You do not need to start a Schedule C as if this was self-employed income without a trade or business. But, you cannot report a loss, either. The maximum you can deduct from the proceeds is the amount of the proceeds. 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. Next, enter an adjustment to reflect the cost of these items as an offsetting, as a negative amount up to the amount of the income. 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.

Question

I received a 1099k from PayPal for selling my kids used clothing. How do I report items that I sold as a loss? I am not a business. Thank you.

Forum|Forum|5 years ago
January 31, 2021
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KathrynG3

You do not need to start a Schedule C as if this was self-employed income without a trade or business. But, you cannot report a loss, either. The maximum you can deduct from the proceeds is the amount of the proceeds.

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

B

bunnaro1974Author

Thank you, Cathy. This is very helpful information. Do I also need to report this on my Virginia state return or would that information be automatically conveyed from my federal? If I do need to add on the state return, where and how would I report that? Thank you so much for your help.

LenaH

The information from your federal return will automatically flow to your Virginia return. You do not need to reenter the information on your state return.

@bunnaro1974

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