1099-K problems entering consistent & correct information in turbotax

Forum|Forum|1 year ago
February 18, 2025
2 replies
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Okay, so, in 2024 I had online sales of personal items (bought a long time ago, cleaning out house, reducing storage costs) surpassing the threshold, and was issued a 1099-K.

Looking at the 1099K, I had to find that the number reported to the IRS is gross sales, before refunds, sales fees, and shipping costs. So, I built an Excel spreadsheet with the sales (44 in total), calculating the numbers, adding the purchase costs for each. About half of these were effectively sold at a loss (didn't buy to make a profit, and didn't). I entered each sale and all of the information in the detailed section (turbotax noting that losses aren't deductible).

Problem is that I am asked (under Wages and Income 1099-K), for personal item sales, if I sold some items at a loss or gain. Since I had that detailed Excel, I was able to separate out the gross proceeds for the items sold at a loss (included in the total the IRS knows about). Fine... but when I then ran the smart check at the end of the federal return, I got an error in the Form 1099-B worksheet telling me that the Form 1099-K reconciliation is off ("total sales proceeds must match the amount shown below"), ie the gross proceeds number is off. Unless I am misunderstanding something here, this means that either all items must be sold at a profit or all items sold at a loss. So now I see only one option: I incorrectly state 100% of the gross proceeds were sold at a loss or no gain (then the smart check error should go away). Otherwise I am sure that this will be flagged at the IRS in my return.

Ask the Experts - USAA - Feb 2025

RobertB4444

Level 15

The total of all of the gross sales prices for the individual items must match the total on the 1099-K. So each individual item must have a sales price and an item cost. The losses will disappear and the gains will be taxed. In your case it appears that all of the individual sale prices are not adding up to the total on your 1099-K.

Check all of your individual entries again and see if there is a typo in there that is causing the disagreement.

@hcmetz

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hcmetzAuthor

Level 2

Hello, thank you for the quick reply. The answer is no, the sales proceeds are 100% precisely entered - easy to reconcile against my Excel. And we are not talking about a few dollars difference. Again, the problem:

I have sold 44 items, let's say $100 proceeds each. $4,400 got reported as gross sales on the 1099K.

About half of them sold at a loss, let's say making up $2,300 of the gross proceeds.

Wages and income - personal sales items asks me for the total proceeds for items sold at a loss or no gain. I truthfully enter $2,300.

In the smart check, under Form 1099-B, Form 1099-K reconciliation, it then states: "payment amount from linked Form 1099-K: $2,100"... and then throws me a smart check error, because according to the IRS form, the amount at that point must match the TOTAL amount of proceeds (matching the 1099K in TOTAL)..

Since I cannot imagine the IRS not having thought this through, I am sorry, but it sounds like turbotax may not add up ALL gross proceeds - ie for BOTH items sold at a LOSS plus items sold with a GAIN, but only includes the items sold at a gain. That is CORRECT for the gain calculation, but INCORRECT for the gross proceeds reconciliation.

Please advise.

RobertB4444

Level 15

So the first screen you should have ticked the 'personal item sales'. And you did that. Then on the second screen you'll enter the gross amount from your 1099-K as well as any portion that should be excluded from income (fees and whatnot) and you did that. On the third screen you should enter the total amount from the 1099-K that represents the amounts sold at a loss. That should be fine.

Double check that when you entered the 1099-K that you checked the box that says "some items were sold at a loss" and not the box that says "all items were sold at a loss". In order to get back to that option you will have to delete the 1099-K and re-enter it. I don't get an error when inputting your data if I tick the "some items" box but I do if I tick the "all items".

@hcmetz

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plasar

Level 2

First, massive thanks to hcmetz for reporting this and seeking (unsuccessfully?) resolution to this 1099K issue.

Second, I hereby note a disclaimer for the solution I found that worked around TurboTax's "bug" - I have no idea if this will work with the IRS - but they get their capital gains taxes, so I think they are OK.

Thirdly, I won't go into any background detail of how I ran into this issue - it is exactly the same as hcmetz who described the issue very nicely above - TurboTax reporting a "mismatch" in totals reported on 1099K/1099B when you are saying that not all items were sold at a loss.

So I initially reported that "not all items were sold at a loss" and then I filled out detail of each item with a capital gain on a "Form 1099-B Wks" worksheet - you can see this in Forms view. I did everything correctly I think but received the "mismatch" error.

To work around this, I then went back to the Personal Income/Other Common Income/1099K section and clicked Update, and this time, I listed the full gross amount of the sales to match the 1099B reported by the vendor, and chose "All items were sold at a loss or no gain". Yes, some had a gain, so this is not accurate. However, what happend next fixed the "mismatch" error, I believe.

Then when I ran the Smart Check, I got 4 errors initially - for the 4 items in the worksheet, it gave me a choice (paraprasing) "Was the basis reported to the IRS?", to which I answered "No" for all items - I didn't tell the vendor what the basis was, so they couldn't report to the IRS. Rerunning Smart Check, I then got 4 addition errors - "Was this reported to the IRS on a Form 1099B", to which I answered "Yes" for all items - because I received a 1099B and I'm sure the IRS got one too.

After doing this, Smart Check ran correctly and the final check before submitting passed without a "mismatch" error.

Now I think this is fine because TurboTax calculated the same abount of taxes owed for these capital gains whether I checked "All items sold at a loss" or not. So the IRS has their money, and I reported capital gains accurately, but maybe there is a slight discrepancy with a checkbox that doesn't make sense.

I will attempt to attach my worksheet here with the 2 key Yes/No questions highlighted in Green - Basis reported to IRS = No, Reported on Form 1099B = Yes.

I hope this helps!

MICKEY79

Level 3

I am still having a similar problem. I have entered all my data from my 2 1099-K's. After entering the loss info I have a small gain on each that does NOT show up anywhere on 1040. This is income that I am sure I must declare. Very confusing!! TT has done a very poor job on handling 1099-K info.

plasar

Level 2

Did you go to the "Forms" view and fill out detail of each item with a capital gain on a "Form 1099-B Wks" worksheet? Let me know if you want a screen print.