How do i offset the personal items items i sold on ebay as i am not a business. I entered 1099-K as received in Other reportable income now i need to offset the cost where do i enter that? I was going by this. Option 2 in TurboTax Deluxe or higher: reporting it via Other Miscellaneous Income is acceptable to the IRS.From the left menu, go to Federal and select the first tab, Wages & IncomeAdd more income by scrolling down to the last option, Less Common Income, and Show moreScroll down to the last option, Miscellaneous Income, 1099-A, 1099-C and StartChoose the last option, Other reportable income and Start and YesEnter the applicable description and amount and ContinueFirst, enter Form 1099-K as received. It is essential that the full amount be entered.For a description, include Form 1099-K and Personal Property SalesNext, enter an adjustment to reflect the cost of these items as an offsetting, negative amount up to the amount of the income.For the cost description, include Form 1099-K and Cost of Personal Property In other words, if the goods cost you $100 and Form 1099-K was for $10 in sales, the maximum cost allowable would be $10.

To clarify where to enter the negative amount: Go back to Option 2, Step 5. Enter the applicable description and amount and Continue. (For example, the entries were Description Personal Property Sales and 100) TurboTax now shows Other Miscellaneous Income Summary. Select +Add Another Income Item on the lower left side. At Other Taxable Income enter Cost of Personal Property for description and the negative amount and Continue. (To continue with the example, the amount would be -100.) Now returned to Other Miscellaneous Income Summary, select Done. @David971

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David971

Solved

1099-k offsetting?

Forum|Forum|5 years ago
February 9, 2021
5 replies
0 views

How do i offset the personal items items i sold on ebay as i am not a business.

I entered 1099-K as received in Other reportable income now i need to offset the cost where do i enter that?

I was going by this.

Option 2 in TurboTax Deluxe or higher: reporting it via Other Miscellaneous Income is acceptable to the IRS.

From the left menu, go to Federal and select the first tab, Wages & Income
Add more income by scrolling down to the last option, Less Common Income, and Show more
Scroll down to the last option, Miscellaneous Income, 1099-A, 1099-C and Start
Choose the last option, Other reportable income and Start and Yes
Enter the applicable description and amount and Continue
- First, enter Form 1099-K as received. It is essential that the full amount be entered.
  - For a description, include Form 1099-K and Personal Property Sales
- Next, enter an adjustment to reflect the cost of these items as an offsetting, negative amount up to the amount of the income.
  - For the cost description, include Form 1099-K and Cost of Personal Property
  - In other words, if the goods cost you $100 and Form 1099-K was for $10 in sales, the maximum cost allowable would be $10.

Best answer by KathrynG3

To clarify where to enter the negative amount:

Go back to Option 2, Step 5. Enter the applicable description and amount and Continue. (For example, the entries were Description Personal Property Sales and 100)
TurboTax now shows Other Miscellaneous Income Summary.
Select +Add Another Income Item on the lower left side.
At Other Taxable Income enter Cost of Personal Property for description and the negative amount and Continue. (To continue with the example, the amount would be -100.)
Now returned to Other Miscellaneous Income Summary, select Done.

@David971

AmyC

Employee

That is well laid out and works. The point is to eliminate the income. We had a conversation and one of the managers had the idea of using Sch D as well. Another said she would be tempted to not report it. I am super conservative when it comes to the IRS. As long as you claim the income and then eliminate it, you are fine. The method you found above works and seems easy to follow. The part where it says to enter an adjustment- that is the key where you will enter a matching amount to zero out the income.

You already entered: 1099k, personal property sales and amount.

Next, enter 1099k, cost of personal property, negative same amount

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David971Author

I don't know where to enter this info at?

enter an adjustment to reflect the cost of these items as an offsetting, negative amount up to the amount of the income.

KathrynG3Answer

To clarify where to enter the negative amount:

Go back to Option 2, Step 5. Enter the applicable description and amount and Continue. (For example, the entries were Description Personal Property Sales and 100)
TurboTax now shows Other Miscellaneous Income Summary.
Select +Add Another Income Item on the lower left side.
At Other Taxable Income enter Cost of Personal Property for description and the negative amount and Continue. (To continue with the example, the amount would be -100.)
Now returned to Other Miscellaneous Income Summary, select Done.

