BG-eBay 1099-K Reporting Clarification

[bkgrant10]

Hello, 

Turbo Tax Deluxe for Windows user here.

I sold two items on eBay for a total of $1,300 and made a $230 profit after expenses. I received a 1099‑K from eBay and entered the gross amount from Line 1a in TurboTax under Wages & Income → Income from 1099‑K. When asked, “What type of income is your 1099‑K for?”, I selected Personal item sales – Money made from selling your personal property (like concert tickets or furniture).

After entering all the required 1099‑K details, TurboTax brought me to the screen:
Personal Item Sales → “We’ve added your personal item sales. You’ll need to enter additional information for your sale in another section.”

It then asks:
“Enter the total proceeds for items sold at a loss.”

1)I sold some items at a loss or had no gain
2) All items were sold at a loss or had no gain

This is where the confusion starts.  To report the gain correctly, I have to choose “All items were sold at a loss or had no gain” so that TurboTax will let me report the gain under:
Investment Income → Stocks, Crypto, Mutual Funds, Bonds, Other → Personal Items
From there, I entered the remaining details, and TurboTax reports the gain without creating a Schedule C or triggering self‑employment tax and generated the Schedule D which appears to be the correct treatment for occasional personal‑item sales.
Given this workflow, should TurboTax consider improving the wording on the “sold at a loss or had no gain” section? As written, it’s misleading for users who actually have a gain to report. Thoughts?

[JamesG1]

To report the gain correctly, I have to choose “All items were sold at a loss or had no gain” so that TurboTax will let me report the gain.....

I am confused why an entry needed to be made at the screen Personal Item Sales.

I entered an IRS form 1099-K reporting personal item sales and reporting gross receipts of $1,300 and a gain of $230.

I was not required to select the option All items were sold at a loss or had no gain.  Neither option was selected and I clicked Continue.

I was able to complete the entry under Investment Income and Stocks, Crypto, Mutual Funds, Bonds, Other.  I was able to Review with no error reported. 

[bkgrant10]

Hi James,
Thank you for your response, great question. As a user, I initially thought I had to choose one of the two options because the system wouldn’t let me move forward without selecting something. After making a selection, I tried to go back and deselect it, but the radio button only allowed me to toggle between the two choices rather than leave them blank, so I continued through the workflow.

After starting over and following your guidance, I now see that TurboTax does allow me to leave both options unselected and proceed with the remaining steps.

I do have a follow‑up question. If I don’t select “All items were sold at a loss or had no gain”  which is what generated Schedule 1 and placed the $1,300 on the line for “For 2025, enter the amount reported to you on Form 1099‑K that was included for personal items sold at a loss” how does the IRS know which specific 1099‑K that amount relates to? Schedule D reports gains in total, not by payer. What happens if someone receives multiple 1099‑Ks from different third‑party platforms?

Thank you

[JamesG1]

I am sure that that happens.  A taxpayer receives multiple IRS form 1099-K forms and reports some amount on IRS Schedule 1 as an amount reported to you on Form(s) 1099-K that was included in error or for personal items sold at a loss.

I assume that the IRS would audit all of the income reported on IRS 1099-K forms and place the burden on the taxpayer to explain how each dollar on each form was accounted for.

[bkgrant10]

Hi James,

Thank you for responding. See a few questions in the below while reviewing

In summary, when entering a 1099‑K for a profit, the question “Enter the total proceeds for items sold at a loss” should be left blank. Click Continue, then go to:
Investment Income → Stocks, Crypto, Mutual Funds, Bonds, Other → Personal Items

From there, enter the remaining details. TurboTax will correctly report the gain, generate Schedule D, and NOT populate the line that reads, “For 2025, enter the amount reported to you on Form 1099‑K that was included for personal items sold at a loss.” That seems appropriate since the transaction resulted in a gain rather than a loss, but I’d appreciate confirmation that this is the intended behavior.

Given this workflow, should TurboTax consider improving the wording on the “sold at a loss or had no gain” section? Perhaps adding guidance such as “If you had a gain, leave this blank,” or even including a third radio button for users who had a gain. In my modest opinion, TurboTax may assume most personal item sales result in a loss, which could explain why the current language only addresses losses and not profits.

Possibly something to consider for future versions. I’d be interested in your thoughts.

[JamesG1]

If you are reporting a gain on the sale of personal items on Schedule D, at the screen Personal Item Sales, neither option should be chosen.  Click Continue.

I think your assumption is correct, most personal item sales result in a tax loss. 

@bkgrant10