I got my eBay 1099K & my PayPal 1099K. All my eBay payments go through Paypal so by adding PP's 1099K as income, it looks like I made a lot more. How do I reconcile?

[brookbender]

I used my PayPal details (I use Intuit Quickbooks for easy tracking) to fill out my eBay income section and now I don't know what to do with my PayPal 'income' (1099k) since I've already accounted for that. I don't want my Paypal 1099k to make it look like I made a lot more money than I did but I don't know how to represent the PP 1099k without duplicating information and thus having a higher income.

[DaveF1006]

If the Paypal 1099-K is an exact duplicate of the Ebay 1099-K, then only report one 1099-K . if the amounts differ on the 1099K, you can enter the difference by adding another row of income where you entered your 1099-K information.

Since you have two 1099-K, the IRS may question this in a routine audit. Here you will explain that your paypal 1099-K and Ebay 1099-K reported the same income.

[David641]

I use eBay as a personal tag sale.  I sell only things that I previously purchased and then used.  There are no profits since my sale price for the items are always less than the original cost.  Where does the gross income go & where does the costs of goods sold go in this case? Can I show a loss?

[KathrynG3]

To avoid a discrepancy with the IRS, report both Forms 1099-K as received. But, you should only pay tax once on the income. Read on to find out how to reverse out the duplicate.

Since eBay is a personal tag sale, similar to a garage sale, as long as you are not in a trade or business with the intent to make a profit, then these items should not be treated as if you are self-employed.

When you have personal sales, the IRS allows you to take the cost up to the amount of the sale. You cannot take a loss on these goods, but you are allowed to report an offset to reflect your cost, or basis, in the items, albeit limited.

To do this in TurboTax, follow these steps in TurboTax Deluxe or higher: 

1. From the left menu, go to Federal and select the first tab, Wages & Income.
2. Add more income by scrolling down to the last option, Less Common Income, and Show more.
3. Scroll down to the last option, Miscellaneous Income, 1099-A, 1099-C and Start.
4. Choose the last option, Other reportable income and Start and Yes.
5. Enter the applicable description and amount and Continue.
   • First, enter Form 1099-K as received. It is essential that the full amount be entered.
     • For a description, include Form 1099-K and Personal Property Sales
     • ​​​​​​​Enter both Forms 1099-K as received, identified from their sources, eBay and PayPal
   • Next, enter an adjustment
     • To reflect the duplicated income, List something like Form 1099-K PayPal already reported via Form 1099-K eBay.
     • To reflect the cost of the goods sold as an offsetting, negative amount up to the amount of the income:
       • For the cost description, include Form 1099-K and Cost of Personal Property 
       • The amount entered would be -10 if the sale was 10 even though the goods cost $100 initially.

[David641]

Thank you Kathryn.  That was a great explanation.  

I just learned that eBay will not be supplying me with a 1099-K as I didn't meet the requirements.  Will just entering the PayPal 1099-K be sufficient without triggering an audit?

[corkynorth]

So it would look like this???

[RobertB4444]

@corkynorth you got it.

[elishablatt]

@KathrynG3 

I have the similar situation with eBay sales (only one 1099-K from eBay). However, I am using Turbotax Home and business 2021.

The tabs/topics are not the same. Would you please describe the process for the Home & Business version?

Thank you!

[KrisD15]

To clarify, 

what are you tying to zero out since you say you only have one 1099-K.

If you are reporting this on a Schedule C, enter the 1099-K as income, then enter the cost of goods for the items you sold, as well as other expenses, such as postage and packaging. 

[corkynorth]

This is not reported on Schedule C as I am not self employed.  eBay is an on line garage sale for my activity, like selling items on Craigslist, except as eBay handles the payment side, these payments get reported on a 1099-K.  To "zero out" the impact of the 1099 K on taxable income, as stated in the Turbo Tax site, you enter this under MISC or Other Income, then enter a negative entry as a separate amount to effectively set MISC or Other Income to $0.00.  It is still reported, but there is not tax impact.  I posted a screen shot of my entries on this site and got a tax-expert reply that my treatment was, in fact, correct.

[elishablatt]

@corkynorth

There were several methods described, throughout this thread. I found your method to be the most simple and straight forward to implement. Thank you!