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Massachusetts 1099-K (not M-1099-K) from eBay selling

I'm trying to report a 1099-K form (not M-1099-K) I received as a result of selling used items on eBay. The gross receipt is a little over $1000, but Massachusetts has a lower threshold of $600 for 1099-K.

 

A number of threads here (for example, this one) suggest reporting it under Miscellaneous Income with a positive entry "Sales of Personal Property 1099-K" showing the income and a matching negative entry "Cost of Personal Property 1099-K" so that the net income is zero from this 1099-K.

 

My question is whether the fact I sold a few new items (in addition to the majority of used items) would complicate the situation. I still have no net income, in the sense that if I were to report this 1099-K in Schedule C and include the original receipt costs for all the used and new items under COGS, then I would come out negative.

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Expert Alumni

Massachusetts 1099-K (not M-1099-K) from eBay selling

Yes -- You can still enter it as Miscellaneous Income.

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Expert Alumni

Massachusetts 1099-K (not M-1099-K) from eBay selling

In your situation, it doesn't matter if the items sold were new or used.

 

The advice given in the other thread is good if you are occasionally selling your personal property.  However, if this is a business you conduct you should enter the income and expenses on a Schedule C.

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Level 1

Massachusetts 1099-K (not M-1099-K) from eBay selling

Thanks for your reply! When you say "In your situation, it doesn't matter if the items sold were new or used." do you mean that I can do it under "Miscellaneous Income"?

 

I had my confusion because additional advice given in those threads suggests that we keep documentation to show that things we sold in eBay were in Used condition. I did only sell occasionally and what I sold are personal property. It's just that some of those are gifts and therefore new. If I do Schedule C, after returns, shipping, PayPal and eBay fees, the total amount is a few hundred dollars, and the cost for the original purchases of the used items (so not including gifts) will be more than the income from the sales. Would you please clarify if this can still be entered as "Miscellaneous Income"?

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Expert Alumni

Massachusetts 1099-K (not M-1099-K) from eBay selling

Yes -- You can still enter it as Miscellaneous Income.

View solution in original post

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Returning Member

Massachusetts 1099-K (not M-1099-K) from eBay selling

I am also wondering how to deal with this. I sold personal items that I no longer needed occasionally during 2019. I got my 1099-K from PayPal as although my gross income from PayPal was only about $700, I am in MA, so I am above the $600 state threshold. I spoke with a representative from the Massachusetts Department of Revenue who advised my to report this as miscellaneous income and to present the gross income as "hobby income" and the shipping fees and seller fees as "hobby expenses." This unsurprisingly lowers my tax refund. Conversely, when I asked this question here, I was told to report this income as being from the sale of personal property and present the cost of such personal property as an offsetting amount. This of course does not reduce my refund. My question is which one is most appropriate, given that this is not a principle or steady source of my income?

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