How to record capital gains in TurboTax for revenues reported via 1099-k form?

[Texyman]

I sold a domain name for $7,500, and want to treat it as a long-term capital gain since I've had it for many years.  I transacted it on PayPal, and have received a 1099-K.  This is taxed as regular income I believe.  So how to report it as a capital gain instead?

[fanfare]

Enter on Form 8949 with step-by-step. Use Box C or F since you don't have a 1099-B.

Loss on Personal Items is not deductible so you have to enter an adjustment to cancel the loss,
the adjustment is in Col g. the adjustment code (Col f) is "L"

Gain on Personal Items is a taxable gain.

you can also adjust for expenses of sale.adjustment code is "E".

@Texyman 

[Texyman]

Thank you for your reply.  I need all the help I can get.  My thinking is constrained to TurboTax vs accounting or US tax reporting per se, since my tax reporting knowledge is rudimentary.  Thus, my dilemma is, how to reconcile this within turbotax?  The 1099-K is considered and calculated as regular income.  If I manually add Form 8949, will TurboTax then "convert" the reported amount to L-T capital gains?

BTW, I found Form 8949, but I get stuck half-way through trying to add it in TT.  Dialog says that 8949 is added automatically based up Schedule D input.  So I guess I have to find that trigger without messing things up.   I'll keep trying and will check back for any replies later.  Thanks again.

[DawnC · Accepted solution]

If you enter the sale (assuming the entire 1099-k was for this one transaction) as a capital gain, you can skip entering the 1099-K.   Just keep it with your tax records.    How to enter a capital gain - you will enter it as if you have a 1099-B form.   Personal losses are not deductible and must be indicated as such if included.   

[fanfare · Accepted solution]

Schedule D input is really 1099-B input.

see under stocks and other investments.

Start transaction entry then tell TurboTax you don't have a 1099-B.

Your category is F for long term holding period with no 1099-B

in description put "1099-K personal item - domain name" or similar as you wish.

@Texyman