@David971

David971Author

I found where to enter it!

Critter-3

Correct ... selling personal items for a loss is not deductible so all you can do is offset the income to zero it out.

Lbailey0

This works for federal but does not import accurately to my state return (NJ). Trying to put negative amounts on the 'Other Wage Adjustments' or 'Other Non-Wage Income' sections does not seem to work. Any suggestions for how to address? I'm thinking somehow deleting the income/ form from my state return would make the most sense since I maintain support for why it's erroneous income.

JamesG1

What is the nature of the 1099-K income that you are reporting?

When the original 1099-K is entered into the TurboTax software, you are presented with eight options.

Graphical user interface, text, application, chat or text message

Description automatically generated

For instance, the option Personal Item Sales leads to reporting the income on Schedule 8849 / Schedule D which should flow properly to the NJ tax return.

Please clarify.

@Lbailey0

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Lbailey0

Thanks for the continued help. The one that's giving me trouble is from PayPal and the nature of the transactions are actually for online gambling since I used PayPal to fund and withdraw. To the extent I have anything taxable from a gambling perspective, I'm covering that with W2-Gs so this is erroneous income. Based on this, I selected the last option Other --> Other.

I can confirm that for the 1099-K I received from eBay which relates to the sale of personal goods my offset seems to have carried through to the state return. I selected the 'Personal item sales' option for this form and put in the offset in line with the first post in this series.

AbrahamT

Here's what you do

For the K-1 income reporting, Personal income, then Less Common Income, then Prizes, Awards and Gambling Winnings, then update until you reach this screen

For the W2 G reporting, you'll take it one screen back like this;

And then finally, to back out the duplicate income Go into Less Common Income, Misc Income, Lets work on Misc income,, Did you receive Other Wages-answer Yes till you get to the screen Any Other Income, hit yes, then source of Other Income, Other, then in description enter duplicate income and put a negative for the duplicate income amount like this

P.S. The 60,000 is for illustration purposes only. Put the negative duplicate income amount as in your situation.

Best

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malukens

First, let me say this work around works but you have to follow the directions carefully and understand the implications for audit purposes. This was a real challenge for me in TT Premier 2024, Windows version as there is a bug that prevents access to the 1099-K form using Step-by-Step. You can still go to forms view and search for 1099-K and access it there.

The ultimate goal is to report the eBay income via the 1099-K but then offset it so you have no tax liability. There needs to be a written record in your final tax documents to verify both, that you reported the 1099 income but also the offset. If you simply fill out the 1099-K and click the 1099-K Reconciliation line 2b, both the income and tax liability disappear BUT also the Schedule 1 reported income disappears too. That is bad since it then appears that you forgot to report your 1099-K income, you need to provide an audit trail in your IRS filing forms that show the income and the offset.

The "right" way to show that offset would be to enter it directly on Schedule 1, line 24z but that appears to be impossible in TT 2024. After the better part of 2 hours online with TT support, getting dropped and promised return calls, I reread this post and the light bulb went off. Here is how I (hopefully) solved my reporting and audit trail requiremnent.

1) Go to forms views and search for the 1099-K (I couldn't get it to come up in Step-by-Step)

2) Enter the info from the 1099-K but none in the "1099-K Reconciliation" section. This gets the income reported on Schedule 1, line 8j (where it belongs.)

3) Next, follow the post instructions to report the same income (as a negative number) in the additional income section of Schedule 1, line 8z. This certainly isn't elegant but it provides the IRS with an audit trail and proof that you reported the income and then offset it.

Many thanks to the original author and hopefully this will help others get through this challenge.

leland-king

if I want to offset personal items sold I check the amount box1a is to high and then enter what’s in box1a?

KrisD15

If the 1099-K reports online sales, and ALL the sales sold at a loss (or had no gain) which is a weird way of saying that none of the sales made a profit, don't adjust on that screen, select "personal sales" for the type of income, and then select "All items were sold at a loss or had no gain."

That should be the end of it if ALL the items did not make a profit.

If EVEN ONE item sold at a profit, you would select the other option "I sold some items at a loss or no gain" (which is a weird way of saying "at least one item sold for a profit") and enter the amount of the sales that DID NOT make a profit.

Next, you would enter the sale or sales that did make a profit in the investments section.

@leland-king

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