1099K

[stantonporsche]

I sold personal items on POSHMARK , Mercari and EBAY and I will be receiving 1099K from them. 

I do not want to be taxed on the items I sold because I took a loss. 

How do I file these 1099K on turbotax Deluxe

I do not care about writing off the loss and do not want to claim this income as a business

I believe it is better not to claim this as a business or a hobby

[fanfare]

if you sold  personal items you can report it on Form 8949 as follows

"personal items (1099-K)", acquired:"various", sold:12/31/2022,       14000 Proceeds, 16000 Cost, 2000 Adjustment Code "L" (personal loss) ,

  Gain or (loss)  -0-

@stantonporsche  

[Bsch4477]

You are correct that income from personal items sold for less than you paid for them is not taxed. On your return you can report the amounts on 1099-K as non business income and then create another non business income sheet reporting the same amount as a negative number explaining “1099-K income not taxable as personal property sold”.

[stantonporsche]

how will turbo tax direct you to this particular FORM 8949?

[Critter-3]

The TT program has designed a 1099-K section for this situation ... follow it  this way ... read the screen helps >>>

[NCperson]

@stantonporsche  - IRS announced yesterday taht they are delaying implementation of the new rules related to 1099k for a year..... 

https://www.irs.gov/newsroom/irs-announces-delay-for-implementation-of-600-reporting-threshold-for-t...

[stantonporsche]

For example, I got 1099-K of 20,000 of sales, multiple items about 200.  I took a loss on all 200 items. 

Where on Turbotax Deluxe do you enter these details?  there is a box to enter amount for 1099-K but there is not area  to input the details such as description item, date purchased, date sold, cost basis

I believe turbotax premier and higher allows for this but nowhere is there a place in deluxe version. 

I was told that you can go to less common income section, miscellaneous income 

input description: 1099-K personal item sales, amount of : 20,000

then add another income item:  1099-K personal item sales, amount of :   -20,000

total miscellaneous income: 0    

hence no tax is generated.   however, i believe this might create an audit because there is no information on the items you sold.    

there is one area when researching this on internet:  information needs to be generated on form 8949

only way I can do this on deluxe is through the stocks, bonds section

last question: do I need to list out all 200 items I sold? 

[stantonporsche]

For example, I got 1099-K of 20,000 of sales, multiple items about 200.  I took a loss on all 200 items. 

Where on Turbotax Deluxe do you enter these details?  there is a box to enter amount for 1099-K but there is not area  to input the details such as description item, date purchased, date sold, cost basis

I believe turbotax premier and higher allows for this but nowhere is there a place in deluxe version. 

I was told that you can go to less common income section, miscellaneous income 

input description: 1099-K personal item sales, amount of : 20,000

then add another income item:  1099-K personal item sales, amount of :   -20,000

total miscellaneous income: 0    

hence no tax is generated.   however, i believe this might create an audit because there is no information on the items you sold.    

there is one area when researching this on internet:  information needs to be generated on form 8949

only way I can do this on deluxe is through the stocks, bonds section

last question: do I need to list out all 200 items I sold? 

[RobertB4444]

If you are going to put the transactions onto the 8949 then you should either enter all of them or enter them in groups of related items (i.e., personal clothing sold, personal appliances sold, etc.).  Just make sure that the total matches the 1099-K that you received.  

@stantonporsche  

[GeorgeM777]

Before addressing your specific questions, we need to know whether the items you sold were personal property, or investment property.  Personal property are items that you purchase without intending to sell them even though you may sell them at some point.  Personal property is generally items that you use every day such as clothing, furniture, appliances, vehicles.  

Investment property is generally property you intend to sell for a profit.  While you may hold the property for months/years, your intent when you purchased it was to sell it for a profit.  However, you don't have to sell such property for a profit in order for it to meet the definition of investment property.  Investment property can be sold for a loss and reported as a loss on your tax return.

If the items you sold were personal property, then entering the information using the steps in your post is appropriate.  However, for any personal items sold at a profit, that is, for more than what you paid, you will need to pay tax on that gain.  Losses from the sale of personal items are not deductible.  Keep records of what you sold so that if you are asked to provide documentation supporting your entries, you will have such information to provide.  If you have not already done so, you might consider taking photographs of anything you sell as one form of documentation.  There are probably other forms of documentation you can collect and keep which will also be useful if you are asked to support your entries.

You are correct in that if you need to report your sales, or even some of them, as the sale of investment property, you will need TurboTax Premium. You will have to report the items individually and enter the cost basis for each, the amount you received, and TurboTax will calculate your gain or loss.   Thus, if all 200 items were investment property, then yes, you will have to enter each one as a separate item into TurboTax.   

The sale of investment property is entered into TurboTax by selecting Wages & Income, left margin, then scroll down the screen to Investment and Savings.  Select Stocks, Cryptocurrency, Mutual Funds, Bonds, Other, and thereafter begin to enter your information.  

@stantonporsche  

[stantonporsche]

They were personal items that I used and later sold at a loss. Not investment 

do I have to enter specific details on items I sold ,50+ items, on form 8949?

[DianeW777]

No.  You can enter the transactions/sales of the personal items as follows.  You must know if the holding period (one year or less = short term/more than one year = long term).

1. Add all items sold that were held short term
2. Add all items sold that were held long term
3. Select 'Something other than a date' for the date of purchase or acquired.  You can always use the 'V' for various in the date acquired. 
4. Enter two sales - long term and short term
5. Use your cost and the amount of the sale proceeds for each sale

I realize you feel confident that all items were sold at a loss however I want you to understand the tax rules when there are sales of personal items.

NOTE: One personal item or a group of personal items sold in one transaction at a gain requires the gain to be taxed. 

One personal item or a group of personal items in one transaction sold at a loss, the loss is suspended and not allowed to reduce or offset other income, even the gain on personal items sold in a different transaction.

@stantonporsche  

[stantonporsche]

So on form 8949

On one line

description of item:  “various items sold at a loss short term”.  Entered amount

Next line

description:  “various items sold at a loss long term”. Entered amount

so just two entry lines on 8949?

[Vanessa A]

Only IF ALL of the items sold at a loss.  If you sold some at a gain, you will need to add each transaction that resulted in a gain individually. So, if you sold a guitar for a profit of $500, you will need to list that separate from your items sold at a loss.

You should keep documentation of all the transactions.  If you had reported sales of $20,000 and report it all at a loss, this may raise a red flag with the IRS.  So, it would be a very good idea to have an itemized spreadsheet showing your sales and some type of cost basis, so you have documentation that all transactions happened at a loss.