How to report 1099k when items were personal items that are sold at a loss when added up

[Ryuuza]

Hi,

I received a 1099k, and the items I sold were literally all personal items I owned and sold. Overall, they would be considered a loss when added up and shipping is accounted for.

I am not a business, as I only sell a few items a month, and in this case, I just wanted these items out of the house.  I know Schedule C would make me claim all my personal items as income because they weren't bought in 2021 (which is crap, as they didn't earn money), and I'd have to unfairly pay on 1k of 'income' that isn't profitable. (I did the math already). And Hobby is worse, as I'd have to claim everything, even though most is at a loss, and when added up the total is a loss.

I know I can also do a schedule D/form 8949, but I can't claim losses on most items there either (unless I'm wrong, and I can?). And again, when added up, everything is a loss. So if I were to itemize everything, it'd show as a profit, even though overall the items were a loss, so that isn't even ideal. Plus, the 28% tax rate is awful. 

So I was wondering how I would report the 1099k. Do I just put down the items on the 8949 that made money (I say 8949 because I'm not doing a C when I'd owe on 1k I didn't really make because the items left weren't profitable but were old and can't be deducted, which kills my refund), or do I have to include ALL the items I sold, even if they didn't make any money? 

And if I do have to include all items, how do I show the ones that didnt make money as a nondeductable loss if that's how it's done (I can't figure out how to do this tbh)? Would I just list them at the same price they sold for and 0 them out that way? 

Alternatively, is there a way to show that the items all added together weren't profitable? That's actually ideal (it ends up being the total of all sold items was a $3 loss or something like that), but I don't think I can do that. 

Also, as I did do this as a business last year (I stopped because it was too much for me and not profitable), do I have to report it any special way that I stopped, or can I just submit my income as it really is now without anything? I never actually paid self employment tax because I never had to (I didn't make anything), so that isn't an issue, and I didn't have anything besides a PayPal business account I closed early last year because it was just hurting me. I was just concerned because I did a C last year and won't this year because it no longer applies.

Thanks in advance. 

[LeonardS]

If you are a one-time or casual seller on eBay then you are not a business and Schedule C Profit or loss from Business is not an option to report your sales on eBay.

To report your 1099-K from eBay and your cost of goods sold (COGS) in TurboTax follow these steps:

1. Log in to your TurboTax account if it is not open.
2. Select the Wages & Income tab.
3. Scroll down to Less common income click Show more.
4. On the page Let's Work on Any Miscellaneous Income click on Other reportable income.
5. On the page Any Other Taxable Income?  select yes.
6. On the page, Other Taxable Income enter eBay 1099-K for the description and the amount.
7. Select continue and answer No on the next page.

Next, you will have to report your COGS.  Follow these steps to report your COGS:

1. Log in to your TurboTax account if it is not open.
2. Select the Wages & Income tab.
3. Scroll down to Less common income click Show more.
4. On the page Let's Work on Any Miscellaneous Income click on Other reportable income.
5. On the page Any Other Taxable Income?  select yes.
6. On the page, Other Taxable Income enter eBay 1099-K COGS for the description and the cost of the items sold as a - amount for example  -1,200.
7. Select continue and answer No on the next page.

This process will report your gross income reported to you on the 1099-K in the first entry and then "back-out" your  COGS in the second entry.  As you are aware this is the first year of the new filing requirements for Form 1099-K and there is no one single step to report the sale and COGS if you are not a business.

[Ryuuza]

Am I canceling out the 1099k with the same number as itself, or am I supposed to add up the total cost of all the items I had, regardless of age? I just want to be sure before I go ahead and fill it out. 

[LeonardS]

Yes, you are canceling out the 1099-K using your cost or fair market value, garage sale price, for older items that are not valued at your original cost.  You can not exceed the amount on the 1099-K as this is a personal sale and no losses are allowed.

[Ryuuza]

Thanks. 🙂

One last question:

Am I including the cost of all of the items I sold, or just what didn't earn money? I just want to be absolutely sure before I do anything else. I've added it both ways already, but I'm not sure which to use.

[LeonardS]

You will include the cost of all items sold, those that earned money, and those that did not earn money.

[PleaseAddBulkEditStockTrades]

You've answered, and it is appreciated but I want to be absolutely crystal clear I understand correctly:

Sale of a dozen old unwanted household items that cost $1000 to purchase.

I sold them and eBay says I received $800 in proceeds (tangent: I assume this includes gross including shipping fees I collected?)

I report the $800 income from the 1099-K.

I then report -$800 as my cost to purchase even though it was more than that ($1000).

Is this correct? I assume I have to be able to show receipts as well during my audit in 2031.

[leland-king]

I’m pretty much in your exact same position. Personal items I sold for a loss . I got 1099k from PayPal with 20 itemize transactions. Do I had each transaction or just the total for the year (gross) that’s on line 1a of the 1099k

[DaveF1006]

No. You can report the total as a single entry in Box 1A on the 1099K. Here is how to report at a loss.

1. Go to income
2. 1099 Misc and Other Common income
3. Income From 1099 K
4. On “Did you get a 1099-K?" say YES
5. On “Choose which type of income your 1099-K is for," select Personal item sales
6. On “Let’s get the info from your 1099-K," fill in boxes, then Continue
7. On “Personal Items Sales,” select All items were sold at a loss or had no gain

@Ryuuza 

@leland-king 

@PleaseAddBulkEditStockTrades 

[leland-king]

And does this way offset the gross amount on my 1099k? 

[DaveF1006]

Yes, this will offset your gross income, making the income nontaxable.

@leland-king 

[leland-king]

Ok so should I remove the 1099k I added myself and then add it through the other income way

[leland-king]

does it look anywhere near like it should?

[leland-king]

i get this under the review portion 

[DaveF1006]

You can't claim losses on the sale of your personal property if this what you are attempting to do. You can only claim enough of a loss to offset your income.