1099-K ebay Timeshare

[bkgrant10]

Hi, I live in NJ and sold 2 (1) week vacations in my timeshare on ebay for a total of $1,100 for both transactions. eBay sent me a 1099-k. I didn't actually make this amount. It cost me $600 to purchase the vacation slots, and I resold them on ebay for $1100 whereas my real profit was only $500. How do I properly report this? 

And what if I had sold them for $1100 and never made a profit at all. Wanting to know this for the future.

Thank you in advance. 

[MonikaK1]

You will report the sale of timeshares as the sale of an investment.

If you sold the vacation timeshare at a loss, and you had personal use of the property, the loss would not be deductible.

See the response from @VictoriaD75 below and in this thread:

You will treat this as the sale of a capital asset. (However, Losses from the sale of a personal use timeshare are deemed to be personal losses and are not deductible) 

To enter this transaction in TurboTax Online or Desktop, please follow these steps:

1. Once you are in your tax return, click on the “Federal Taxes” tab ("Personal" tab in TurboTax Home & Business)
2. Next click on “Wages & Income” ("Personal Income" in TurboTax Home & Business)
3. Scroll down the screen until to come to the section “Investment Income”
4. Choose “Stocks, Mutual Funds, Bonds, Other” and select “start’ (or “update” is you have already worked on this section) (see Screenshot #1)
5. The first screen will ask if you sold any investments during the current tax year (This includes any sale of real property held as an investment property so answer “yes” to this question)
6. Since you did not receive a 1099-B, answer “no” to the 1099-B question
7. Choose type of investment you sold - select Second Home
8. Some basic information:
   1. Description –  Usually the basic timeshare information
   2. Sales Proceeds – Net proceeds from the sale 
   3. Date Sold – Date you sold the property

[bkgrant10]

Thank you for your response. Let me rephrase the question because this seems extremely complicated for only a "few bucks of profit" Almost not even worth it. I own a timeshare and I haven't stayed there in years. The timeshare trading company called RCI allows us to let family and friends utilize the unit but at a cost. For simplicity and actuality. The timeshare company will charge owners $500 to allow owner's family and friends to stay there. I list this this on ebay at $700. After ebay fees, pay pal fees and me paying back the timeshare company the $500, my "true profit" may only be $100-200 but ebay sends me a 1099-K for the net sale of $700 which is not accurate. I only made $100-$200. How do I report this?  And sometimes, I may only make a profit of $50.  This isn't a business and I'm not selling my "timeshare ownership" only the utilization (renting a week) of my unit. 

[JamesG1]

You want to report the full amount of the 1099-K because the IRS will be looking for that to be reported on your tax return.  

To report Personal item sales, follow these directions.

• Down the left side of the screen, click Federal.
• Down the left side of the screen, click Wages & Income.
• Click Show more to the right of Other Common Income.
• Under Your income and expenses, click the Edit/Add button to the right of Form 1099-K.
• At the screen Did you get a 1099-K? click Yes.
• At the screen How would you like to enter your 1099-K? click Type it in myself.  Click Continue.
• At the screen Choose which type of income your 1099-K is for, select the button for Personal item sales.  Click Continue.
• At the screen Let’s get the info from your 1099-K, enter the information.  Click Continue.
• At the screen Personal Item Sales, you are told that further information will need to be entered.  Learn More provides detailed information for the next steps.  Click Continue.
• At the screen Your 1099-K summary, notice that the income relates to ‘Sale of Personal Items’.  Click Done.
• Under Your income and expenses, click the Edit/Add button to the right of Investments and Savings (1099-B, 1099-K….)
• At this screen, you will be asked to Review the Personal item sales (1099-K).

At the screen Now, enter one sale…., answer questions about the personal item sale.  Click Continue.

The entry will be reported:

• on Schedule D of the Federal 1040 tax return, and
• on line 7 of the Federal 1040 tax return.

Capital loss for a personal item sale reports $0 capital gain on line 7 of the Federal 1040 tax return.

Make sure that you keep records of all transactions. Later, you may need to demonstrate to the IRS that this is not taxable income.

[Edited 2/5/2023 | 10:41 am PST]

@bkgrant10 

[bkgrant10]

below is also what I received are they relatively deriving to the same reporting structure? 

Do I have to report hobby income?

SOLVED by TurboTax Updated 3 weeks ago

Yes, all income needs to be reported, even if it's from a hobby.

The IRS doesn't allow you to deduct hobby expenses from hobby income, but you can deduct the costs involved in creating the hobby income. You can determine gross income from any not-for-profit activity by subtracting the cost of goods sold from your gross receipts.

Example: Jill works for ABC Marketing Company doing marketing activities. That’s how she pays her bills. In her spare time, she makes fairy houses. She posted a picture on her social media account and someone wanted to buy one. She made $650 selling one of her creations and received a 1099-K.  Jill had paid $50 for materials to create the fairy house, $20 photographing the fairy house and $10 shipping it after it was sold.  Jill cannot deduct the expenses for photographing or shipping the fairy house, however she can deduct the $50 cost of creating the fairy house.

