eBay 1099-K Selling Personal Items How to Access Schedule 1 Line 24z

[kathyc21]

For those of us who receive a 2022 1099-K for selling personal items (such as on eBay), the IRS has specific instructions:  https://www.irs.gov/businesses/understanding-your-form-1099-k

Specifically, this section: 

If you receive a Form 1099-K for a personal item sold at a loss, report the information on Form 1040, Schedule 1, Additional Income and Adjustments to Income with offsetting transactions. For example, if you receive a Form 1099-K for selling your couch online for $700 you will report:

• Part I – Line 8z – Other Income – Form 1099-K Personal Item Sold at a Loss $700
• Part II – Line 24z – Other Adjustments - Form 1099-K Personal Item Sold at a Loss $700

The net effect of these two adjustments on adjusted gross income would be $0.

I have tried unsuccessfully for several hours in TT Deluxe to figure out how to get to Line 24z on Schedule 1.  I've seen that the question has been asked in past years, and members have been told to use offsetting amounts for Other Income, which show up on Line 8z.  But given the specific IRS guidelines, this no longer seems right. 

Any ideas how/if we can access Line 24z?

[SantinoD]

Follow these instructions provided by @DaveF1006

To enter:

1. Go to wages and income>less common income. 
2. Go to Miscellaneous Income, 1099-A, 1099-C
3. Go to Other reportable income
4. In the description field, enter 1099k income. Paypal receipts for return of capital. put in the amount of the 1099K.
5. After entering this, there will be a summary page that appears.  Select add another miscellaneous income item. 
6. Here put in the description 1099K is for the return of my investment. There was no income earned and enter a negative number for the amount of the 1099K. 
7. What this does is show the positive and negative amounts on line 8Z, which cancels out the income. 
8. Be specific in your description fields for both of the miscellaneous income entries so the IRS will see how you justify this isn't taxable income. You will to make clear that this is for the return of your capital and that none of it is PayPal income.

Original post: How do I enter something on Schedule I, Line 24z?

[kathyc21]

Thank you, @SantinoD for the thorough response.  I had actually found that thread when I was searching for an answer.  And while having offsetting amounts on Line 8z might be an acceptable workaround, it is not exactly what the IRS guidelines specify.  That's why I was asking the question - I had hoped to be able to report exactly as the IRS has specified, with the total sale amount on Line 8z and the offsetting number on Line 24z.

[SantinoD]

The way TurboTax is set up, it doesn't allow you to enter directly into the Forms.  The instructions on the IRS website are very specific to Forms and lines but most Tax preparation software (especially self-prepare software like TurboTax) uses interview-style questions to help guide you so the numbers are placed in the correct Forms and lines.

[MichaelG81 · Accepted solution]

Yes, you have the right idea; but there isn't a way to access Line 24z (unless you override causing issues and it may not let you e-file). As per the ‌revised IRS instructions, Form 8949 is used in this case. Proceeds/losses from “sales of personal items” are reported on Form 8949. Whether it is one personal item or more sold, it'll go to Form 8949.

There was a revision on January 27, 2023, from the IRS regarding the reporting of 1099Ks, with losses from sales of personal item(s) reported to the taxpayer on form 1099K. It states to either report on Form 8949 as done, or Schedule I lines 8z and 24z, as applicable.

Again, since it is Personal Items, in TurboTax it's correctly reported on Form 8949. First, enter your 1099K, after you enter your Box 1a gross amount and payer select continue. Select “Learn More” for instructions to enter your cost basis and proceeds in another section for your losses/gains (see instructions below). 

We’ve collected your 1099-K information, but you’ll need to add more info about your sale in another section. For TurboTax Online:

1. Select Continue on this screen.
2. On the Your 1099-K Summary screen, select Done.
3. From the Income Landing table, navigate to Investment topics, and select Start or Revisit for "Stocks, Cryptocurrency, Mutual Funds, Bonds, Other (1099-B).
4. Go to Investments and Savings (1099-B, 1099-INT, 1099-DIV, 1099-K, Crypto) on the Income & Expenses screen. Select Edit/Add. 
5. On Your Investments and Savings Summary screen, you’ll see a line item for your 1099-K income. Select Edit or Review and enter the information for the first personal sale item.
   • Be sure to select Personal Items under the What type of investment did you sell?
   • The Cost or other basis amount should be the amount you originally paid for the item.
6. Select Continue when you’re finished to go to the Review your Sales screen.
   • If there was more than one personal item sale included in the 1099-K amount, select Add another sale to add each item.

If you sold your personal item(s) for a loss, that loss cannot offset other income on your tax return like capital loss items (stocks).

If you sold your personal item(s) for a gain, then you’ll need to pay short or long term gains tax on it, depending on how long you held the item. This is why you should enter each item separately and not net them together.

@kathyc21

[Opus 17]

@kathyc21 

Basically, turbotax is broken, and line 24z doesn't work.   You can use the alternative procedure (which will zero out the income, but in a different way than instructed by the IRS), or you will need to look for an alternative tax prep service. 

[kathyc21]

Thank you, @MichaelG81 .  Although I wish there was a less tedious way to report, I am glad to see that I have an option to follow IRS guidelines on this.  I appreciate the thorough response.

[WillieP1]

Which version of TT do these instructions apply to please? I have TT Deluxe desktop, and I am unable to follow these. I have entered my 1099-K, but if I go through Stocks, Mutual Funds, Bonds, Other TT creates at 1099-B and a Schedule D. Personal items I sold on ebay and made a gain increase my refund. Most of the items I sold were at a loss though. I sold 96 personal items on ebay last year. Any help on how to enter these into TT Deluxe is appreciated!

