Hobby Income and Expenses for selling trading cards won from tournaments at a loss

[acewonder87]

I play in Magic the Gathering tournaments, which cost money to enter. The prizes for these events are trading cards, never money. Whenever I win some cards, I sell them online. I haven't sold enough to get a 1099-K form, so I believe I need to enter it manually.

I don't intend to (and I don't) make a profit from doing this; I merely do so to lower the cost of playing. That, and other tips I have found in Turbotax's "Hobby Losses" help section tell me that this should be classified as hobby income.

After doing some calculations,  I found the amount I spend entering tournaments and shipping sold cards, and the amount I make selling the cards I get from them. I confirmed I make a loss doing this (as I expected).

When I try to enter those two numbers in Miscellaneous Income > Hobby income and expenses > Income not on 1099-K and Expenses, I get a warning that says "Expenses cannot be greater than income".

At face value, this seems plainly incorrect. Of course hobby expenses can be greater than hobby income! What am I supposed to do in that situation?

Does the "Total hobby income not on 1099-K" box actually meant to hold receipts minus costs, which in my case would result in 0? If so, then why is there a separate box for expenses?

Or, do each of these boxes mean something else that I'm not considering?

[Bsch4477]

For a hobby you have to report all income and can’t deduct losses or expenses.  I have asked myself the same question about why TurboTax has a hobby expense field. 

[Mike9241]

@Bsch4477 They were deductible on schedule A, limited to hobby income, and subject to the 2% reduction for years before 2018. Unless the law is changed when the TCJA expires in 2025, they will again be deductible. It's probably better (cheaper) to leave the coding in than take it out and then may have to reprogram for 2026.

just look at the mess Turbotax has with K-1s (at least with partnership ones) where certain codes require supplemental info but there is no screen presented to enter this. Fortunately, I use desktop so can go into forms mode to enter this supplemental info 

[acewonder87]

So, do I take this to mean that the "Total hobby income not on 1099-K" field should contain profit ($0 if there is a loss) rather than revenue, and that the "Total expenses" field is redundant and should be ignored?

[MarilynG1]

Yes, that is correct.  Unless you enter the same amounts for Income and Expenses.

@acewonder87