Can’t e-file 2022 Federal Tax because two 1099-Ks linked to the same Schedule D?

[Moneyless]

We are using Turbotax online premier. We sold used personal stuff online at a loss in 2022. We receive one 1099-K from PayPal ($345 sales on Facebook Marketplace) and one 1099-K from eBay ($1013 sales on eBay). We entered two 1099-Ks under “Other Common Income”, selecting the category “Sale of Personal Items” . We also entered each sale transaction under “Investments and Savings” as prompted by Turbotax online.

We noticed a weird thing and currently face a problem that prevents us to e-file Federal tax.

The weird thing (not sure if this causes the problem):

- Even if both 1099-Ks were entered as related to “sales of personal items”, under the finalized “Investments and Savings”, Turbotax online automatically categorized PayPal’s 1099-K as “Personal item sales (1099-K)”, but eBay’s 1099-K as “Stocks, bonds, etc. (1099-B)”.

The problem:

We can't e-file Federal Tax (our preference) before we fix this problem.

Turbotax online describes the problem as:

“From 1099-K Wks (eBay Commerce Inc.) Link to Schedule D worksheet links to the same copy of this worksheet as another copy of Form 1099-K. Select a unique copy of the worksheet for each Form 1099-K.”

Under this, I can only see one Worksheet.

• It says “QuickZoom to another Form 1099-K Worksheet”, but QuickZoom is not available on Turbotax online.
• The worksheet Box 1 also says “Required: double click to select the form on which to report this income”. but we double clicked almost everywhere on the worksheet and nothing happened.
• The only field we can edit on this worksheet is the field next to Schedule D, currently filled with “eBay Commerce Inc.”

Thanks in advance for your advice!

[JamesG1]

The treatment of the $1,013 from ebay does not sound correct.  I wonder whether the entry of the two 1099-K's accidently became "entwined" when they were entered?

I would follow these steps to enter the two transactions so that the 1099-K and IRS form 8949 / Schedule D Capital Gains and Losses do not get confused with each other.

1. Enter the Paypal 1099-K which leads to entry of the Paypal IRS form 8949 / Schedule D entries.  Complete all the entries.  Review to see if there are any issues and whether Paypal income is in balance.
2. Return to Federal / Wages & Income / Other Common Income / Form 1099-K to enter the second 1099-K.
3. Then enter the ebay 1099-K which leads to entry of the ebay IRS form 8949 / Schedule D entries.  Complete all of these entries.  Review to see if there are any issues and whether ebay income is in balance.

@Moneyless 

[Moneyless]

@JamesG1Thank you for the prompt reply! I followed your recommended steps, but got the same Schedule D problem even without finishing your recommendation:

Here are what we did:

1. Delete existing 1099-K's  from eBay and Paypal

2. Federal / Wages & Income / Other Common Income / Form 1099-K -- Entered eBay 1099-K first because it's the problematic one.

3. Federal / Wages & Income /Investments and Savings -- It prompted me enter all the transactions from eBay (I believe they are Schedule D entries)  --> However, Turbotax still categorized eBay's 1099-K here with a heading “Stocks, bonds, etc. (1099-B)”.

4. Decided to let Turbo tax review first before entering PayPal's 1099-K

Note: We have other 1099s, including 1099-INT,  1099-DIV, and 1099-B for stock trading. (The 1099-B was automatically imported into Turbotax).

Unfortunately, I still had the Schedule D problem when Turbotax did its federal review, saying

“From 1099-K Wks (eBay Commerce Inc.) Link to Schedule D worksheet links to the same copy of this worksheet as another copy of Form 1099-K. Select a unique copy of the worksheet for each Form 1099-K.”

It seems Turbo tax had my Schedule D worksheet(s) intertwined in a really bad way. I don’t even know

(1) which 1099 causes the problem (2) if re-entering every 1099 again can help.

[PattiF]

The IRS will match the income on your return with the information that they receive from 1099s. You do not need to enter the 1099-K forms into your return as long as you include the income from the two 1099-Ks. This will not raise any red flags with the IRS if the forms are not entered into your return. Make sure that the total matches the 1099-Ks.

The IRS does not require the actual form entry, only that all income is included in your return.

@Moneyless 

[Moneyless]

Thank you for the answer and it gives me better peace of mind.

However, this doesn't help me to be able to e-file my federal tax as I already paid $100+ for Turbotax online premier for e-filing etc. It's very frustrating experience.

[JamesG1]

Let's try this again.  You entered one or more IRS form 1099-K's and selected Personal item sale.

For each IRS form 1099-K entered, the detail on Form 8949 / Schedule D must equal the total of the IRS form 1099-K.  Paypal will be $345.  Ebay will be $1,013.

You entered the IRS form 1099-K's and selected Personal item sale at this screen.

The entry of each 1099-K has created a worksheet in which you need to enter the personal items, their costs, selling prices, dates and other information.

Each worksheet will generate entries that flow to the Schedule 8949 / Schedule D Capital Gains and Losses.

The total of the proceeds column must equal the total of the IRS form 1099-K or the software will give you an out of balance error message.  

Paypal will be $345.  Ebay will be $1,013.

You may elect to delete the entries and start over.

You are able to remove the 1099-K(s) by following these steps:

• Down the left side of the screen, click on Tax Tools.
• Click on Tools.
• Click on Delete a form.
• Find the form listed and click Delete to the right.

Remove the worksheets here by clicking the delete trashcan.

@Moneyless 

[Moneyless]

I can't express my gratitude for your patience and detailed answer! @JamesG1 

I followed your answer step by step. I deleted all my 1099-Ks. I added one 1099-K and  then filled out the corresponding Schedule D worksheet with matching numbers. Then,  I added the other 1099-K and filled out its corresponding Schedule D worksheet.

I did this process for at least 5 times. Sadly, Turbotax still has my schedule D worksheets entangled every time and doesn't allow me to e-file. The problematic Schedule D is always associated with eBay's 1099-K (even when I entered eBay's 1099-K first followed by its worksheet).

[DMarkM1 · Accepted solution]

As @PattiF mentioned, don't enter the forms 1099K only enter the investment transactions.  

1. Go back and delete the forms 1099K from the "Other Common Income" topic.  
2. Go to the "Investment" section and just to start clean delete the "Ebay" and "PayPal" entries.  
3. Next add an investment.  
4. Select the "Other" tile.  
5. Enter broker as "PayPal 1099K or Ebay 1099K" as applicable.  
6. Select "Personal Item" from the dropdown and add the description of the item sold and the transaction details
7. Since you selected personal items, if the transaction is a loss, it will not affect your taxes as a personal loss cannot be taken. TurboTax will notify you of this on the next screen

This will put the income items on your schedule D and zero out any personal losses.

[Moneyless]

Now I understand what @PattiF was referring as "entering my income from eBay".

Thank you very much! This solved the intertwined Schedule D problem, which I am quite sure is a software bug of Turbotax.