I have a 1099-k from Paypal for household items sold at less than cost. How do I report this?

[blastoff]

There was no profit just selling used items I no longer needed I saw a similar post saying to add to Miscellaneous income but I cannot seem to find it under Wages & Income

[KathrynG3]

You have two options if you sold items much like selling personal goods at a garage sale, then, it is acceptable to report the costs as well as the income because this income would not be classified as a hobby or income from your own trade or business. 

To do this in TurboTax:

• Option 1: reporting income from eBay via Other Miscellaneous Income 
  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 the income as received. It is essential that the full amount be entered.
     • Next, enter an adjustment to reflect the cost of these items as an offsetting, as a negative amount up to the amount of the income. In other words, if the goods cost you $100 and Form 1099-K was for $10 in sales, the maximum cost allowable would be $10.

• Option 2 available in TurboTax Premier or higher: reporting eBay income as investment income
  1. Go to the search box and enter Investment Sales
  2. Select Jump to Investment Sales
  3. Select Other at the next screen, OK, what type of investments did you sell? and click Continue
  4. At Tell us more about this sale, enter in the name, such as Form 1099-K eBay and the Payer's EIN and click Continue
  5. At Now we'll walk you through entering your sale details, under the first dropdown menu, What type of investment did you sell? Select Personal Items
  6. Answer How did you receive this investment with an option from the dropdown menu.
  7. Enter the Description. If you are uncertain what date you purchased the goods, select Something other than a date so that TurboTax will enter Various
  8. Next, enter your Sale Proceeds and an equal amount for the Total Amount Paid and click Continue
  9. Select None of these apply at Let us know if any of these situations apply to this sale and Continue
  10. Continue through the rest of the prompts 

[CarolLynn1]

We have a similar situation. We are downsizing in our retirement and sold over 200 personal items between Amazon and eBay in 2020. Many of the items are books from my husband's professional library so there are many small orders. We are also selling a variety of used household items and personal possessions.  All are sold for less than we paid, or less than the fair market value if we don't have the receipt .  We have 1099k's totaling $6205. We will live in Illinois where the 1099k rules are 4 or more transactions exceeding $1000 or 4 transactions. We are not doing this as a hobby by any means, nor are we selling our possessions to make a profit.  I tried entering the income of Sale of Personal Items $6205 under Less Common Income - Miscellaneous, but there wasn't a place to enter the adjustment. I guessed that you enter another called Cost of Personal Items -$6205.  Is that the correct way to handle the entry?  Thank you.

[ToddL99]

You are correct - enter the adjustment in the same interview as the payments, but as a negative number. 

To enter the adjustment:   

• Go to Less Common Income, Miscellaneous Income and Other reportable income. Enter "Lawsuit settlement" in the Search Box and Select "Jump to lawsuit settlement" "to get to this screen ("Lawsuit settlement" is just an effective search term to get to this interview screen) 

• Continue to the screen "Other Taxable Income". Enter the description as "1099-K Costs" and the amount as a negative number. Entering "-$ 6205" here will offset the receipts reported on the Form 1099-K. These are NOT wages.   

A corresponding negative amount will be entered on line 8 of Schedule 1.

[gmichaelkobe007]

I need to adjust the $21K 1099-K (Payment Card and Third Party Network Transactions) Gross amount to account for my selling expenses (Ebay and Paypal) and to reflect my actual cost for these 168 items.  I do not have a business (Schedule C) and do not want to file using the customary 1099-K route.  Are there any other options to account for this 1099-K income ?  Greatly appreciate any help.  

I saw your great response below, and when I started to go the Option 1 route, when I got to this step (shown below), I could not "enter an adjustment to reflect the cost of these items as an offsetting, as a negative amount up to the amount of the income".  Please help !!!

Enter the applicable description and amount and Continue

• First, enter the income as received. It is essential that the full amount be entered.
• Next, enter an adjustment to reflect the cost of these items as an offsetting, as a negative amount up to the amount of the income. In other words, if the goods cost you $100 and Form 1099-K was for $10 in sales, the maximum cost allowable would be $10.

[PattiF]

Here is a way to enter the adjustment to income:

1. 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
   • Next, in other reportable income also,  enter an adjustment to reflect the cost of these items 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 
     • In other words, if the goods cost you $100 and Form 1099-K was for $10 in sales, the maximum cost allowable would be $10.

[Jonoletsgo]

I am using Turbotax Home & Business. I've seem several answers about adding a 1099-K but none are matching my options on my program. I can find Miscellaneous Income... 1999-A, 1099C and click START... Other Reportable Income... and follow the prompts through to add a Description (I'm entering 1099-K ebay Personal item sales) and enter the amount next to who earned it (my husband).  Then click NEXT and only options are to Add Another Income Item or click Done. No place to enter an adjustment to reflect the cost of these items as an offsetting negative amount.

I also attempted to enter under the Investment Sales area as suggested, but this seems to pertain to stocks. Asks for Total proceeds, sum of all sales and Total cost basis. As well as the holding period. 

How can I enter this 1099K for my ebay items sold (not related to a business), without it reducung my tax return? 

[ToddL99]

If you added the 1099-K under "Other Reportable Income", you can also enter the "cost" of the items sold under "Other Reportable Income" - as a negative number.

To report the income:  

• Type "other reportable income" in the search window (or in the Search Topic window for desktop versions) 

• Click on "jump to other reportable income  (or "other reportable income" in the Search Topic results) 

• Answer "No" to "Did you receive any other wages?" 

• Select "Other reportable income" from the Miscellaneous income list 

• Select Add another Income item  on the Other Miscellaneous Income Summary screen 

• Enter a Description (1099-K Misc Sales"?)and the amount reported,  then click on Continue 

The amount will be reported on line 8 of Schedule 1 (Form 1040). 

To enter the adjustment:   

• Type "other reportable income" in the search window (or in the Search Topic window for desktop versions) 

• Click on "jump to other reportable income  (or "other reportable income" in the Search Topic results) 

• Answer "No" to "Did you receive any other wages?" 

• Select "Other reportable income" from the Miscellaneous income list 

• Select Add another Income item  on the Other Miscellaneous Income Summary screen 

• Enter a Description ("Cost of 1099-K Sales"?) and the amount as a negative number,  then click on Continue 

A corresponding negative amount will be entered, and line 8 of Schedule 1,  will be zero. 

[sscheerer333]

Hello KathrynG3, thanks for the details.  If the personal household items sold are things I've had for years and no longer have a receipt, what kind of documentation would be required to prove the cost was greater than what I sold them for?

[LeonardS]

There is no specific documentation.  You should maintain a list of the items that you sold, description, condition,  approximate age, and purchase cost (best estimate) to support your cost of the items sold.  @sscheerer333