It depends.
If you sell as a business, and file schedule C, you would calculate your gain and loss on Schedule C. The items sold are not Business assets, they are inventory.
If you sold personal items, like a garage sale, you only report the gain. Loss on a personal sale cannot offset a gain on a personal sale.
If all the sales were for personal items and none of them sold at a gain, you adjust for the entire amount on the 1099-K screen.
If you sold any at a gain, you need to ALSO report that sale.
If gain or no gains-
Income
Other Common Income
Income from Form 1099-K START
On the “Did you get a 1099-K?” screen, select “Yes”
On the “Which type of income is your 1099-K for?” screen, select “Personal item sales” CONTINUE
Enter the 1099-K as it was reported
NOTE: ONLY select the box for “This amount in box 1a is too high or includes some personal transactions” if it shows things like birthday gifts you received or when someone sent you money to split a dinner cost.
CONTINUE
Next screen make a selection-
If all the items you sold were sold at a loss or just broke-even, you would select “All items were sold at a loss or had no gain” If ALL the items were sold and you did not realize a gain on any single item, you would not need to enter the sales .If no gain, you would be done at this point
IF ANY ITEM (even just one) SOLD AT A GAIN- select “only some items had no gain”, and enter the amount that represent the items NOT sold for gain.
IF GAIN CONTINUE-
In other words, if the 1099-K shows 1,000 "Proceeds" and 900 of that was stuff you sold at a loss or broke-even, enter 900 here.
In this example, you would need to "account" for 100 "proceeds". That means 100 was sent for something you sold and you sold it for more than what you paid for it.
That does not mean you MADE 100, just that they sent you 100. You must record what you sold, what it cost you, and the profit you made. You do that later in the "Investment" section
CONTINUE
Finish the interview and select done on the “Your 1099-K summary” screen,
BUT YOU ARE NOT DONE
Go back to:
Income
Investment Income
Stocks, Cryptocurrency, Mutual Funds, Bonds, Other click UPDATE
The next screen should show “Personal items sales (1099-K)”
Click REVIEW to open
The next screen has an input screen for the Personal items you sold at a profit/gain.
Enter what you sold, when you sold it, when you purchased it
Enter how much you sold it for, and how much it cost you to buy it.
The difference between what it cost you, and what you got as "Proceeds" is the taxable profit (Capital Gains)
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