audit.

 

If I purchased an item for $100, paid $6 in tax and $10 for shipping - is my cost basis $100 (because that's what I paid for the item before tax and shipping) or $116 (the total amount of the purchase)? I wanted to ask because I figure it's better to be safe and understand everything up-front rather than having to explain something during an audit.

 

Also, when reporting the 1099-K from eBay on Schedule D, can I include shipping paid and eBay fees related to the items I sold? Or can I only do that if I filed a Schedule C (which I don't think I can do because I'm not a business).

 

For example, I sell an item on eBay for $100 and charge $10 in shipping (for a total of $110 - which will be reported on the 1099k). I paid a total of $100 for the item - so my theoretical profit is $10. However, on-top of the cost of the item I paid $9 in shipping and eBay fees of $13 (total of $22). So now my theoretical profit of $10 is actually a theoretical loss of $12. 

 

Would I then on Schedule D report 1099k income of $110 against 1099k COGS of $122? I just want to make sure I have everything correct.

 

 

 

 

 

5 Replies
Bsch4477
Level 15

1099k from eBay and prepping for 2022 taxes

The IRS will consider you as having a business so you will report income and expenses on Sch C. See this discussion. 

https://ttlc.intuit.com/turbotax-support/en-us/help-article/import-export-data-files/enter-1099-k-tu...

 

sam29000
Returning Member

1099k from eBay and prepping for 2022 taxes

Is that still true if the items I've sold are just random items from around my house that I want to get rid of and not items I specifically purchased for resale? 

Bsch4477
Level 15

1099k from eBay and prepping for 2022 taxes

You might consider any profit hobby income. If so, you cannot deduct any expenses. 

sam29000
Returning Member

1099k from eBay and prepping for 2022 taxes

Thanks.

 

Can I still count/deduct the original cost/purchase price of the items sold against any hobby income - provided of course that I have sufficient documentation of what I originally paid?

Bsch4477
Level 15

1099k from eBay and prepping for 2022 taxes

Beginning in 2018, the IRS doesn't allow you to deduct hobby expenses from hobby income. you must claim all hobby income and are not permitted to reduce that income by any expenses.

 

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