@MichaelG81

[WillieP1]

Correction: items I sold at a loss increases my refund, and the gains reduce it.

[RobertB4444]

The items that you sold at a gain should decrease your refund.  You made money on the sales.  Items you sold at a loss are not allowed to increase your refund - you are not allowed to take a loss on the sale of personal items.  You can either classify them as code L (loss not allowed) or you can enter the cost of the items you sold as the exact same as the sale price so there is no loss shown.

If the sale of your personal items is treated as a lump sale, like a garage sale, then you can total up your income and expenses and if the loss total is greater than the sale price total then you can enter it that way and while the loss is still not deductible at least you would not show any gain.

@WillieP1 

[WillieP1]

Thanks, I understand that. My problem is that I cannot find instructions on how to enter my 96 items sold into TT Deluxe Desktop, correctly. I did have a gain for a few items, but most were sold at a loss.

I did see a post that showed a checkbox to select loss from sale is not deductible, so that code L shows in the form 8949. So I think that is OK. I'm just not sure I am doing it right.

It would be really helpful though to have detailed instructions, on how to enter the 1099-K ebay sold items into TT Deluxe Desktop. If anyone has any or knows where to find any, I would appreciate it!

@RobertB4444 @MichaelG81 @SantinoD @Opus 17 

[JamesG1]

The IRS form 1099-K should be reported because the IRS will be receiving a copy of the 1099-K.  

Personal items sold for less than their basis (most likely, the original purchase price) report $0 capital gain on line 7 of the Federal 1040 tax return.

Personal items sold for more than their basis report the gain on line 7 of the Federal 1040 tax return.  See this example.

                                              Selling                   Cost

                                              Price                      Basis

Couch                                   $500                       $2,000                  Capital loss on personal item = $0 loss

Jewelry                                  $400                       $300                     Capital gain on personal item = $100 gain

Chair                                      $100                       $100                    No capital gain or loss

                                                $1,000                   $2,400

Schedule D will report a $100 long term capital gain.

Federal 1040 tax return line 7 reports $100 long term capital gain. 

To report Personal item sales in TurboTax Desktop, follow these directions.

• Click on Start to the right of Income from Form 1099-K.
• Select Personal Item Sales.  Click Continue.
• Enter 1099-K information.   Click Continue.
• At the screen Personal Item Sales, you are told that further information will need to be entered.  Learn More provides detailed information for the next steps.  Click Continue.
• At the screen Your 1099-K summary, notice that the income relates to ‘Sale of Personal Items’.  Click Done.
• Click Start to the right of Stocks, Mutual Funds, Bonds....
• At this screen, you will be asked to Edit the Personal item sales (1099-K).
• At the screen Select any less common adjustments that apply, select Any loss from this sale is not deductible....  Continue.
• At the screen Here's all the sales reported...., Click Add to add additional lines as needed.

The entry will be reported:

• on Schedule D of the Federal 1040 tax return, and 
• on line 7 of the Federal 1040 tax return.

Capital loss for a personal item sale reports $0 capital gain on line 7 of the Federal 1040 tax return.

Make sure that you retain any information about the items sold should you be required to demonstrate to the IRS that this is not taxable income.

[stantonporsche]

enter it manually ? go to forms in turbotax deluxe 

[stantonporsche]

so this is how information is populated on Schedule 1 of 1040 

1. Go to Miscellaneous Income, 1099-A, 1099-C
2. Go to Other reportable income

but does it matter if there are no details on item sold 

recent revision IRS Jan27th 2023 : It states to either report on Form 8949 as done, or Schedule I lines 8z and 24z, as applicable.

you would think putting on form 8949 might be better because it list out the details but schedule 1 does not .

wonder if you did both 

[JamesG1]

See this example of personal items sold reported on IRS form 8949 / Schedule D Capital Gains and Losses.

Personal items sold for less than their basis (most likely, the original purchase price) report $0 capital gain on line 7 of the Federal 1040 tax return.

Personal items sold for more than their basis report the gain on line 7 of the Federal 1040 tax return.  See this example.

                            Selling        Cost

                              Price        Basis

Couch                   $500               $2,000        Capital loss on personal item = $0 loss

Jewelry                 $400               $300            Capital gain on personal item = $100 gain

Chair                     $100               $100            No capital gain or loss

                               $1,000           $2,400

Schedule D will report a $100 long term capital gain.

Federal 1040 tax return line 7 reports $100 long term capital gain. 

To report Personal item sales, follow these directions.

• Down the left side of the screen, click Federal.
• Down the left side of the screen, click Wages & Income.
• Click Show more to the right of Other Common Income.
• Under Your income and expenses, click the Edit/Add button to the right of Form 1099-K.
• At the screen Did you get a 1099-K? click Yes.
• At the screen How would you like to enter your 1099-K? click Type it in myself.  Click Continue.
• At the screen Choose which type of income your 1099-K is for, select the button for Personal item sales.  Click Continue.
• At the screen Let’s get the info from your 1099-K, enter the information.      Click Continue.
• At the screen Personal Item Sales, you are told that further information will need to be entered.  Learn More provides detailed information for the next steps.  Click Continue.
• At the screen Your 1099-K summary, notice that the income relates to ‘Sale of Personal Items’.  Click Done.
• Under Your income and expenses, click the Edit/Add button to the right of Investments and Savings (1099-B, 1099-K….)
• At this screen, you will be asked to Review the Personal item sales (1099-K).

At the screen Now, enter one sale…., answer questions about the personal item sale.  Click Continue.

The entry will be reported:

• on Schedule D of the Federal 1040 tax return, and 
• on line 7 of the Federal 1040 tax return.

Capital loss for a personal item sale reports $0 capital gain on line 7 of the Federal 1040 tax return.

@stantonporsche