1099K PayPal Mixture of Payments

[jko_aus]

Hello,

I'm at a bit of a loss right now with the 1099-K I've received from PayPal -- I fully understand 1099K reporting based on my experience with eBay personal sales, where my entries match perfectly, and account for item costs.

That said, my PayPal 1099-K has a mixture of:

1. Items sold for a short term gain (personal sales)
2. Items sold at a loss (yes, I know I cannot report them as a loss as they are personal sales)
3. Payments for Class Action Settlements via PayPal
4. Single payment from FanDuel (Online gambling)

I've entered all of my entries for items sold, but cannot for the life of me figure out how to enter separate amounts for the class action suits/Fan Duel payment (based on items #3/#4 on the list). Sadly, items 3/4 are preventing me from submitting my return, and only account for 10% of the overall 1099K. Based on my reading all of the 3/4 items are taxable.

Turbotax Deluxe 2022 is kicking out an error: 

Amount from Form 1099-K has an amount from linked Form(s) 1099-K, but the sales proceeds on this worksheet don't match the payment amount from Form 1099-K. Add sale(s) on this worksheet with sale proceeds to match the amount reported on Form 1099-K.

It seems like I could enter them as short term gain sales in the worksheet, which I believe would be at the same tax rate, but would rather do this right to have them not reflected as sales.

Without reconciling the difference, I can't get passed the 'Check this Entry' error pasted above. How do I fix this?

Thanks!

[AliciaP1 · Accepted solution]

You cannot import a 1099-K that has split income reasons.  To get around the error, you will need to delete the 1099-K that was imported and verify or manually re-enter your different 1099-K income sources.

To delete a specific form in TurboTax Online you can follow these steps:

1. Within your return, click on Tax Tools in the black menu on the left side of the screen.
2. Click on Tools.
3. Click on Delete a Form. 
4. Scroll down to your form and click Delete.
5. Under Federal in the black menu bar click Wages & Income to get back into your tax returns.
6. Proceed entering/reviewing your return.

To do this in TurboTax Desktop you can follow these steps:

1. Within your return, click on the Forms icon in the upper right of the screen to switch to Forms mode.
2. Scroll down in the menu bar on the left and select your form.
3. Click the Delete Form button at the bottom left of the preview screen.
4. Confirm the deletion then click the Step-by-Step icon in the upper right of the screen.
5. Proceed entering/reviewing your return.

To enter your 1099-K see How do I report a 1099-K if I don’t own a business? for more details to re-enter your form.

[jko_aus]

Hi - I’m not really sure how the linked article fixes my problem other than deleting a 1099K. Can you please explain how I should be proceed with this?

[RobertB4444 · Accepted solution]

@AliciaP provided you with this link above to help with entering your 1099-K.  The linked article has links to business income advice and sales of collectibles.

In your case you have three types of income.  I recommend entering the personal sales as sales of personal property under investment income.  Just remember that your losses are only allowed up to the amount of the sales.

The class action income is entered as "Other Income" down at the bottom of the income section in TurboTax.  It has a space to describe the type of income and you'll just enter "Class Action Settlement".  

The gambling payout you don't say whether it is gambling winnings or just a return of what you had paid in to the gambling site.  If it's gambling winnings then you need to enter it into the section for that.  If it is a return of your paid in money then you have two choices - leave it off or enter it twice under "Other Income".  Enter it once as a positive number with "Return of money paid in" as a description and then a second time as a negative amount with the same description.

Keep all of your records proving what all of this stuff is.  This is all really new for us and for the IRS and we just honestly don't know how they're going to handle or react to all of this.  They normally look to make sure that the numbers on your tax return match the 1099s that you've received and in the case of these mixed 1099Ks that simply isn't possible.  So cover all your bases and be prepared to deal with a letter from the IRS if you get one.

@jko_aus