Regarding eBay 1099-K

[Maverick_25]

Some confusion regarding eBay 1099-K, If I sold personal items only all at a loss, do I have to individual list those transactions one by one on the 1099-B worksheet or can I just check the 2b box under 1099-K Reconciliation?

[MindyB · Accepted solution]

You don't need to enter the items individually if you sold them all at a loss. You also do not need to fill out a 1099-B.  I advise you to delete what you entered in the 1099-K entry, self-employment, and investment entry if they appear.

Here is how to report personal items sold with no gain in TurboTax Online:

• Within your tax return, go to the magnifying glass icon on the top right, type 1099-K and select the Jump to 1099-K link in the search results
• Choose Add a 1099-K
• The next screen will ask "Which type of income your 1099-K is for?" choose Personal item sales, then Continue
• Enter the information from your 1099-K
• After you choose continue, the next screen will show "Personal Item Sales". Here is where you choose "All items were sold at a loss or had no gain"

[Maverick_25]

The confusion is that TurboTax 2024 doesn't report this on Schedule 1 (Form 1040) lines 8z and 24z, nor does it create a form 8949.  The only document that is created is Form 1099-K Summary when you print your return.  

This seems at odds with the IRS reporting requirements.

Please advise.

IRS page:  https://www.irs.gov/businesses/what-to-do-with-form-1099-k

Personal items sold at a loss

A loss on the sale of a personal item can't be deducted from your taxes. But you can zero out the reported gross income so you don't pay taxes on it.

If you sold personal items at a loss, you have 2 options to report the loss:

Report on Schedule 1 (Form 1040)

You can report and then zero out the Form 1099-K gross payment amount on Schedule 1 (Form 1040), Additional Income and Adjustments to Income PDF.

Example: You receive a Form 1099-K that includes the sale of your car online for $21,000, which is less than you paid for it.

On Schedule 1 (Form 1040):

• Enter the Form 1099-K gross payment amount (Box 1a) on Part I – Line 8z – Other Income: "Form 1099-K Personal Item Sold at a Loss, $21,000"
• Offset the Form 1099-K gross payment amount (Box 1a) on Part II – Line 24z – Other Adjustments: "Form 1099-K Personal Item Sold at a Loss $21,000"

These 2 entries result in a $0 net effect on your adjusted gross income (AGI).

Report on Form 8949

You can also report the loss on Form 8949, Sales and Other Dispositions of Capital Assets, which carries to Schedule D, Capital Gains and Losses.

[Maverick_25]

see here;  https://ttlc.intuit.com/community/taxes/discussion/ebay-1099-k-selling-personal-items-how-to-access-...

[Maverick_25]

Update:  Seems the IRS page listed above is not reflecting the update Schedule 1 (Form 1040) 2024 language.

If you look at Schedule 1 (Form 1040) at the top you see new language, as posted below.

"For 2024, enter the amount reported to you on Form(s) 1099-K that was included in error or for personal items sold at a loss
Note: The remaining amounts reported to you on Forms) 1099-K should be reported elsewhere on your return depending on the nature of the transaction. See www.irs.gov/1099k."

I would follow MindyB's explanation above.  Thank you Mindy !

When you follow Mindy's method, your amount from your eBay 1099-K (example $6,420.56) is automatically populated at the top like this; For 2024, enter the amount reported to you on Form(s) 1099-K that was included in error or for personal items sold at a loss ......  6,420.

[Maverick_25]

[DawnC]

If the 1099-K is ALL for personal losses, there is no need to bring Form 8949 into your tax return.   Sometimes, taxpayers get a 1099-K that has personal gains and losses.   In that case, you would need the 1099-B to report the gain on the sale.   

But in your case, an entry and a negating entry on Line 8 of Schedule 1 will suffice.   Both entries will be on Line 8z.    Personal losses are not deductible nor taxable, so they do not require an entry.   However, since you received the 1099-K, you want to enter it and then immediately remove it.  Entering it the way Mindy described above will do both entries simultaneously.    

