Question

1099-K and PayPal

Forum|Forum|5 years ago
February 12, 2021
1 reply
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My amount being reported for 1099-k is $10,000. I bought the "inventory" (sports cards) in the current and prior years. This wasn't intended as a business but it was suggested I use schedule C. Anyway, because the business started this year, in turbotax I don't have any value for beginning of 2020. At the end of 2020 I put $0, as I have no inventory left. Is that correct.?

Secondly, I am reporting the $10,000 under business income. Outside of the 35 bucks for travel reimbursement to usps when I shipped cards, the only other write off is my inventory/cost of goods. I put the $7000 it cost to buy the cards under the "cost of purchases" line and $150 for "other costs" (shipping and fees). Is that proper way to count my "business" income and deductions? I am not a business person and wasn't expecting having to file this. This okay?

ColeenD3

Yes. Your purchases/costs from 2019 are your beginning inventory. Any additional purchases are added to it. Your December 31, 2020 inventory on hand is the closing inventory. Any shipping in to you goes in Cost of Goods Sold. Shipping out is an expense. You might also take a portion of your internet fees, business only, as a miscellaneous expense.