Received 1099-K from Reverb and PayPal, but sold only personal items at a loss. This link suggests no need to report: https://ttlc.intuit.com/replies/3995054 - thoughts?

[ZoltanB45]

Enter in the 1099-K information where you would enter in self-employment income. Then choose the type of income received, which is 1099-K. Once you enter the sales, turbo tax will ask if you want to record expenses. In the expense section, choose inventory as an expense type. Enter zero for the value of beginning and ending inventory. The next screen will ask the cost of the goods. Put the value of the goods sold in the cost of purchases box and continue. If it is worth more than what you got, then you won't be taxed on the sale.

[dbinma]

Dave20   (20 plus year user of TurboTax!)

I am filing 2021 taxes using TurboTax Delux cd on my desktop. I received a 1099-K because I sold two expensive items of on ebay for a total of $1070. The actual original cost was $2,650. I am not in business, this was like a one time garage sale. The  1099-K "Instructions for Payee" says was issued because "I received payments that exceeded $20,000 gross reportable transactions and an aggregate number of transactions exceeded 200 for the year."

  This is obviously not true, and I suspect that Ebay just getting ready for 2022, and sent 1099-Ks to everyone.

Question: Since the American Rescue Plan change (below) begins with transactions starting January 2022, so it doesn’t impact 2021 taxes, am I correct that I am not required to report this 1099-K under the year 2021 rule:  $20,000 and 200 transactions criteria? Do I just keep the 1099-K with my 2021 tax records?

If I am required to report, and I report it under misc. income using the 1099-K numbers, do I reference the 1099-K, if so, how?

" American Rescue Plan change begining with transactions starting January 2022, so it doesn’t impact 2021." taxes.

[LoganathanB]

Yes, You need not report 1099-K since you sold only your personal items at a loss and it is not a regular business.

[flowney442]

Is it possible that the IRS would take issue with your implicit claim that 1099-K reported sales were personal items sold at break even or loss if you are not self employed? On what basis might the IRS argue against the implicit claim when you do not include the 1099-K sent to you?

[stantonporsche]

TurboTax 2022 Form 1040 - Enter Form 1099-K for Losses on Personal Use Items - YouTube

[ErnieS0]

IRS says to report your Form 10kk-K on your tax form, even if all the items were personal sales sold at a loss.

Unless you enter your Form 1099-K and offset the income, IRS will assume the Box 1a amount is 1000%.

Here's what IRS says:

Report your proceeds (the Form 1099-K amount) on Part I – Line 8z – Other Income, using the description "Form 1099-K Personal Item Sold at a Loss."

Report your costs, up to but not more than the proceeds amount (the Form 1099-K amount), on Part II – Line 24z – Other Adjustments, using the description "Form 1099-K Personal Item Sold at a Loss."

In the example of a refrigerator sale, if you received a Form 1099-K for $600 for the refrigerator for which you originally paid $1,000, you should report the loss transaction as follows:

Form 1040, Schedule 1, Part I – Line 8z, Other Income. List type and amount: "Form 1099-K Personal Item Sold at a Loss …. $600" to show the proceeds from the sale reported on the Form 1099-K

and,

Form 1040, Schedule 1, Part II – Line 24z, Other Adjustments. List type and amount: "Form 1099-K Personal Item Sold at a Loss…. $600" to show the amount of the purchase price that offsets the reported proceeds. Do not report the $1,000 you paid for the refrigerator because the loss on the sale of a personal item is not deductible.

See Form 1099-K Frequently Asked Questions: General

@stantonporsche

[stantonporsche]

no way on turbotax deluxe or any other version of turbotax to get offsetting number on schedule 1 line 24z. 

the work around would be to enter it manually but not sure if that might cause filing issues. 

to get entry on line 8z is also a challenge.   you can get description of item

1099-K personal items at a loss 

by entering info on LESS COMMON income

Miscellaneous Income, 1099-A, 1099-C

but you have to make 2 entry 

person item at a loss 200

person item at a loss -200

for example , so that turbotax will zero out and not owe any taxes

this will enter info on schedule 1, line 8z but seems like you need to manually enter 200 because it shows up as zero.