Where would I enter a 1099 form from PayPal for selling cards? I’m not a business but a collector. I did not make any money.

[teddyownz]

I started collecting cards last year, I spent more than I sold. I’m just curious where I would enter this information. Again, I’m not a business, just a collector.

[ColeenD3]

What is your purpose for selling them? Did you buy them with the intention to sell them or did you have them as personal belongings? 

One factor that determines if this is a business or not is intent. If the cards were just laying around and you sold them, there is no profit motive. However, if you bought them with the intention of selling them, profit or not, there is a business.

You can go two routes. They are other income (no profit motive) and you can't take any expenses.

You can file a Schedule C, establishing a business, and take any losses against your income.

[teddyownz]

Thank you for your response. 

I got into collecting and was buying high end Star Wars product, and selling off what I didn’t want. In the end I did NOT make a profit. But the 1099 has $29,000 in transactions. Although I have 6 receipts alone that total more than $37,000. I would sell what I didn’t want to fund more card purchases. 

I don’t own a business, LLC, or anything. This is purely for hobby. 

again appreciate the insight and advice on what to do! 

[JeffreyR77]

You will enter the hobby income following the steps in this link:  Where do i enter income from a hobby - TurboTax

[teddyownz]

Thank you! 

Did not realize this existed. So entering even amounts so not showing a loss, will protect me from audits (of  course I can provide all transaction receipts for all my card case and card purchases that outweighs the 1099 form). 

I just want to make sure the IRS doesn’t think I’m a business and making money off my hobby, as I’m not doing so. 

[ColeenD3]

They are fine with you making money off a hobby. You pay tax on that income and that makes them happy. What will make them unhappy is if this is a continuing occurrence and you are making a profit without paying self-employment taxes on the income. 

Nothing protects you from audits. They tend to be random. The best defense is back-up proof of every transaction.

[teddyownz]

Awesome, 

is there a reason TurboTax doesn’t want you to put more than the income amount on the 1099-K form? 

I’ve definitely spent way more than I’ve gotten back, as I’m a new collector, and was figuring out what I wanted to collect, which lead to me opening a lot of product and selling a lot of it at a loss. 

Appreciate the kind replies! 

[ColeenD3]

Are you entering it in Schedule C? If so, the program will ask if you have additional income. If you are including it in other income, then no. You are limited to the form amount.

[teddyownz]

I will not, only because I’m not a business, nor have a business of any kind.

I will enter as hobby expense, I was curious why TurboTax asks for the amount spent not to be higher than income. I’m expected to enter an even amount at this point? Even though I had a net loss? 

[JeffreyR77]

Prior to 2018, hobby expenses were deductible as itemized deductions on Schedule A.  Deductible hobby expenses were limited to the amount of hobby income as a hobby could not create a loss and reduce your taxable income.  TurboTax asks this information in case the law changes and allows the deduction again. Entering your expenses does not reduce your tax under current tax law.