Keep your records in the unlikely event you receive an inquiry.  Rest assured, TurboTax complies with all federal and state tax law.

[Maverick_25]

https://ttlc.intuit.com/community/business-taxes/discussion/how-do-i-enter-something-on-schedule-i-l...

DaveF1006 say's to do this:  But uses PayPal in the example.

To enter:

1. Go to wages and income>less common income. 
2. Go to Miscellaneous Income, 1099-A, 1099-C
3. Go to Other reportable income
4. In the description field, enter 1099k income. Pay pal receipts for return of capital. put in the amount of the 1099K.
5. After entering this, there will be a summary page that appears.  Select add another miscellaneous income item. 
6. Here put in description 1099K is for return of my investment. There was no income earned and enter a negative number for the amount of the 1099K. 
7. What this does is show the positive and negative amounts on line 8Z, which cancels out the income. 
8. Be specific in your description fields for both of the miscellaneous income entries so the IRS will see how you justify this isn't taxable income. You will to make clear that this is for return of your capital and none of it is pay pal income.

So to be clear, are you saying that I should make a positive and a negative entry on Line 8Z ?

The Mindy method did not add this automatically to Line 8Z, should I manual add a Positive & negative entry to be safe?

Thank you!

[AmyC]

Yes, two entries, one positive and one negative.

Follow these steps to enter the income:

1. go to the federal income section
2. scroll to the bottom
3. Miscellaneous Income, 1099-A, 1099-C, Start
4. Scroll to the bottom
5. Other reportable income, Start
6. Other taxable income?
7. Select YES
8. Description  - whatever you want to say, 1099-K for personal loss
9. Amount, enter your amount of income
10. Continue

Subtract the income

1. Miscellaneous Income, 1099-A, 1099-C, Start
2. Scroll to the bottom
3. Other reportable income, Start
4. Other taxable income?
5. Select YES
6. Description 1099-K expenses
7. Amount, enter your negative amount
8. continue

[Maverick_25]

Thank you for clarifying, hopefully Intuit Programmers will streamline the 1099-K input.  More and more people will start getting these type of 1099's.  I've been on Ebay for years selling unwanted items, first time getting this type of 1099-K.  It does seem the IRS wants some type of notation on Line 8Z and 24Z.  Per this statement:

Heading: Personal items sold at a loss

https://www.irs.gov/businesses/what-to-do-with-form-1099-k

Thanks again.

[Maverick_25]

Last question and I might have this completed;  

Under Wages & Income > 1099-MISC and Other Common Income > "Income from Form 1099-K"

Do I remove the original entry for the eBay 1099-K from "Income form Form 1099-K" after I've completed the positive and negative entries via "Miscellaneous Income, 1099-A, 1099-C, Start" ?

OR

Do I leave it so it will show up on the top of Schedule 1  (Example 5,590.)

[DawnC]

You can leave it.   No taxable income has been added to your return.   If you entered the 1099-K and said it was all personal sale losses, you did not need to add the the positive and negative entries, but it is okay to leave it the way it is.   You can e-file when you are ready!

[jc-caruso]

• After you choose continue, the next screen will show "Personal Item Sales". Here is where you choose "All items were sold at a loss or had no gain"

I wish this would work, but this is not what appears on the next page after I choose continue. There is no place to mark that “all items were sold at a loss or had no gain."

So, I still don’t know what to do with this giant 1099-k that is just personal items sold at a loss and should not count as income. Any help? 

[Vanessa A]

Are you using TurboTax Online or Desktop?

Before you entered the 1099-K, did you select that this was for Personal Item Sales?  If so, then on the next screen you should enter the 1099-K, then on the following screen, you will see the I sold some times at a loss or had no gain or All items were sold at a loss or had no gain.  

If you do not see that, you can try deleting the 1099-K you entered and then re-enter it making sure you select that these were personal item sales.