Question

When is TurboTax online going to be modified to support the proper reporting of 1099-Ks that were generated from the Loss from sale of personal property?

Forum|Forum|3 years ago
February 11, 2023
1 reply
0 views

Below are the steps as detailed by the IRS - will the software be updated in time to file this year? If not, how do I recreate these steps in TurboTax Online?:

The loss on the sale of a personal item is not deductible. For calendar year 2022 tax returns, if you receive a Form 1099-K, for the sale of a personal item that resulted in a loss, you should make offsetting entries on Form 1040, U.S. Individual Income Tax Return, Schedule 1, Additional Income and Adjustments to Income, as follows:

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."

TurboTax Free Edition Online

J

JamesG1

IRS form 1099-K for Personal item sales are supported. See the steps outlined below.

IRS Instructions here page 87 states:

Form 1099-K loss reporting

If you sold a personal item at a loss, either report the loss on Form 8949 or report it on line 8z.

To report Personal item sales, follow these directions.

Down the left side of the screen, click Federal.
Down the left side of the screen, click Wages & Income.
Click Show more to the right of Other Common Income.
Under Your income and expenses, click the Edit/Add button to the right of Form 1099-K.
At the screen Did you get a 1099-K? click Yes.
At the screen How would you like to enter your 1099-K? click Type it in myself. Click Continue.
At the screen Choose which type of income your 1099-K is for, select the button for Personal item sales. Click Continue.
At the screen Let’s get the info from your 1099-K, enter the information. Click Continue.
At the screen Personal Item Sales, you are told that further information will need to be entered. Learn More provides detailed information for the next steps. Click Continue.
At the screen Your 1099-K summary, notice that the income relates to ‘Sale of Personal Items’. Click Done.
Under Your income and expenses, click the Edit/Add button to the right of Investments and Savings (1099-B, 1099-K….)
At this screen, you will be asked to Review the Personal item sales (1099-K).

At the screen Now, enter one sale…., answer questions about the personal item sale. Click Continue.

The entry will be reported:

on Schedule D of the Federal 1040 tax return, and
on line 7 of the Federal 1040 tax return.

Capital loss for a personal item sale reports $0 capital gain on line 7 of the Federal 1040 tax return.

@xrecar

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"

X

xrecarAuthor

@JamesG1

Thanks for the thorough explanation of the steps. I tried going through them and got hung up at the point where I need to review the 1099-K. When I click on the review button, it was taking me to a review of a 1099-B, which I dont even have. So I decided to contact help and open a case. After working with the person for about an hour, she managed to add the information in, but then it required a Deluxe upgrade. She was nice enough to provide a one time code to cover the upgrade and we finished the call. I went back in to review the 1040 documents before I filed and found that they were not following the directions of the IRS. The information was not in the correct fields and as such I was not comfortable with filing as it was. I thought maybe I should just start all over and make sure I went through your steps, but now that she had me apply the code and checkout, I can no longer clear everything. As far as I can tell, it doesn't look like there will be an opportunity for me to use TurboTax to file my taxes since I keep running into this issue. I dont understand why someone would 'toy around' with someones taxes. She kept saying that what she was doing was a workaround. Thank goodness I decided to review the documents before filing them. Needless to say I am very frustrated with how things have gone.

DMarkM1

TurboTax will automatically enter an offsetting negative amount for the 1099K that is reporting a personal item sold at a loss. Both the 1099K income and the offset will be reported in line 8z on your schedule 1. This has the same affect as putting the positive amount on line 8z and negative on 24z.

To ensure your forms are updated properly start by deleting the 1099K entries in both "Other Common Income" and "Investments and savings" You could also use the "Delete a form" function using these steps.

1. Select "Tax Tools" in the left hand menu
2. Select "Tools"
3. Select "Delete a Form"
4. Find the 1099-K and any other income form that doesn't apply (for example if a form 1099B was created for the income)
5. "Delete"
6. "Confirm Deletion"

Next,

Go back to "Other Common Income"
Revisit 1099K
Yes
I'll type it myself
Continue
Personal Item sales
Continue
Fill in the form information
Assuming it was one sale at a loss select "All items were sold at a loss or had no gain"
Done