Form 1099-K, Not a Business, PayPal Money from Friends and Selling Personal Junk

[spfefferkorn96]

I live in MD so a 1099-K was generated and sent to the IRS for me because I exceeded $600 ($618 to be exact) with 12 Transactions. 

However, I believe that some of this $618 was 'income' where my friends repaid me or gifted me money for my birthday/christmas. The rest should have all been from instances where I sold my no longer needed personal items (Clothing, etc.). 

Do I report this 1099-K in its full $618 under Misc Income and then Zero it out with -$618 and add "1099-K Personal Property Sales" and "1099-K Personal Property Cost" and just not worry about the difference

OR should I go into my PayPal and separate out the Gift Money from the Personal Item Money? (see example below).

Example;
$xx.xx Form 1099-K Money from Friends
-$xx.xx From 1099-K Offset Money from Friends

$xx.xx Form 1099-K Personal Property Sales
-$xx.xx Form 1099-K Personal Property Cost

Total Miscellaneous Taxable Income $0

I am assuming I should go through my PayPal and separate them out, I just want to do whatever will NOT flag my tax return because this is my first time ever dealing with PayPal transactions so I'm a bit nervous.

[Vanessa A]

If the $618 was only from transfers or repayments from friends and family, and the rest of selling "yard sale items" (unless you sold them for a profit) then you do not need to enter the 1099 K on your return as none of this would be taxable income. 

Keep the 1099K and proof of what the transactions were with your return, but there is no need to include it on your return. 

[Hal_Al]

Q. Is there a place for a 1099-K on turbo tax?

A. No. A 1099-K can be for any number of reasons.  You are expected to know why you got the money (and the form) and enter it in that place in TurboTax, if it even needs to be entered

The Government rules on expanded 1099-K reporting are new this year.  We don't know what the IRS is going to do with them (they will be overwhelmed).  

But the bottom line, for now, is: there is no specific place on the tax forms to account for a  1099-K. For a detailed discussion, see this other thread here, in the forum.

https://ttlc.intuit.com/community/state-taxes/discussion/i-live-in-illinois-for-2021-my-wife-was-sel...

[spfefferkorn96]

Hello! Thank you for the quick response.

I plan on reporting it under Misc Income, because I am not a business and it was 12 transactions for the entire year. My question is just if I should separate it into chunks or just leave it as the full $618. 

In example:
$xx.xx 1099-K Money from Friends
$xx.xx 1099-K Offset Money from Friends

$xx.xx 1099-K Personal Property Sales
$xx.xx 1099-K Personal Property Cost

OR

$618 1099-K Personal Property Sales
-$618 1099-K Personal Property Cost

There is also the confusion about the fact that at least two of my transactions on my 1099-K were instances where a business refunded me for items I returned to them. So I am not sure why that is counted or how to separate that out. 

[ZoltanB45]

As mentioned, this is not business activity, nor did you profit off of any of these transactions.  I would not include this in your tax return, especially the the 1099-K you received for getting a refund. The business probably has a lot of refunded items and they sent you that for their own well being. If they are reporting a refund on their books and offsetting their revenue, it is n additional form of proof if they get audited.