Can i claim someone as dependent if her 1099k box 1a is greater than $4050, but her income paid to her was only $3200.

[Coleen3 · Accepted solution]

For a dependent, it is the gross income of the business, not the net profit. See below for manufacturing business.

Gross income.

Gross income is all income you receive in the form of money, goods, property, and services that isn't exempt from tax. If you are married and live with your spouse in a community property state, half of any income defined by state law as community income may be considered yours. For a list of community property states, see Community property states under Married Filing Separately, later.

Self-employed persons.

If you are self-employed in a business that provides services (where products aren't a factor), your gross income from that business is the gross receipts. If you are self-employed in a business involving manufacturing, merchandising, or mining, your gross income from that business is the total sales minus the cost of goods sold. In either case, you must add any income from investments and from incidental or outside operations or sources.

https://www.irs.gov/publications/p501#en_US_2017_publink1000220691