Follow these steps to enter your hobby income in TurboTax.

1. Sign in to TurboTax and open your return
2. Select Search and enter 1099-k
3. Select Jump to 1099-k
4. Select Yes on the Did you get a 1099-K? screen
5. Select Hobby income and Continue
6. On the next screen, enter the details from your 1099-K regarding who paid you, their federal ID number, and the amount in Boxes 1 and 4. If your form has information in boxes 6-8, select the box and enter those details, and Continue
7. If you have a 1099-K from another hobby, select Add another 1099-K, otherwise, select Done
8. Scroll down the Wages and Income page and select Less Common Income
9. Select Start next to Miscellaneous Income, 1099-A, 1099-C
10. Scroll down to Other reportable income and select Start 
11. Choose Yes on the Any Other Taxable Income?screen
12. In the Description field, enter Form 1099-K Costs of Goods Sold
13. In the Amount field, enter your Costs of Goods Sold as a negative number, select Continue and then Done

[PatriciaV]

If you were not selling the timeshare itself, but only access to the timeshare, the income reported to you on Form 1099-K could be considered Other Taxable Income, possibly Hobby Income, as you posted above. 

In this case, you may report expenses only to the extent of your other/hobby income. Since you're not selling a product, you would not have Cost of Goods Sold. Other expenses may be included, although you may not report a taxable loss. The net income would appear on Form 1040 Line 8.

@bkgrant10 

[Frankie21dj]

I can't get back to your question but here is how to handle the sale of personal property.  In the Turbo Tax program in the income section there should be a question like "did you sell any assists". By answering YES it should take you to a question input screen.  It may also ask did you receive a Form 1099K.  The bottom line is, it should put your information on Schedule D Capital Gains and losses.  The $1100 is the gross amount of the sale from that you will subtract the cost and any expenses of the sale.  Because it is personal property you can't take a lost but you can reduce your cost by the expenses including the purchase price, the amount subject to tax will not be more than 15% of your gain and could, depending on your tax bracket, not taxable at all.  Good Luck

[bkgrant10]

Some say this will be reported on the schedule 1 line 8, others say a schedule D. I’m totally confused for a measly <$200. I  don’t even want to list this on ebay moving forward. In fact, I want to go back to the Craigslist days of cash and/or third party sales using the friends  & family option. As mentioned, this is “not” a business and it’s 1-3 times a year if that, whereas that I rent out my timeshare for no more than $100 profit per transaction after I pay back the timeshare company and the ebay & pp fees (13%) 

[BrittanyS]

Unfortunately, since the 1099-K has been reported to the IRS, you will want to include the information on your return.  Here are the steps to report the 1099-K when it was for the sale of personal property:

To enter your personal 1099-K items, sign in to your TurboTax account if it is not open and follow these steps:

1. Select Income & Expenses.
2. Scroll down to Less common income and select show more.
3. Scroll to  Miscellaneous Income, 1099-A, 1099-C, and check start.
4. On the page Let's Work on Any Miscellaneous Income, scroll to " Other reportable income " and click start.
5. On the page Any Other Taxable Income, select yes.
6. On the page Other Taxable Income, enter a description indicating Personal 1099-K and amount.
7. Select continue.
8. Select done on the next page

Repeat the above steps this time; in step 6, add the amount as a negative value.  Repeating steps 6-8 is to reduce the items that were received for personal use.  For example, payments to friends and family, coffee & donuts, amounts to a local store, etc.  

[bkgrant10]

Thank you ! 🙂 very helpful and then I read this on the IRS website as of this response. Is all of this a moot point but TT has setup the application as worse case scenario in event the IRS reverse course ? 

See section beginning with Pursuant to Notice 2023-10, for calendar year 2022, 

https://www.irs.gov/newsroom/form-1099-k-frequently-asked-questions-general 

What's New

On December 23, 2022, the IRS announced that calendar year 2022 will be treated as a transition year for the reduced reporting threshold of more than $600 that was to go into effect for information returns due in 2023. See Notice 2023-10PDF. Pursuant to Notice 2023-10, for calendar year 2022, third party settlement organizations who issue Forms 1099-K, Payment Card and Third Party Network Transactions, are only required to report transactions where gross payments exceed $20,000 and there are more than 200 transactions.

[Vanessa A]

This announcement is geared towards reporting requirements for the companies who are issuing the 1099-K's, not towards those who actually do receive the 1099-K.  If you receive a 1099-K, this does not change how or if you need to report it.  You still need to report the income that is reported to you on the 1099-K. 

Technically, if you sell items or earn any income you are supposed to report it.  If there was no gain nor loss and you did not have the form, then you would be ok not to report it, but once you receive the form, you are obligated to report the income if you are filing a tax return.